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TEDZ highway funding plan hits road block

An Idaho House panel voted down a plan to use future sales tax funding to pay for new highway projects March 14. The Transportation and Economic Development Zones plan would have had projects costing more than $50 million and having a sizable projected economic impact pay back construction bonds from sales tax revenues.

Opponents of the plan said they were concerned with tying future state general fund tax money to roads. Most road funding in Idaho comes from the federal government, the state gasoline tax, and vehicle title and registration fees.

“This is a whole new concept,” said House Majority Leader Mike Moyle, R-Star. “The bonding part tied to the sales tax revenue is a big problem for me. I don’t care about using general fund money for roads, but I do care about using general fund money as leverage to borrow.”

Other critics said counting on road funding to provide economic growth to pay for it isn’t a certainty. Rep. Lenore Hardy Barrett, R-Challis, said the axiom from the movie Field of Dreams isn’t always true.

“If they build it, they may not come,” Barrett said during a House Revenue and Taxation Committee hearing on March 14.

Lobbyist Jeremy Pisca, who has worked on the TEDZ plan for more than a year, said the safeguards in the bill would mean only projects where growth is very likely would be approved. An independent economist would need to research any potential funding plan, which would also need to be approved by the state transportation and commerce departments.

“You may only build it with an absolute certainty that they are going to come. This is not speculation,” Pisca said.

Pisca said the funding mechanism could help with several road projects, including building out State Highway 16 to Interstate 84 in Meridian and improvements to Chinden Boulevard, which turns into State Highway 20/26; State Street, which becomes State Highway 44; and Highway 30 in Twin Falls.

The Revenue and Taxation Committee voted to hold the TEDZ plan in committee, likely ending its progress this year. Several conservative Republicans on the committee joined Moyle and Barrett in opposition, as did Boise Democrats on the committee. Both the cities of Boise and Caldwell opposed the legislation.

“TEDZ would have put general fund dollars at risk to support new road projects,” said Adam Park, spokesman for Boise Mayor David Bieter. Park said that general fund money is being strained just by funding education. “It’s too risky of a mechanism. We do want to find other ways to meet our transportation needs.”

About Brad Iverson-Long

Brad Iverson-Long is a reporter for the Idaho Business Review, covering banks, financial services, technology and new business.