Kulongoski's transportation and jobs plan

Earlier this week, Governor Ted Kulongoski unveiled the details of his $1 billion plan to create jobs and rebuild Oregon's infrastructure.

The Gresham Outlook editorialized:

With Oregon entering a recession, Gov. Ted Kulongoski is correct to suggest an old-fashioned public-works program to keep thousands of people on the job.

The governor’s proposal to raise and spend $499 million a year on road projects would bring immediate benefits to Oregon’s economy by giving a boost to the construction industry. But the governor’s plan also would lay a literal foundation for future economic success in Oregon by improving a decaying transportation system that’s critical for the movement of goods and services.

The O's news coverage focused on the financing:

The governor proposed about half a dozen tax and fee increases, including a 2-cent gas tax hike, and more than doubling the annual fees for car title and registration. He also would borrow $600 million, raise the tobacco tax by 2 1/2 cents and take $16 million in lottery money to pay for railroad, mass transit and port projects.

If approved by the Legislature, the package adds up to Oregon's biggest-ever commitment to transportation.

Oregon falls $1.3 billion short in maintaining state highways to handle the current level of traffic, state officials estimate. That doesn't include all the deferred maintenance on city and county roadways.

The tax and fee increases will be controversial when lawmakers convene in January, but business groups are pressuring legislators to boost spending on transportation. The 24-cent state gas tax hasn't been raised since 1993, and inflation has cut its buying power in half while Oregon's population has surged.

Discuss.

  • yokem55 (unverified)
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    The gas tax hike I'm okay with, but would prefer the registration hike to be a bit more modest. Going from $54 every 2 years to $162 ever 2 years seems a bit much. The registration fees down in Cali aren't that much.

  • Joel H (unverified)
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    Am I the only one who has a "wait, we have a governor?" response to the occasional news about Kulongoski?

    Not that that's a bad thing.

    Anyway, hurrah for this. It's probably worth it for either of Highway 97 or 26 alone. And by the way, considering that Washington's gas tax is 12 cents higher than Oregon's, but the average Washington price is just about the same as the average Oregon price, if we could determine what causes that, maybe there's a way to make the tax seem invisible.

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    Seems to me that gas prices just plummeted $1.50-$2.00 a gallon. We could handle a 4 cent or 6 cent gas tax.

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    I suspect this transportation package is being oversold as a jobs program. The transportation projects should stand or fall on their own merit.

    Unless the transportation project spending is deficit financed, like the proposed federal stimulus, it just takes money from one form of spending (and jobs) by taxation and spends it on another. It is hard to calculate net job growth or loss. And, to the extent that some construction funds are spent on equipment or materials from out of state, the projects may net less jobs in state.

    Hiring more teachers, for example, because more of the funds go for personnel rather than materials, might provide more of a job stimulus. And hiring more engineers, transportation planners, architects, energy analysts, and other knowledge workers to develop ideas and build our 21st century economy would be even better. The idea is to get them working, and the money flowing, rapidly.

    To the extent that the transportation projects are debt financed, note the $600 bonding, it could provide a stimulus now. But how is the bonding finance?

  • Law-n-Order D (unverified)
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    I am OK with the governor's plan, however, many contruction firms cut their costs with an undocumented workers. Somebody needs to vet the companies to make sure they are law abiding. I would suggest Gordon Smith since apparently he has experience with this kind of thing.

  • John Petrina (unverified)
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    I agree with most of you, and where this might not be the time for this, I'm sick of our state exploiting the addictions of individuals, even if it is for a greater good. Where I might buy a lotto ticket now and again thinking of it as a donation, I think the majority of our citizens that gamble do so out of habit. We should be banning these practices (like the public smoking ban). I wish we wouldn't take advantage of these people, and let them deal with their addictions on their own. If we are trying to reach a higher ethical ground while improving our economy, I think we should make as few compromises as possible. I understand that this is a industry that helps our state, but I can't stand for unethical practices.

  • Kurt Chapman (unverified)
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    If, as stated, the population has surged, then more vehicles are on the road purchasing fuel. So the argument against the lost purchasing power of the existing $0.24/gal tax is moot. How does WA fuel generally cost the same with the additional $0.12/gal state tax? Simple; WA has faith in their driving population's ability to pour fuel into their own vehicle. WA does not have a Full Employment for Gas Station Attendants law.

    I'll support the fuel tax hike with a repeal of thou shall not pump your own fuel.

  • Jonathan (unverified)
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    Kurt- Except the increase of income from the gas tax due to an increase in drivers is offset by the increased burden on and need for infrastructure caused by the new drivers.

    I would rather have the gas tax go up then the registration fees. The gas tax increase could be compensated for by driving less but the increase in the registration fees hits all drivers regardless of the frequency of their driving.

  • joel dan walls (unverified)
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    I don't get it. It seems as though everyone is thinking of this as a Keynesian scheme, but excuse me: the state, unlike the federal government, is not allowed to run a deficit. Thus public works per Kulongoski require tax increases in a recession, an approach that, if I recall correctly, Herbert Hoover tested rather thoroughly.

    considering that Washington's gas tax is 12 cents higher than Oregon's, but the average Washington price is just about the same as the average Oregon price...

    Actually, gasoline is consistently about 8 to 10 cents per gallon cheaper in Vancouver than in Portland.

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    If memory serves the price of gas in 1993 was ca. $1.00/gallon (possibly boosted a bit above that by the Gulf War?); the proportion of the gas tax as a component of the pump price has shrunk substantially, perhaps by as much as half, which is the point about not keeping up with inflation.

    Dave Porter doesn't quite connect the dots between the two parts of his argument. Assuming for the moment that money spent by the state to create employment merely reduces private employment at the same level (not actually an obvious proposition, since private profits may go to things like exorbitant upper management compensation and shareholder dividends), Dave also argues that the eroding transportation infrastructure is itself a drag on the private sector. Thus the tax increases (including the opportunity costs of revenue used to repay bonds plus debt service) provide the employment increment plus the investment in public capital infrastructure that boosts the private economy, ultimately probably including private employment, at the cost of foregone short-term private employment that wouldn't address the need to redress this wasting public good that also is dragging down private economic activity.

    Sometimes public investment in kinds of things that that private sector won't supply in the way needed (like transportation infrastructure) is a better use of money, from the point of view of the economy, than leaving the money untaxed for private spending and investment.

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    It's important to remember: investing in transit creates more jobs, dollar for dollar, than investments in roads. And investing in fixing and maintaining roads creates more jobs than building new roads. (STPP Study.)

    We need a balanced transportation package, and we need to make sure transit is a significant part of that package (as one quarter of Oregonians can't drive, and there's this thing called climate change).

  • LB (unverified)
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    I'd like to see this have a strong focus on rail. As for the taxes, as I understand it they are at best flat, at worst regressive. Hands off of lottery money. Use lottery money for education. Gas taxes make sense for cities where public transportation is widely available but are unfortunately regressive for rural communities. Also, borrowing money is not the wisest course of action. Here are two alternative ways to raise the money:

    Car title taxes could be made progressive. Eliminate the fee for the first vehicle for individuals with vehicles worth less than $5,000 - two for married couples. Progressively increase the fee for vehicles worth more than $5,000 with tax breaks for fuel-efficient vehicles. Its a tax on luxury, but better than a traditional luxury tax because it does not encourage buying out of state.

    Tax Big-Box stores. Let the large businesses who contribute to the most traffic pay the bill.

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    Chris,

    I was primarily arguing a point similar to joel dan walls. A tax financed public works program is not a significant economic stimulus or jobs creation program.

    I did not argue, but might, that "eroding transportation infrastructure is itself a drag on the private sector." Certainly, transportation projects should be judged on their own merit, project by project, whether each will contribute more to the economy than the alternative uses of the funds prior to taxation. Creating more jobs would not be part of the analysis. So I think I agree with the latter part of your argument. Although calling something a public works project does not necessarily make it so. And some public works projects are better than others.

    <h2>The debt financed (bonds) component is a potential economic stimulus and job creation program. It brings funds from the future to create jobs in the present. The money can also be wasted, just leaving our future geneations with the debt. What I do not know is whether the bonds will be paid off from transportation-related fees and taxes or from more general government taxes and fees. If the later, then the transportation projects should be in competition with other kinds of projects, such as education and energy, to name some of my priorities.</h2>

    I've argue on my own blog (here) for a revenue neutral, incrementally increasing gas tax as a priority for combating global warming and improving our foreign policy by defunding troublesome petro-states. The yearly increments should be at least 10 cents.

  • Rose Wilde (unverified)
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    I'm curious what Chuck Sheketoff has to say about this. I seem to remember a policy paper from the Oregon Center for Public Policy about what types of government spending/programs are most advantageous for business. I thought the argument was the investing in infrastructure was exactly the right thing to do to promote private business and thus stimulate the economy.

    As for hiring teachers, in general I'm for it, but I wouldn't argue that it would have any short or even medium term payoff -- so investing in teachers should be a routine commitment of states, not an emergency measure.

    I wouldn't think it would be feasible for the state to spend it's way out of recession. We don't have that kind of money. Besides, I just heard we're cutting 20% from state budgets, so we can forget about that idea.

    Seems like investment in sustainable infrastructure, with a heavier emphasis on "greener" options would be appropriate at this point. I doubt there is any quick fix here, so let's make sound decisions now rather than allow the "crisis" to drive us into poor decisions under pressure (read The Shock Docterine for more on that).

  • George Seldes (unverified)
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    A Mid-Valley cycling advocate and community leader posted this to a transportation discussion list in response to the Gov's plan:

    The Gov's transportation package is a major disappointment and I believe that transportation activists should oppose it. I understand that it is unlikely that we could get a constitutional amendment to open up the highway fund or, for that matter, be successful in banning the use of property taxes and systems development charges in building roads. We already are grossly undercharging motor vehicles for the demands that they are placing on the transportation system. Currently the highway fund is only covering about 1/4 the cost of simply maintaining the roads that have already been constructed. This is moving in exactly the opposite direction from any type of congestion pricing or mileage based fees and will send the wrong price signal to motorists. Congestion cannot and will not be resolved if use of the roads is undercharged to the extent that it now is. We are consuming invested capitol at an alarming rate. (My cat will predecease me, but if I had children I would be ashamed of the massive hole we are digging for them.) The Gov's proposed transportation package will exacerbate this state's transportation problems. There will not be enough benefits for alternative modes from his approach to even come close to mitigating the damage that will be caused. I believe that transportation activists should present a united front by letting the Gov and legislature know that we refer it to the ballot if it passes. In conjunction with the anti-tax crowd, we could and should kill it. (Politics makes strange bedfellows.) > In other words, the bulk of the money is to come from making car ownership more expensive, which only increases the incentive to drive more (as higher fixed, rather than variable costs, punish those who drive less). > > In a time when visionary leadership is required, we have this weak mush of status-quoism. Sad. > > What we need is a concerted effort, led by the governor, to change the constitutional provision that limits gas taxes to funding roads. > > If we can't get there, then we ought to insist that ONLY gas taxes fund highways -- no property taxes, no vehicle registration fees, no titling fees, nothing. If you want to lock up the one funding stream that links costs to usage, then you should subsist on that alone.
  • Joanne Rigutto (unverified)
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    Concerning peoples' comments on using the increase in gas tax and vehicle registration fees for public transit instead of roads, either new, or maintenance of existing roads - this is the very reason that an increase in the gas tax is voted down consistently. Given the shape of some roads, which is deplorable, people who drive either by chioce or by necessity, have a hard time swallowing a fee increase on a specific activity - driving - that won't be used to support the infrastructure necessary to that activity. Also, while a registration fee will nick the electric and hybrid vehicles, an increase in the gas tax will have little to no impact on revenue generated from those vehicles.

    I could go for a flat rate VMT fee as long as drivers weren't punished for driving more than someone in government decided they should. A flat rate VMT would generate revenues that are directly related to the amount of damage a vehicle is doing to the road that it's opperated on. The more you drive, and cause wear to the road, the more you pay. As long as the money generated is kept at a rate that reflects the maintenance costs of the specific infrastructure that's being used and is tied directly to the rate of wear and tear on that infrastructure being caused by the level of useage is fair. Charging a fee for the use of a specific infrastructure - the roads - while swearing up and down that this money is going to be used to maintaing that infrastructure, then turning around and using it for something else, is not only not fair, but that type of consistent behavior on the part of our legislature is the reason why things like an increase in the gas taxes keep getting voted down.

    With regard to the idea of congestion/corridor pricing, which I've been hearing about ever since ODOT did the pilot project in Portland which ended last year, I find it ironic that this type of VMT pricing will punish the very people that drive because they have to. If you work construction, on a commercial job your normal shift runs from 7:00am - 3:30pm, meaning you're going to drive during congestion pricing. If you work construction, it's almost impossible to take public transportation. You're quite often going to add 2-3 hours each way to your trip. You also are going to be severely limited in the tools you can take on a bus or train with you. And in the case of people working on road construction, I don't think that people on the bus would take too kindly to someone covered in tar and road grime sitting beside them on the way home. I've taken the MAX before when I lived right on the MAX line out toward Gresham and I was working on a building in downtown Portland. Then it made sense as it took the same amount of time or a bit less to take the MAX as it did to drive. Boy did I get some looks on the way home. I'd have rock dust and what not on me from working stone all day. Even with compressed air and a foxtail you can't get all that off.

    I don't have a problem with public transportation, I understand that it's one of those things that helps society run more smoothly. However, I have a big hairy problem with being lied to by a govenrment that proposes to increase a fee to support one thing and then turning around and using it for something entirely different.

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    When he presented his package, Gov. Kulongoski said he was open to making the registration fee progressive, like Minnesota has done.

    From DMV.ORG: "How much is vehicle registration in Minnesota?

    First-time registration is based on the value of the vehicle. The first renewal is a maximum of $189, while second and subsequent renewals are a maximum of $99. For vehicles 10 years of age and older, the minimum registration charge is $35. Motorcycles are $10 annually, and mopeds are $6 annually."

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    Gas tax increase: no brainer!

    Electric car factory in Oregon: ain't happening.

  • dan (unverified)
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    Its about time Oregon politicians quit saying retarded statements like they want to creat jobs or "green" jobs.

    It is honestly one of the most misguided ideas that the government should directly create jobs.

    Look at the gas stations that have lines of cars lined up because oregonians are not allowed to pump thier own gas.

    Creating jobs artificially is just creating inefficiency which does nothing but create low wage economy slowing petty jobs.

    Lets let kulongoski put lots of money into ineffiency and tax us into poverty. If we want to create green jobs then lets pay people to turn wind turbines when the wind stops blowing. Lets line up people on stationary bicycles and hook them up to generators to produce power.

    This is the stupidest idea ever. You liberal retards need to take a class in economics.

  • LT (unverified)
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    "Look at the gas stations that have lines of cars lined up because oregonians are not allowed to pump thier own gas."

    Dan, the's fighting words, with a typo besides. Self serve gas has been a ballot measure, and it has been legislation. There were more people opposed than supporting. Therefore, it did not pass. There was not some dictator telling us we weren't "allowed" to do it, but the voice of people who didn't want to get out in the rain and pump gas when other Oregonians could be employed to do it. Supporters wanted simple "self serve gas should be legal" language, others wanted protections spelled out--must there be a human to help those who can't pump their own gas or deal with malfunctioning pumps? If people have to pump their own gas and then go inside to pay, how is that "quicker"?

    Are you aware that paralyzed veterans have sued to have the right to have their gas pumped for them in self serve states? They won that right.

    Did you know that Oregon has a card-lock system for people who sign up? Organizations which do a lot of driving can sign up for such systems---the child care program where I worked switched to that system.

    Or don't you care about serious discussion? Your last line shows someone who would rather engage in name calling.

  • George Seldes (unverified)
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    Not only should we not eliminate pump jockeys, but if we want to make a serious step towards a greener transport system, we need to pass a law that every Oregon gas dealer must offer at least one lane that is open whenever the gas station is open where, when gas is sold, the pump jockey must offer to check the customer's tires and inflate them to the proper pressure at no charge. (The state can loan the gas stations the money for installing the air-compressors at zero-interest.)

    The wingnuts criticized Obama for saying that people need to check their tire pressure, but he was absolutely right. With today's radials, people can be seriously under-inflated and not realize it. Getting proper tire inflation in the Oregon vehicle fleet would do a lot to reduce consumption (and, therefore, greenhouse gases) at essentially zero cost.

    Even all-electric vehicles need proper tire pressure -- they could be charged $1 or something if they come in to have their tires checked without buying gas.

  • Zarathustra (unverified)
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    The wingnuts criticized Obama for saying that people need to check their tire pressure, but he was absolutely right.

    Get ready to hear that constantly. It's been a long time since Carter and Kennedy- and Bill hid it- but this country is deeply, deeply, oh so deeply, anti-intellectual. Particularly boomers.

    That's my theory for why Sunnunu never amounted to more. He's got all the very best scumbag credentials, but intellect trumps everything. I'm seriously more surprised by Obama's election that he is intelligent than that he is black.

  • Anon (unverified)
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    The building trades, longterm political allies of Teddy K will rejoice at the new public works projects with PWR wages will engage primarily union building trades workers and help out the major construction outfits including their subcontractors. Whether its "jobs" or "transportation infrastructure" , money seems to be spent on the same things and spread out the same. The key is whether the package is different in anyway than the same old same old. Frankly, increased gas prices was a boon and incentive to developing better mass transit and it reduced the load on highways, push for more and more lanes etc. and reduced traffic congestion. People combined trips, trying to be more efficient in car use. Not all bad! Gas tax increases could be built-in to increase during lower gas price periods and taper off in high and calibrate dependence on vehicles while increasing alternative modes of transportation......We need to reduce our dependence on the auto and certainly incentivize economical use of personal vehicles. This might also be the time to look at alternatives to asphalt (petroleum-based) on secondary roads etc and explore how we will adapt to increasingly expensive and hard to obtain materials we have come to rely on.

  • Anon (unverified)
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    The building trades, longterm political allies of Teddy K will rejoice at the new public works projects with PWR wages will engage primarily union building trades workers and help out the major construction outfits including their subcontractors. Whether its "jobs" or "transportation infrastructure" , money seems to be spent on the same things and spread out the same. The key is whether the package is different in anyway than the same old same old. Frankly, increased gas prices was a boon and incentive to developing better mass transit and it reduced the load on highways, push for more and more lanes etc. and reduced traffic congestion. People combined trips, trying to be more efficient in car use. Not all bad! Gas tax increases could be built-in to increase during lower gas price periods and taper off in high and calibrate dependence on vehicles while increasing alternative modes of transportation......We need to reduce our dependence on the auto and certainly incentivize economical use of personal vehicles. This might also be the time to look at alternatives to asphalt (petroleum-based) on secondary roads etc and explore how we will adapt to increasingly expensive and hard to obtain materials we have come to rely on.

  • Jim Lowen (unverified)
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    I am all in favor of an increase in the gas tax but I'd prerer a new owner fee based on purchase price rather then a set fee. Seems unfar that someone buying a $1000 one pay te same as someone buying a 550,000 one.

    <h2>As for re-registration fees the jump is accesive</h2>
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