In This Issue

	Gas Tax Holiday Could Drive Up Prices
	Groups Oppose Tax Hike for Natural Gas Industry
	Utah’s FrontRunner Up and Running
	Community Rallies Against Intercounty Connector
	Los Angeles Snatches up Grant New York Passed On
	New Road Funds in Arizona Declining
	Alcohol Suspected in Construction Worker’s Death
	Nevada Kicks Off First Design-Build Project

Gas Tax Holiday Could Drive Up Prices

NEW YORK – Presidential candidate Hillary Clinton has joined Senator John McCain’s call for a federal gas tax holiday this summer, despite expert’s concerns that the move could lead to more demand and push prices higher. Earlier this month, Republican McCain called for a hiatus in the 18.4-cent tax from Memorial Day to Labor Day, a peak driving time for vacationing Americans.

“The effect will be an immediate economic stimulus – taking a few dollars off the price of a tank of gas every time a family, a farmer or a trucker stops to fill up,” said McCain, his party’s presumed nominee.

Assuming the average gas tank has a 13-gallon capacity, removing the 18.4-cent-a-gallon tax would save drivers about $2.35 per fill-up. The summer break would cause a $10 billion funding gap, however, most of which would have gone toward funding highway projects.

“It’s not a prudent thing to do,” said Tom Kloza, chief oil analyst at the Oil Price Information Service, a research firm. He said the money saved by motorists would do little to stimulate the economy, and the gas tax revenue is desperately needed for highway repairs.

One of the most effective ways to lower gas prices is to reduce demand, Kloza said. In addition, cutting the gas tax may compel motorists to drive more – resulting in higher gas prices and primarily benefiting the oil companies.

“Look, somewhere down the road you have to use less,” said Kloza. “As painful as it might be, higher prices do sway behavior toward a more energy disciplined America.”

The idea of a gas tax holiday has gained surprising traction with two out of three presidential candidates supporting some version of the proposal. The price of gas has gone up a dollar in the last year and none of that amount is attributable to a federal gas tax increase. Yet, that is the component being attacked here. The idea will have a minimal impact on users but will blow a huge hole in the Highway Trust Fund. TW

Groups Oppose Tax Hike for Natural Gas Industry

Alabama - Several groups are working to push legislators to reject a tax hike for companies that drill for natural gas off Alabama’s coast. Organizers of the business and anti-tax groups say the tax measure, backed by Gov. Bob Riley’s administration, would result in higher energy prices for consumers and industries, hurt the state’s economy and lead to lost employment.

Alliance groups that assembled Monday outside the State House included the Alabama State Black Chamber of Commerce, 60 Plus, Manufacture Alabama, the Alabama Petroleum Council and Americans for Tax Reform.

The measure would cut some expenses that oil companies pay before they pay taxes and reduce the tax rate from 10 percent to 8 percent. However, the bill also levies a temporary 6 percent tax on gross proceeds that would be in effect until the state collects enough funding to cover all the refunds at risk in a legal dispute with Exxon Mobile. The maximum term for the temporary tax is six years.

The House Government Appropriations Committee passed the measure last month, but it has not yet been brought before the entire House. The bill is Gov. Riley’s second attempt this legislative session to give oil companies a tax hike after Exxon Mobile convinced the House committee in March to reject an earlier proposal.

While not specific to transportation, this article reflects the on-going tax debate on any number of taxes in place or being considered. The search for a tax that can be levied on a group or individuals that won’t care, complain or fight back and who elected officials won’t have to face in public or on election day continues. That would be the ideal tax to levy. TW

Utah’s FrontRunner Up and Running

Utah - A new mode of transportation available to Utah residents known as FrontRunner made its debut last weekend. The first leg of the commuter rail system, running from Ogden to Salt Lake, was partially funded by a quarter-cent sales tax approved by voters in 2000. The federal government pitched in as well, covering 80 percent of the $611 million cost.

Transportation officials expect the train to relieve the daily gridlock for commuters who live north of Salt Lake City and commute downtown for work. They also hope the high gas prices will draw more passengers to the system.

The double-decker train cars run at up to 80 mph, with a maximum fare cost of $5 for a trip from Ogden to Salt Lake City. Monthly passes can also be purchased for $145, which can also be used for TRAX light rail or UTA bus rides.

Saturday also marked the opening of the UTA’s TRAX extension from downtown Salt Lake to the FrontRunner station on 600 West. The southern leg of FrontRunner, carrying passengers to Provo and Brigham Young University, should be completed within a few years.

Congratulations to the Utah Transit Authority for the long-awaited opening of FrontRunner. TW

Community Rallies Against Intercounty Connector

Maryland - Residents of a Montgomery County community gathered in protest last weekend at the edge of their neighborhood’s fallen woods, saying there is still time to stop the long-debated Intercounty Connector highway. The Derwood community group blames Gov. Martin O’Malley (D) for allowing the six-lane, $2.4 billion highway project to proceed.

Approximately 12,000 homes are within 500 meters of the 18.8-mile project, which extends to the Laurel area in Prince George’s County. Officials say the project will relieve east-west traffic congestion beyond the Capital Beltway. The state has spent $300 million to plan, design and purchase land for the toll road, which will open in segments beginning in 2010. Officials say $1 billion in contracts for the roadway have been awarded.

The Derwood community is among the first to be significantly affected by the construction. A local Homeowners Association organized the rally, where organizers encouraged residents of other communities to come get an early look at what the project will bring. A federal court recently ruled in favor of the highway, but an appeal is pending.

Los Angeles Snatches up Grant New York Passed On

California - Los Angeles will receive a $213 million federal grant to buy buses and free up city funds to convert HOV lanes into high-occupancy toll (HOT) lanes, according to U.S. DOT officials. A spokesperson for the DOT confirmed the money will come from a proposed $354 -million grant for a congestion fee program that New York lawmakers failed to advance.

“New York didn’t get the legislation they needed to secure that money,” U.S. Department of Transportation spokesperson Melissa DeLaney said. The department said it will soon announce where the remainder of the money originally promised to New York will go.

With city funding freed up with the grant, Los Angeles will be able to convert 85 miles of HOV lanes to HOT lanes by the end of 2010, U.S. Transportation Secretary Mary Peters announced Friday, April 25.

Electronic tolling devices have already been installed on the roadways, enabling drivers to use the less-congested lanes for a premium. Congestion charging methodology will be used to vary toll rates based on traffic levels and travel times, and the revenue will help fund mass transit, Secretary Peters stated in a press release.

New York legislators decided not to vote on New York City Mayor Michael Bloomberg’s congestion pricing proposal before their federally-imposed deadline of April 7. California state lawmakers have until Oct. 15 to pass legislation to implement the $213 million proposal for Los Angeles.

New Road Funds in Arizona Declining

Arizona - Much of Arizona is expected to run out of funding for new roads within the next decade, according to recent state estimates. By 2015, funding for transportation will drop to a level where the majority of the state will only be able to preserve and maintain existing roadways. Pima and Maricopa counties will be facing tight budgets as well, but they are the only ones in the state that collect a half-cent transportation tax.

Arizona Department of Transportation Director Victor Mendez says the situation is dire. “No expansion. No new projects… That’s what we’re facing,” he said, in response to a 21-page assessment at the center of a recent planning document. In the report ADOT identifies almost $42.6 billion in critical transportation needs and says the state is at a crossroads for transportation-funding.

In response to the report, a 30-year, one-cent statewide sales tax and increased participation from the private sector in transportation projects have been proposed. The plan is endorsed by Gov. Janet Napolitano, and a group of economic-development and business leaders called the TIME coalition (Transportation & Infrastructure Moving AZ’s Economy).

Supporters are hoping to get the proposal, which includes projects to serve the state’s transportation needs through 2030, on this year’s ballot. Mendez says the list of projects may still change as planning continues. “All states are struggling to keep up with rising costs, but the problem gets amplified in the fastest-growing state in the country with one of the lowest gas-tax rates,” Mendez said. “Our message is: Doing nothing is not a good option.”

Alcohol Suspected in Construction Worker’s Death

GALLUP, New Mexico – Alcohol may be to blame for a construction worker’s death this week at a New Mexico construction site. 31-year-old Manuelito resident Bennie Duboise fell more than 20 feet from the Second Street bridge reconstruction project and died from his injuries minutes after arriving at the hospital.

The Gallup Police Department is still investigating the fall, however officers say at least four other employees of Albuquerque contractor A.S. Horner Inc.’s construction crew had been drinking before the accident occurred. Duboise’s blood alcohol level was three times the legal limit, and he was not wearing protective gear when he fell. The construction foreman, who fled the scene of the accident in a vehicle while intoxicated, has been subsequently fired by A.S. Horner.

Gov. Bill Richardson (D) has directed the New Mexico Department of Transportation to shut down work on the bridge and two others in Gallup involving A.S. Horner and to “review all contracts and explore appropriate action, including termination.” Richardson added, “With all we’ve done to combat drunk driving and alcohol in this state, this behavior is unacceptable. I want to be sure that the contractor is held accountable.”

“NMDOT expects strict compliance with OSHA safety rules with anyone working on our projects, from contractors through to their subcontractors,” said S.U. Mahesh, public relations director at NMDOT.

A.S. Horner has been in business since 1927, performing highway and civil construction in New Mexico, and is currently the general contractor on multiple projects with NMDOT throughout the state. The company set a record last year in completing another I-40 overpass in Albuquerque in 90 days.

Nevada Kicks Off First Design-Build Project

Nevada - The Nevada Department of Transportation broke ground on the $234 million I-15 North Widening Project last week, which will ease the commute for more than 170,000 drivers that use the interstate every day. The highly anticipated project is the first ever design-build project for the state, and will extend from the spaghetti bowl to Craig Road.

“We’re speeding up the process,” said NDOT Director Susan Martinovich. “Southern Nevadans will get traffic relief sooner with the design/build system that allows actual construction to start while the designing is still taking place.”

Plans call for the interstate to be expanded from six lanes to 10 between the spaghetti bowl to Lake Mead. From Lake Mead to Craig Road, the lanes will be widened from five lanes to eight. The project, awarded in June, and is scheduled to be complete by August 2010.