Otter offers plan to raise new money for Idaho roads, bridges

The economy is weak, but Idaho's highways need money so urgently that Gov. Butch Otter will ask the Legislature to OK higher taxes and fees anyway. Here's where he thinks you should pay more. Aide calls investing in infrastructure 'absolutely essential'

BY DAN POPKEY - dpopkey@idahostatesman.com

Published: 12/04/08


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Idaho Statesman
Kate Gaughan of Boise pumps $1.99-a-gallon gas recently at Maverik on the corner of 27th and Main streets. "This is the cheapest I've seen it in a long time," said Gaughan, who follows gas prices on the Internet to get the best deal.

ADDITIONAL INFORMATION

What Otter is proposing

HIGHER FUEL TAXES

Idahoans now pay 25 cents a gallon in state fuel taxes. Otter would boost the tax each year for five years. He has not yet said how much, but an aide said the tax would be 36 cents today if it had kept up with the cost of living since it was raised to 25 cents in 1996.

RENTAL CAR TAX

Some of this tax would be paid by out-of-state visitors who rent cars after flying to Idaho. Otter hasn't suggested an amount.

HIGHER REGISTRATION FEES

Idahoans now pay $26 to $48 in annual registration fees, depending on a vehicle's age. Otter would boost fees each year for five years, raising $15 million the first year, though an aide didn't say how much that would amount to per vehicle.

OTHER KEY PROPOSALS

Track sales of cars, tires and parts to see if they could later generate potential "user-fee revenue" for roads.

Study "the validity of - and perceived inequities in - Idaho's truck-registration system."

Trim the Idaho Transportation Department's administrative costs 6 percent immediately, require ITD to report how it is saving money, and select business leaders to review ITD's operations.

Increase the grocery tax credit (this affects the state general fund, not the road fund).

Trim general-fund spending next fiscal year in response to the economy.

Gov. Butch Otter on Wednesday offered the first specifics of his plan to raise new money for roads and bridges in 2009.

Otter will ask lawmakers to approve higher fuel taxes and registration fees, along with a new rental car tax. But the amounts of the increases and other details aren't expected until Jan. 12, when Otter's State of the State address will kick off the legislative session.

Otter, who was fighting bronchitis, was unable to deliver a scheduled speech to the Associated Taxpayers of Idaho. Instead, his chief of staff, Jason Kreizenbeck, filled in, telling about 400 people that it's never a good time to raise taxes and fees, but transportation needs demand action.

"We are not talking about sweeping, grandiose plans for building new highways," Kreizenbeck said.

"We are talking for the most part about maintenance - the kind of work and investment that everyone here knows is a necessary part of doing business and a proper role of government.

"Make no mistake, folks: Putting a sustainable and reasonable plan in place to begin bringing our transportation infrastructure up to speed is absolutely essential to our economic well-being, and to our prospects for the future," Kreizenbeck said.

Otter has not joined other governors asking Congress and President-elect Obama for $136 billion for roads, bridges and other infrastructure to boost the economy and curb joblessness. Neither has Otter suggested that he would refuse Idaho's share of the money. Some of that money could help meet Idaho's highway needs.

In March, Otter rejected a compromise offered by House Republican leaders that would have raised $68 million, saying it was inadequate. Since then, the economy has soured, and Otter has ordered 4 percent budget cuts for the fiscal year that ends in June.

It was not clear Wednesday whether Otter's plan would meet or exceed the $68 million he could have had under the House deal.

Otter, who held a series of meetings across the state this summer, has said the package would include various tools to raise money.

His goal has been to meet an estimated $240 million annual shortfall to maintain infrastructure as measured by a 2002 study, but Kreizenbeck would not say how much the governor now aims to raise.

Otter has abandoned his plan from this year's legislative session to raise registration fees for all vehicles by $150 a year. Instead, he will propose a system similar to the current formula, which charges a graduated fee pegged to the age of a vehicle, with owners of newer vehicles paying more.

The most detailed aspect of Kreizenbeck's speech came when he said $15 million would be raised in the first year by higher registration fees. After his speech, he and other Otter aides declined to be more specific.

Kreizenbeck seemed to set a cap for any fuel-tax increase, saying the governor would not propose increasing the 25-cent tax to 36 cents a gallon - the amount necessary to account for inflation since the tax was last boosted in 1996. The national average is 30 cents.

"Everyone here knows it costs a lot more to build anything today than it did 12 years ago," Kreizenbeck said. "It's high time we not only recognized but did something about that."

The speech included another wrinkle: Otter has ordered the Idaho Transportation Department to immediately shave administrative costs.

On Monday, Otter announced spending cuts in state agencies but exempted ITD because it is funded by dedicated funds, not general tax revenues.

But Kreizenbeck said ITD will make administrative cuts of 6 percent, reflecting both the 4 percent cuts Otter has ordered and the 2 percent he asked other state agencies to set aside as reserves should the economy continue to slump.

Kreizenbeck said new accountability measures will be established, including annual reports and a review of ITD's performance by business executives.

Dan Popkey: 377-6438. Reporter Cynthia Sewell and local news editor David Staats contributed.

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