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Transportation Funding Bill Becomes Law without Governor's Signature

Posted By Justin Ruen, Tuesday, April 11, 2017

Today Governor Otter announced that the AIC-supported transportation funding bill—Senate Bill 1206—will become law without his signature.  You can read the Governor’s transmittal letter outlining his rationale for not signing the bill.

Senate Bill 1206 will authorize up to $300 million in GARVEE bonds for I-84 between Nampa and Caldwell and other state transportation projects, as well as reauthorize the state surplus eliminator for two years with the revenue split 60% to the Idaho Transportation Department and 40% to local highway jurisdictions (cities, counties and highway districts).

The surplus eliminator revenue will be used for project grants to improve safety on roadways and pedestrian routes, enhance mobility, strengthen economic development, and repair bridges.  Currently, it appears that about $1.3 million will be available in surplus eliminator revenue for local highway jurisdictions in state FY 2017.

Senate Bill 1206 also dedicates 1% of state sales tax revenue to state transportation projects to enhance capacity and mitigate congestion, which comes out of the state’s share of sales tax revenue and does not impact local government revenue sharing.

Otter has long expressed support for keeping Idaho's transportation system funded by users and has opposed efforts to divert state general fund revenue for transportation funding, which pits transportation against schools and other worthy state priorities.

"While I object to significant portions of this legislation for the reasons outlined below, the imminent and ongoing risk to our citizens and the negative impact on our key corridors of commerce are too great to keep Senate Bill 1206 from becoming law," Otter said.

"...I am troubled by the determination—particularly in the House of Representatives—that General Fund revenue now must be an ingredient of any transportation revenue plan.  I have said repeatedly and clearly that I oppose putting transportation in direct competition with education and our other constitutional and statutory commitments for General Fund revenue.  So, while I hope that lawmakers will reconsider the provision carving out 1 percent of State sales tax revenue from our General Fund, House leadership has expressed to me that such reconsideration is highly unlikely." 

"While increasing our bonded indebtedness by issuing up to $300 million in additional GARVEE bonds authorized by this legislation is not my preferred option, it at least provides a noncompetitive revenue source for large construction projects like that on an already dangerously congested Interstate 84.  I also remain relatively confident that our federal highway funding distributions will continue to cover debt service on our GARVEE bonds.  So, despite my misgivings, the pressing safety issues on I-84 compel my grudging approval."

"I advise and implore [legislators] to look beyond quick fixes to proposals that are fiscally responsible within the context of all our budgetary demands, not dependent on year-to-year financial windfalls—either federal or State—and sustainable beyond a near-term window.  It also should enable and encourage local highway jurisdictions—which have taxing authority of their own—to become more self-sufficient and accountable to their constituents by becoming less dependent on State-generated revenue."

"I hope future deliberations will more broadly consider such measures as a fee on vehicle miles traveled to supplement the fuel tax and vehicle registration fees as the core elements of how we pay for the roads that safely connect us in order to effectively grow the economy that sustains us."

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