The Plan of Attack -- How the Sprawl Lobby Proposes to Overcome Common Sense

Here's the memo about the financing discussion you (nor any other member of the regular public) weren't invited to, although "business leaders" were:

Funding workshop summary

TO: Salem River Crossing Project Management Team
FROM: Kristin Hull, CH2M HILL
DATE: April 7, 2008 (REVISED)

Introduction

The Salem River Crossing Project hosted a workshop to consider potential local funding sources for the project on March 5, 2008. The workshop was attended by more than 50 local elected officials, business leaders, and senior-level staff from the Oregon Department of Transportation (ODOT), the Federal Highway Administration (FHWA) and local jurisdictions. The workshop agenda included:

* Presentation on local funding options and considerations.
* Breakout groups to develop and discuss potential funding scenarios.
* Large group discussion of next steps to advance development of a local funding plan.

This memo provides a summary of the key themes that emerged during the small group work and large group discussion at the workshop.

Funding analysis tool

To support discussion at the workshop, CH2M HILL developed an Excel spreadsheet tool that allowed participants to test different tax and fee structures for funding of a new bridge. Participants were given a goal of raising $30 million each year, the annual debt service on bonds to support a theoretical $500 million bridge project. The $500 million cost was used as a placeholder for the cost of a the project since the project location and design, requirements for developing detailed cost estimates, and the amount of state and federal funding have not been determined.
The spreadsheet tool allowed participants to input amounts for the following potential local funding sources:

* Vehicle registration surcharge (Marion or Polk counties)
* Local gas tax (cities of Salem or Keizer, or Marion or Polk counties)
* Property tax (cities of Salem or Keizer, or Marion or Polk counties)
* Toll on new bridge
* Toll on existing and new bridges

Participants could enter a range of values for each tax or fee type, or geography to explore different ways the project might be funded. The 2012 annual total in the upper right portion of the input sheet indicated the surplus or deficit associated with each funding scenario.

Breakout groups

Participants were divided into six groups. Each group included a Project Management Team member who acted as the table’s scribe and facilitator. The goal of the breakout groups was for each group to develop one or more possible funding scenarios and to discuss the opportunities and challenges associated with each potential funding source. The breakout groups each shared one scenario and a summary of their discussion with the larger group.

Discussion summary

The breakout groups developed a range of funding scenarios that included different funding mechanisms. As part of the local funding scenario:

* All six groups identified a toll on both bridges, though the toll amount varied among groups.
* Four of the six groups identified a vehicle registration surcharge.
* Three of the six groups identified a local gas tax.
* Two of the six groups identified a property tax.

The large group discussed the key issues associated with each funding source. Some people noted that a property tax would be more progressive than other sources because it is keyed to property values and not a flat fee, and that a property tax would give people a voice in the decision about how to fund the bridge because it would require a vote. Some participants noted that a vehicle registration surcharge or fuel tax would unfairly tax low-income people. Other participants preferred vehicle registration surcharges and fuel taxes because those fees are directly related to transportation.

The group discussed how to involve the public in making decisions about funding and concluded that community members should have the opportunity to use the funding analysis tool to understand the funding choices and challenges. Some participants noted that it might be too early to ask the public to weigh in on funding choices since a bridge location has not been determined and detailed cost estimates are not available.

Many participants said that the community must be educated [emphasis added] about the funding need and choices and why local funding sources are needed before they are asked to weigh in on a funding package. The group discussed the need for public opinion research on the acceptability of different funding sources and discussed the idea of an advisory question on a ballot during a regular election as a way to take the pulse of the community.

Group 1
Group 1 noted that they were not satisfied with any of the alternatives because they did not allow for asking West Salem, the part of the community that would benefit the most, to pay a larger share than the rest of the area. This group suggested that a Local Improvement District (LID) contribution from West Salem should be considered in conjunction with other sources. Group 1 noted that if a property tax in the cities of Salem and Keizer was part of the strategy that the taxing district should take in the entire urban growth boundary, not just each city’s limits. Group 1 also suggested that more distant jurisdictions that might benefit from a new bridge, such as Lincoln County, should contribute to funding the bridge.

Group 2
Group 2 identified a combination of a tiered property tax and tolls as the most equitable way to fund the new bridge. The tiered property tax would levy a higher tax rate on properties in the cities of Salem and Keizer and a lower rate on properties in Marion and Polk counties (outside the cities). Group 2 suggested charging a $0.75 toll per crossing, but exempting residents and businesses in Salem, Keizer, Marion County, and Polk County. [In other words, the people the third bridge -- the cross-river commuters -- would cater to would not pay any more than their neighbors who oppose the bridge entirely and refuse to use it. emphasis added.] Group 2 said that this type of system would ask both users and the area’s residents and businesses to help pay for the bridge. The group also noted that the public could easily understand how much they are paying to construct a new bridge.

Group 3
Group 3 identified a combination of sources including a fuel tax, vehicle registration surcharge, property tax, and toll to fund the bridge. This group noted that a property tax is likely to be the least popular part of this scenario since it is not related to transportation. [Amen -- although they forgot to note that it also requires people who are trying to avoid making climate change worse support a project that does exactly that. Emphasis added.] The group noted that it was important to consider sources beyond tolls because the bridge would benefit people and businesses beyond those who actually use the bridge and because it is important to have more than one source of revenue as a risk management measure. The group suggested variable tolling as a way to reduce the negative impact to downtown businesses. The group also noted that some state funding such as lottery bonds might be available to help fund the bridge and that it might make sense to consider a larger city/county transportation funding package that would pay for the bridge as well as other needed projects.

Group 4
Group 4 suggested a combination of tolls, fuel taxes in both counties and a vehicle registration surcharge to fund the bridge. The group suggested that any funding package should raise more money than is required for capital costs and create a funding stream for bridge maintenance. The group said that a property tax should not be used to fund the bridge because property taxes are needed to fund other important services, but that the City of Salem could look to urban renewal districts to fund some pieces of the project. The group noted that a $1 toll/per crossing would not be palatable to the public. [Emphasis added]

Group 5
Group 5 developed a scenario in which one-half of the costs would be paid by tolls and one-half of the costs would be paid by residents through a combination of fuel taxes and vehicle registration surcharges. The group noted that this scenario would be fair to both users and area residents and would have relatively low collection costs since the state already collects these taxes and could easily collect the surcharges in the identified jurisdictions. The group noted that property taxes should be reserved for other needs in the cities and counties that do not have other funding sources.

Group 6
Group 6 suggested a vehicle registration surcharge and tolls to fund the bridge. The group suggested that the toll vary by time of day, be different for the old and new bridges, and be reduced for residents of Marion and Polk counties. The group noted that fuel taxes are not equitable and are generally quite regressive. [Emphasis added] The group discussed how a local gas tax, as opposed to a statewide gas tax, could penalize gas station owners inside the taxing district by making their gas prices higher than stations outside the district. The group noted that, while tolls are fair because users pay for the new bridge, a funding package that includes other sources needs to be developed to reduce the burden on commuters. [! -- Emphasis added]

Next steps
The group directed staff to move forward with the following next steps:

* Develop a strategy about how best to engage community members in discussions about local funding sources for the project. Consider when and how public opinion research might be used to test acceptability of local funding options.
* Post funding analysis tool to the project web site to allow community members to explore funding issues.
* Use the analysis of local funding options that will be completed as part of the Draft Environmental Impact Statement as a basis for further funding discussions.