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September 28, 2017

Utah Studies Viability of P3s for Transportation Funding

Utah’s Transportation Governance and Funding Task Force is asking if an “asset recycling” system could fund the state’s future needs for transportation infrastructure and maintenance.

The system represents one of the task force’s many initiatives since May to determine funding options for transportation.  As automotive technology continues to develop, state lawmakers have sought new ways to generate revenue aside from transportation taxes.

Revenue System

Competitive Enterprise Institute senior fellow Marc Scribner said that the asset recycling system involves leasing or selling public infrastructure assets to private companies. These firms would then be responsible for maintaining these assets at their expenses. In turn, the state could focus on how to boost revenue for other projects.

Toll roads and express lanes comprise some of the assets under the proposed system, which has already been under review in other countries, according to Scribner. Reduced reliance on taxpayer money serves as another advantage of the scheme since private investors will be shouldering the financial risks.

Gas Tax

Scribner believes that the current revenue collection for transportation, which involves taxing fuel, could no longer be sustainable in the future. The experts at Shadetree Automotive explain that cars are becoming more efficient technologically, and though the need for a traditional Toyota or Honda service in Layton or Salt Lake City may still be relevant, there is growing interest in electric and fuel-efficient cars too.

Drivers have become more interested in using these vehicles, amid high gas prices. The cost of fuel normally increases every year during the few days before Labor Day, yet Hurricane Harvey’s impact could further contribute to expensive gas.

The new system will allow Utah to have a reliable source of revenue for maintaining roads and bridges. As cars become more efficient, the fuel tax may become a less reliable form of revenue in the future.