Hit A Pothole? It's Gonna Cost You - One Way Or Another

Mar 29 2014, 8:40pm CDT | by

Hit A Pothole? It's Gonna Cost You - One Way Or Another
Photo Credit: Forbes Business

According to the U.S. Department of Transportation, Federal Highway Administration, a pothole is “a bowl-shaped depression in the pavement surface.”

Those aren’t exactly the words that drivers where I live are using to describe them. Those words, I can’t post.

After one of the snowiest, coldest winters on record in parts of the country, it’s a relief to see the snow melt. But all of that melting and changes in temperature have left us with another headache: potholes. Lots of them.

Angel Taveras, the mayor of Providence, has lamented, “[t]he potholes that have resulted from this year’s severe winter weather are the worst that I can recall in many years.” He’s not alone.

Americans have been complaining about potholes from coast to coast. As the complaints pile up, the fix isn’t always as fast as anticipated. In some places, residents are so unhappy about the state of the roads that they’re fixing the potholes themselves. One resident took it to heart in Ann Arbor, Michigan, prompting the city to release a statement asking others not to follow suit:

Ann Arbor residents love their city so much that when they see a problem, they want to get out and do something about it. It is admirable that someone took the time and effort to fill a pothole, but we strongly recommend against doing it.

If volunteers aren’t filling potholes, then roads crews are… and that costs money. As road crews patch, fill and sometimes even fall into a record number of potholes, government leaders are scrambling for ways to pay them.

In Colorado Springs, Mayor Steve Bach is asking for $2 million in emergency money to fill potholes.

In Minnesota, lawmakers are seeking an additional $15 million ($10 million for state highways and $5 million for city and county roads) to resolve damage from potholes.

And after declaring last week, “Pothole Week,” Stamford Mayor David Martin announced that he would seek an additional $2 million to pave roads.

Additional funds are also being sought in New York State, Philadelphia and Los Angeles.

But money doesn’t grow on trees. Or in sinkholes. Where are politicians going to find those extra funds? Across the country, the answer appears to be tax increases.

Of course, there is no “one size fits all (potholes)” answer. One Minnesota proposal calls for new sales taxes on wholesale fuels while in Olean, New York, property taxes may be on the rise. Los Angeles is considering a “half-cent sales tax hike… to pay for repairs of the worst streets and sidewalks.” Grand Rapids, Michigan, Mayor George Heartwell is hoping that voters will support a city income tax for streets on the ballot this spring. And in Montgomery County, Maryland, a “pothole tax” has even become an election issue.

Some, however, wonder if the burden should fall to local governments to patch up our roads – or if maybe it should be the federal government’s problem to fix. Three funding proposals have garnered interest among taxpayers although how they would raise revenue are very different:

  • In December of 2013, Rep. Earl Blumenauer (D-OR) announced a proposal, H.R. 3636, also called The Update, Promote, and Develop America’s Transportation Essentials (UPDATE) Act, that would phase in a 15 cent/gallon tax increase over the next three years on gasoline and diesel. With the proposal, the federal tax would increase to 33.4 cents per gallon on gas and to 42.8 cents per gallon on diesel. That bill currently sits in the House Committee on Ways and Means.
  • Getting a bit more chatter is the tax reform package put forth by Rep. Dave Camp (R-MI). Under Camp’s proposal, $126.5 billion would be set aside to fund federal transportation projects, an amount which would “fully fund highway and infrastructure investment through the [Highway Trust Fund] for eight years.”
  • Camp’s proposal is a much slimmer version of President Obama’s budget proposal. President Obama’s plan would, through a combination of corporate tax reform and a tax on offshore corporate profits, raise $150 billion in revenue to be used on roads and infrastructure improvements (you may recall that infrastructure improvements were also a key message in President Obama’s State of the Union address earlier this year).

It’s clear that, no matter which road we go down, the nation’s potholes are going to need a fix. The real question is where the money will come from to fill those holes.

Want more taxgirl goodness? Pick your poison: receive posts by email, follow me on twitter (@taxgirl), hang out with me on Facebook or check out my YouTube channel. If you want to keep an eye on documents I’ve posted, check out my profile on Scribd. And finally, you can subscribe to my podcast on the site or via iTunes (it’s free).

Source: Forbes Business


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