Utah will begin the single largest highway project in the state’s history at a cost of about $1.6 billion. The reconstruction of Interstate 15, the state’s major north-south corridor, is part of the ten-year, $3.6 billion highway construction and renovation plan adopted by the 1997 Legislature. Working with the Governor and Legislature, the Utah Office of Planning and Budget has established a funding framework for the ambitious highway construction and renovation plan.

1. Motor Fuel Excise Tax and User Fees The legislature increased the diesel and gasoline tax by $.05 a gallon and diverted a ½ cent tax for underground storage tank removal to generate $63.3 million. In addition, the vehicle registration fee was increased by $10 and trucking fees were increased by approximately 10% for an estimated gain in revenue to the Centennial Highway Trust Fund of $16.5 million.
2. Sales Tax The legislature's package also included a 1/8^th-cent reduction in sales tax that will reduce General Fund revenues by approximately $34.2 million. It also includes, beginning in 2000, the redirection of 1/64^th cent sales tax currently dedicated for the construction of Olympic facilities to the Centennial Highway Trust Fund.
3. Revolving Loan Fund The Transportation Corridor Funding bill (HB 111) imposed a 2.5% tax on short-term leases and rentals of motor vehicles not exceeding 30 days. Revenues from this tax, estimated at $3.1 million for FY 1998, will go into the Transportation Corridor Preservation Revolving Loan Fund and will be available to preserve transportation corridors and promote long-term statewide transportation planning.
4. Point of Collection The last piece of the funding plan for transportation is an approximate $10 million increase in revenue from changing the collection point for diesel fuels tax from dealers to refineries and terminals.

The legislature’s package, in total, increases revenues dedicated to highways by almost $93 million annually, while reducing the General Fund by about $34.3 million. Local and county governments will receive more that $18 million of this increase to help with local infrastructure needs. Additionally, the legislature authorized up to $600 million in bonding for highways over the next four years. It also increased to $78 million the ongoing General Fund appropriation to the Centennial Highway Trust Fund.

For more information on Utah’s initiatives, contact Joe Brown with the Office of Planning and Budget at (801) 538-1390 or email him at jbrown@gov.state.ut.us.