Friday, September 19, 2008

Taking It North to Alaska

We are often so wrapped up in our transportation gridlock that we fail to see others also suffer from that gridlock.

In an effort to break our gridlocked perspective, the Chamber's Alaska Committee took the issue of the proposed container tax to Alaska. You might ask "Why?" Well, the answer lies in that Alaskans have already proved themselves interested and involved. When that container tax was originally introduced into our legislative session, Alaskans, including the much-storied Gov. Palin, got involved with discussions with our Legislators and our Governor.

Taking the opportunity afforded by Tacoma's long-standing involvement in the annual Alaska State Chamber of Commerce Conference with a Tacoma Breakfast Briefing, the Port of Tacoma's Sean Eagan was the selected keynote speaker. His topic: What Should Alaskans Care About Washington's Transportation Infrastructure?

Most Alaskans automatically assume Washingtonians are looking for someone else to fund their transportation needs when we talk of a container tax, just making money at Alaskans' expense and never considering their wishes or interests. They see it as another in a long line of disappointments between the economic partnerships linking our two states.

We can certainly be sympathetic with their viewpoint, because after all, we've done this to ourselves. Beginning in 1995, Washington stopped making new investments in transportation. It's true we've begun to try to get ourselves out of the pothole we let time and neglect dig us. Our 2003/2005 two transportation packages of $11 billion, and the 14 cent gas tax are examples.

But overall, we've left a lot undone: SR-520, SR-99 Viaduct, SR-167. And now, we face another budget crunch:
  • $714 million shortfall in an $11 billion package
  • $137 million next year (in a $7.6 billion transportation budget)
  • That 8% of the general fund of $2.6 billion

The container tax proposal was for $50 per TEU (acronym of twenty-foot equivalent unit the once prevalent length for containers, now most typically 40 feet long) or $100, empty or full of cargo, inbound or outbound. Unfortunately, the proposed Freight Investment Account lacked details leading skeptics to suggest its use for other than freight infrastructure. Those who shipped containers quickly yelped, saying why us and why not our competitors for barge, breakbulk, etc. The overall response was a (surprise!) legislative study.

That study, chronicled elsewhere, essentially said such a tax was economic suicide. The so-called Diversion Study postulated a decline in container volumes of 30%, a loss of 9,415 jobs and $591 million in lost wages.

So, what to do? While not making all the above points, Eagan did enumerate the options and the roadblocks for funding:

  • Gas tax revenues are down because of gas prices and staycations. But, would a healthy 40% increase in gas taxes to 37.5 cents work? WA already is way ahead of most of the pack (of states) in its gas tax.
  • Imposition of a license tax fee or vehicle excise tax? Oh yes, we had a 2003 citizens initiative on that subject. Anyone want to tackle it?
  • Another initiative for property taxes, with the declining values in the housing market?
  • A sales tax increase - already recently turned down by voters when they rejected handily the regional transportation package last November.
  • A vehicle weight fee increase - with the numerous increases already heaped upon the trucking industry of recent years?
  • An income tax, prohibited by the state's Constitution, and an albatross for anyone who wants to wear it.

Well, so far the stakeholders have not yet stepped up to the plate with alternatives. Most agree that we have a problem. Most agree that the proposed solutions, especially the container tax, are not viable.

So what is? Eagan challenged Alaskans, in their own best interests, to seek affirmative solutions and not just express opposition. If no container tax, then what revenue source? Without a revenue source, no transportation infrastructure investment. If no investment, we face increasing congestion, deteriorating infrastructure, delays, shifting market shares in throughput and higher prices for delivered goods anyway. And incidentally, deleterious effects on air quality for PM2.5 and ozone.

What's your suggestion?

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