Cities may push tax hikes for road plans

The Arizona Republic
Thursday, January 26, 2006
Pat Flannery

New sales taxes may be in the future for some Valley residents as cities grasp for ways to widen growth-choked freeways ahead of the schedule approved by voters only 14 months ago.

The extent of desperation is evident in a political coalition built by Goodyear, Avondale, Buckeye and Litchfield Park, where officials are discussing whether to ask voters to approve city sales-tax increases. New taxes would allow the cities to jump-start Interstate 10's expansion to next year instead of having to wait until 2011.

The funding proposal would require changes in state law. Arizona legislators said other ideas are being considered, including a regional sales tax or a three-county sales tax that would raise extra cash for freeway work in Maricopa, Pinal and Yavapai counties.

The problem, according to city and state officials, is that some stretches of Valley freeway already need more traffic capacity than was expected at this early stage in the $15.8 billion Regional Transportation Plan. That plan, developed by the Maricopa Association of Governments, spreads spending on freeway expansion over the next 20 years.

"The program . . . really did not respond to the growth going on for the last 10 or 15 years," said Rep. John Nelson, R-Glendale, one of several lawmakers involved in the talks. "We've got traffic problems all over the place."

Nelson is among a handful of mayors and state lawmakers trying to devise solutions.

Proposition 400, which voters approved in November 2004, extended a countywide half-cent sales tax through 2026 to pay for freeway improvements, urban light rail, an expanded bus system and urban roadwork.

Critics of the measure said during the campaign that not enough money was earmarked for freeway expansion. But Valley mayors had negotiated the funding priorities before the 2004 election, basing them on traffic and tax revenue projections. Once approved by voters, the order of projects and their funding was locked in place.

Now, some of those priorities are being questioned.

To start a project sooner than budgeted in the regional plan, a city or cities must find a way to pay for the work without money from that plan. The cities would be reimbursed by the plan for construction costs later, when the project originally was to be built.

Projects touted

Several local projects already are being touted to move up. For example, there are calls for immediate widening of I-10 at key points to resolve bottlenecks near Goodyear and Avondale in the west and Chandler in the east.

Interstate 17 in far north Phoenix is another chokepoint, as are Loop 101 in Scottsdale and segments of the Superstition Freeway in Tempe.

Officials from Maricopa County and the Arizona Department of Transportation have been invited to the table with several lawmakers and city representatives to figure out how more money can be raised early in the 20-year life of the regional plan. That would allow urgent widening projects to start ahead of schedule without delaying other projects already in the pipeline.

Goodyear, Avondale, Litchfield Park and Buckeye have been searching for a solution for months, and now are exploring city sales-tax increases as a way to get the work moving, Goodyear Mayor Jim Cavanaugh said.

Looking beyond the southwest Valley, Sen. Robert Blendu, R-Litchfield Park, said an idea on the table is to enact another half-cent sales tax countywide so various projects can be speeded up.

The three-county sales tax in Maricopa, Yavapai and Pinal counties has been floated because all three counties have pressing freeway needs that lack immediate funding, Maricopa County Manager David Smith said.

None of the ideas would be enacted without first seeking voter approval, but Smith said all "are interesting and worthy of study."

History repeated

The arguments probably sound familiar to anyone who watched the Valley's past 20-year freeway construction program unfold. Communities lobbied to build favored projects ahead of schedule, sometimes at the expense of their neighbors' projects.

To protect against a repeat, the current program purposely made project-funding schedules difficult to change.

Major work scheduled in the plan's first five-year phase includes improvements to Grand Avenue, widening of the Superstition, early development of Loop 303 in the northwest Valley, creation of a divided highway on Arizona 85, and new lanes on stretches of Loops 101 and 202, I-10 and I-17.

The question is what to do about equally urgent work scheduled five or more years down the road.

One of the most visible quandaries is in the southwest Valley, where I-10 at rush hour is clogged with commuter traffic generated by the explosion of new residential development. The freeway narrows to two lanes in each direction west of Dysart Road.

The bottleneck sometimes brings traffic to a halt, creating lethal dangers when combined with the stream of commercial 18-wheelers hustling to and from Southern California. Statistics compiled by the cities show it to be one of the most dangerous stretches of I-10 in the nation.

"It's a death trap," said Linda Lewis, 64, a Glendale Justice Court employee who commutes to work from her home near I-10 and Cotton Lane. She has witnessed numerous fatal accidents on the interstate, not to mention frustrated drivers bumping cars, firing gunshots or driving off the pavement to dodge traffic snarls.

Cities join forces

"Everyone is just about at the end of their rope because of the traffic out there," said Maricopa County Supervisor Mary Rose Wilcox, who represents the area. She has agreed to explore ways for the county to help.

The first phase of widening in that area, roughly from Loop 101 to Loop 303/Cotton Lane, is not funded in the plan until at least 2011. The second phase of widening, west of Loop 303/Cotton Lane, would not start until 2021. The total cost: $250 million.

Cavanaugh said that is not soon enough. The cities hope to speed it up so the first phase is done between 2007 and 2010, and the second phase between 2013 and 2015.

One method the cities have discussed to raise money is to borrow from an ADOT loan program for community roadwork.

The loan would be repaid when the earmarked transportation-tax revenues are available in the future.

But Doug Nintzel, an ADOT spokesman, said the agency's lending program is small, its total loans to date amounting to less than what the southwest Valley cities need to widen I-10. Using the program to lend for freeway projects likely would be too costly and risky, he said.

That leaves the cities essentially one other option: bonding. Because they are small and do not have the capacity to issue a large amount of construction bonds, they want ADOT or Maricopa County to issue them. That would require legislation to raise ADOT's bonding cap or to give Maricopa County special authority to issue the bonds.

City sales taxes weighed

In either case, the bonds would be repaid with future transportation-tax revenues. But the cities would have to pay the interest costs of those bonds, an amount estimated at $90 million. That's a tall order for small cities. Goodyear's total budget, for example, is roughly $220 million this year. Avondale's is about $175 million.

Because no federal or state financial help has been offered, the cities are discussing whether to raise their city sales taxes to get the cash. Goodyear, Avondale, Buckeye and Litchfield Park each agreed to explore whether its municipal sales-tax rate could be raised by one-tenth of a cent. That would increase the tax burden in each city by 10 cents per $100 of purchases.

The current sales tax in Avondale, including state, county and local rates, is 8.8 percent. The other cities are at 8.3 percent.

If the cities decide to go that course, their voters would be asked in November to approve the new tax so work could begin sometime in 2007.

Legislators, however, realize that other communities with jammed freeways will want to accelerate their projects. With that in mind, they are searching for a broader state or regional solution that will help everyone.

Depending on how it is crafted, a new regional sales tax could pay to speed projects at no cost to cities themselves.

"We ought to be able to get this done without costing them anything," Blendu said.

Future uncertain

The outlook for legislation needed to make any of the plans work is unclear.

Those involved in discussions still must reach a consensus on the best plan, then recruit broad support in the Legislature, which generally is hostile to new taxes.

And although Valley drivers are fed up with congested freeways, there is also the risk of a political backlash over new taxes.

"That's what everybody is trying to gauge right now," Wilcox said.

Cavanaugh thinks conditions on I-10 are so gloomy that, in the absence of other options, city voters would accept a slight sales-tax increase to jump-start the work.

Mark Izumi, 54, a telecommunications worker who owns homes in Chandler and Maricopa, said he would willingly pay another half-cent in sales taxes to speed southeast Valley freeway widening.

"It's a no-brainer," he said.

But Lewis, the Glendale court employee, prefers a development moratorium until freeway construction catches up to current growth.

"I know my neighbors are disgusted with the development," Lewis said. "I don't think they'd vote for it (a tax)."

Neither does Kevin McCarthy, president of the Arizona Tax Research Association. McCarthy said Arizonans heard the same arguments during the Valley's first 20-year freeway-building program.

'Old issue'

"The problem of local communities saying they're not getting money fast enough, that's an old issue," McCarthy said.

Although individual cities might find enough support to raise their rates, McCarthy doubts that there is enough voter support for another countywide tax.

Whatever the solution, Wilcox warned of another vexing question awaiting freeway planners: "Do we have the general capacity to build, even if we do go with a new general sales tax?"

The answer is unknown, given recent shortages in concrete and other materials and a dearth of contractors bidding for freeway projects.

Still, planners say any effort to speed construction is preferable to doing nothing, because shortages can only drive up future construction costs.

"We like to do whatever we can to build things sooner," said Eric Anderson, MAG's transportation director. "The more we put out there sooner, the better."