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Less for locals

by MADISON HARDY
Staff Writer | April 13, 2021 1:00 AM

Legislation that would allocate $80 million toward Idaho transportation annually could be a big win for the state but little at the local level, officials say.

After passing the House last week by a vote of 59-11, House Bill 362 was approved by the Senate Transportation Committee Monday morning. By more than quadrupling Idaho’s yearly state sales tax proceeds to roads out of the general fund from 1% to 4.5%, the bill would provide $80 million to the Idaho Transportation Department annually. The legislation, if passed, could aid in securing up to $1.6 billion in bonds for ITD’s large infrastructure projects on the state highway system.

Any remainder of the sales tax proceeds, which HB 362’s fiscal statement estimated at $4 million in the fiscal year 2022, would be divided between local governments for roads and bridges. The $4 million slice of funding is very little, Kootenai Metropolitan Planning Organization Executive Director Glenn Miles said, and would likely not be a reliable financing source for project bonds.

“When you go to bond a major project unless you can show that funding is always going to be available to pay that debt back, it begs the question of whether to allow a joint project to continue,” Miles said. “There is an uncertainty of placing a bond when there is the uncertainty of revenues.”

Based on the language, Miles believes the bill would cause more uncertainty than good for local transportation organizations.

“The challenge is that no one knows what will exceed the $80 million on an annual basis, or what percentage goes to Coeur d’Alene or Post Falls or Hayden,” Miles said. “Then there is the uncertainty of what happens in 2025 or 2027, which also affects the bond rating.”

Wayne Hammond, the CEO of the Idaho Associated General Contractors, testified in favor of HB 362 during Monday’s committee, stating that local jurisdictions would receive more funding as sales tax revenue grows over time.

“Historically, sales taxes have grown at about a 6% rate per year,” Hammond said. “We estimate that in the first year, we will generate about $4 million for local governments, but that will grow significantly year over year.”

He estimated that by the year 2025, approximately $22 million would go toward local infrastructure alone. By 2031, a decade after the bill would have passed, Hammond said the proceeds from sales tax could be a 50/50 split between state and local governmental units.

“Our local roads are in desperate need of funding, and this long term will provide a funding source,” Hammond said.

The $80 million a year is just one of a series of transportation bills that have circled through the statehouse this year. Another, House Bill 308, which Gov. Brad Little passed into law earlier this session, confirms a one-time $126 million in state general funds to roads — $40 million for local jurisdictions and the remainder to ITD. Transportation was one of many items the governor made a key goal during his State of the State address and part of the “Building Idaho’s Future” plan. HB 362 intends to be the long-term funding source for the projects included in the program.

During a news conference at the Idaho Forest Group Athol location last month, Little said part of his reasoning for pushing transportation legislation was to combat the effects of Idaho’s rapid population growth on roadway congestion. ITD Communication manager Vincent Trimboli echoed these points and how it pertains to more efficient roadways.

“Idaho is the fastest-growing state in the country,” Trimboli said. “As the population grows, there is an increased demand for transportation infrastructure to meet the changing needs of users and address the growth that our system is seeing.”

If the legislation is approved, Trimboli said ITD would look at a list of projects around the state and allocate funding based on safety, mobility, and economic opportunity. With unanimous committee approval, the bill will move to the whole Senate body for a final vote.