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Today a decision is expected on the legislation suggesting $220 million in overall tax cuts. There will be a reduction, and possibly elimination, of the state sales tax on food and reductions in income and small business taxes.
What difference do you expect this legislation would make to your life? Does it make sense? Is it a bad move for Utah? Or will it help attracting smarter workforce and more national companies?
Currently, Utah is suffering for an “embarrassment of riches,” so to speak. Economic growth in Utah has produced a surplus, which should be returned to the taxpayer. I have no problem with a reserve, but any excess over the reserve will soon find its way into some government program, most likely a program of dubious benefit.
Next, $220 million is a drop in the bucket. Its overall effect will be negligible.
Additionally, given the current rate of economic growth in Utah, I can envision where further cuts might be necessary, unless the legislature embarks on a massive infrastructure development plan and uses tax dollars to finance the projects. Personally, I do not like using tax dollars for capital outlay development; it places the entire financial burden on current users, while allowing free use to later generations. I prefer bonds for such activity. This spreads the financial burden over several generations who all benefit from the project through the years.
Finally, if Utah wants to be economically competitive with other states, it needs to make its tax structure conducive to business. California is losing businesses everyday, because it has gained a reputation of being a state unfriendly to business.
I'm by no means an expert on taxes, government spending, etc... but I don't understand why we're offering a tax cut when there are so many needs in the state that are not being addressed. I know education just received a lot of money, but we really need to be spending more to reduce class sizes and pay our teachers more. The other problem I personally loathe is the transportation situation. I-15 isn't going to cut it in 2-3 years and the Mountain View Corridor would reduce a lot of traffice on I-15 if they would ever get around to building it and not use it as a toll road. Why would they consider a toll road if we've got surplus in the budget?! I just don't get it.
I hate paying taxes as much as the next guy, but I really don't understand why we could make tax breaks when there is so much that needs to be done between Ogden-Provo and elsewhere in the state.
Again, I don't know much about this subject, I'm just stating my concerns since we supposedly don't have "funding" for some of these projects, yet we have a surplus in the budget.
I was hoping they would do something like this! With rising house prices, food tax, and wages that are lower compared to other growing states, they needed some way to make things more affordable. ALL FOR IT!
I know education just received a lot of money, but we really need to be spending more to reduce class sizes and pay our teachers more.
We had this discussion not long ago on this board. Utah has one of the best school systems in the United States, even though it spends less per student than most states. This proves that spending a lot of money on an educational system does not necessarily equate to good results. In addition, there are a number of studies that reveal low student teacher ratios do not produce the results we are led to believe they will. Now, when it comes to teacher salaries, we would need to ask whether teacher salaries are in line with the rest of the nation as a percentage of the prevailing economies. As an example, on average, my counterpart in Utah is paid a third of what I am paid in California, but when you compare the cost of living in California to Utah, our wages are much the same.
Quote:
Originally Posted by Agoraphobic
The other problem I personally loathe is the transportation situation. I-15 isn't going to cut it in 2-3 years and the Mountain View Corridor would reduce a lot of traffic on I-15 if they would ever get around to building it and not use it as a toll road. Why would they consider a toll road if we've got surplus in the budget?! I just don't get it.
As I stated in my first post, taxes are not a good way to finance infrastructure such as roads. Using tax money to build the Mountain View Corridor creates two problems. First, you pay for it now. This means later generations use it for free. In the parlance of public finance and economics, this is called “free riding,” and in an attempt to be fair, governments try to avoid this condition. Next, the use of tax money to finance capital outlay projects requires collecting sufficient funds first and then building. The lag time between approving the project and collecting the needed funds can be substantial. Time is inflationary, so it drives up the eventual cost. In addition, it reduces the ability to be responsive to needs.
On the other hand, a bond spreads the cost of the project over several generations, which reduces free riding. Yes, there is interest on the bonds, which increases the cost, but this can be calculated up front and included in the total cost of the project, whereas inflation while waiting for sufficient tax funds to pay for the project can only be estimated. Bonds also allow the taxpayer to know precisely where his or her money is going and how much it will cost. Taxes are vague and hidden in line upon line of the budget. Most taxpayers I know do not have a copy of their state, county, and municipal budgets at home.
Now, taxes should be used for operating costs. In other words, once the Mountain View Corridor is built, tax money should be used for maintenance.
Finally, I love toll roads or fees for service. This concept eliminates free riding and the use of taxes. Only those who actually use the road or service, pay. Using tax money or a state bond means that people in other parts of Utah, who may never use the Mountain View Corridor, are not charged. Think of it this way. We could create a large pool of money to pay for personal electricity use by imposing a tax. Those who use the most electricity derive the most personal benefit, while those who use the least electricity receive much less benefit and end up subsidizing those who receive the most benefit.
Quote:
Originally Posted by Calibelle
I was hoping they would do something like this! With rising house prices, food tax, and wages that are lower compared to other growing states, they needed some way to make things more affordable. ALL FOR IT!
Well said! Government has a tendency to fill voids. Leaving money with any governmental body is dangerous. They will eventually find a use for it. California voters finally became tired of ever increasing taxes on property, which resulted in Proposition 13. Every level of government in California hates this law. No longer can they propose a budget and then adjust property tax rates to pay for it. Prior to Prop. 13, government looked at the taxpayer as an inexhaustible Cash Cow. 13 created some problems that should be fixed, but overall, I love it. It would appear that the Utah Legislature is pretty savvy and has decided to return money before the voters decide to take it away from them permanently.
Last edited by SergeantL; 03-03-2007 at 09:06 AM..
Finally, I love toll roads or fees for service. This concept eliminates free riding and the use of taxes. Only those who actually use the road or service, pay. Using tax money or a state bond means that people in other parts of Utah, who may never use the Mountain View Corridor, are not charged.
As someone who lives quite close to the proposed highway (one of the proposed routes was actually within eyesight of my house, but fortunately for me at least, they chose the alternate route about 2 miles away) I have to disagree with you on this one. I dealt with a toll road in Washington DC. I, and many others, avoided the road and became "free riders" on the already over-congested public roads. I was struggling to make ends meet in the high cost of living environment there, and I simply could not afford the extra $125 a month ($5 a day). So I gritted it out in gridlock. Until the traffic situation becomes totally unbearable, people will avoid toll roads. Even then, there will be some like I was, who can't afford it in any case.
Specific to Utah, the West side residents paid their fair share for the I-15 reconstruction and other East side improvements, so making them pay tolls without assistance from those on the east side seems unfair -- creating a reverse "free rider situation." Imagine the outcry from Eastsiders if someone proposed converting a currently free east side road into a toll road to subsidize the new Mountain View Corridor, which is essentially the inverse of what is being asked of West siders.
Then there are the inefficencies of toll roads -- making unneccessary stops for payment and creating backups at the toll booths, paying the toll collectors etc. Just my two cents.
As someone who lives quite close to the proposed highway (one of the proposed routes was actually within eyesight of my house, but fortunately for me at least, they chose the alternate route about 2 miles away) I have to disagree with you on this one. I dealt with a toll road in Washington DC. I, and many others, avoided the road and became "free riders" on the already over-congested public roads. I was struggling to make ends meet in the high cost of living environment there, and I simply could not afford the extra $125 a month ($5 a day). So I gritted it out in gridlock. Until the traffic situation becomes totally unbearable, people will avoid toll roads. Even then, there will be some like I was, who can't afford it in any case.
Specific to Utah, the West side residents paid their fair share for the I-15 reconstruction and other East side improvements, so making them pay tolls without assistance from those on the east side seems unfair -- creating a reverse "free rider situation." Imagine the outcry from Eastsiders if someone proposed converting a currently free east side road into a toll road to subsidize the new Mountain View Corridor, which is essentially the inverse of what is being asked of West siders.
Then there are the inefficencies of toll roads -- making unneccessary stops for payment and creating backups at the toll booths, paying the toll collectors etc. Just my two cents.
Oh, I understand completely. $125 a month for the use of a road is outrageous, but this is usually the result of government allowing private enterprise to build and control the road. Private enterprise must answer to stockholders. Government does not need to show a profit, just break even.
Finally, converting traditional roads to toll roads can be problematic, but if there is a corresponding reduction in tax and the toll is simply used for maintenance, then it can be relatively fair.
Oh, I understand completely. $125 a month for the use of a road is outrageous, but this is usually the result of government allowing private enterprise to build and control the road. Private enterprise must answer to stockholders. Government does not need to show a profit, just break even.
Finally, converting traditional roads to toll roads can be problematic, but if there is a corresponding reduction in tax and the toll is simply used for maintenance, then it can be relatively fair.
Finding a balance in public finance is tough.
I should add that while a toll road is my least preferred solution, if the tolls were reasonable and it was the absolute only way (and it could be proven as the only way) to get the road built within 5 years vs. 20 years for taxpayer funding, I would support it with reservations.
Coolcats, IF the toll option is chosen for the mountain view corridor, the plans call for no toll booths. Anyone wanting to use it will buy a sticker that will automatically deduct the appropriate toll for the length driven. People that get on without a sticker would have their plate read and be sent a bill at a higher cost per mile, of course. You can check out the udot website which explains options better than I can and also explains the funding shortfall for overall needed infrastructure. Maybe if a road could be built without 30 different lawsuits being filed, the needed infrastructure wouldn't lag so badly. See Legacy Highway.
Maybe if a road could be built without 30 different lawsuits being filed, the needed infrastructure wouldn't lag so badly. See Legacy Highway.
Yeah, pat your nearest Sierra Club member on the back for the delay of any road in the state... especially the MVC.
I can see why paying for the MVC with tax dollars is viewed as "free riding" for future generations, but at the same time aren't we all "free riding" off of one thing or another the governemt constructed years and years ago? I just don't see how toll roads will solve anything... People will avoid them even if it means they have to put up with I-15, and if that happens then the solution doesn't remedy the problem.
I'm not saying I have a great answer to the problem, I just don't see toll roads being effective.
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