DALLAS – A $1 billion road bond bill introduced late in the Utah Legislature's 2017 session is expected to win approval before the session ends on Thursday.
Senate Bill 277, introduced Friday by Sen. Wayne Harper, a Republican from Salt Lake City, was adopted unanimously by the state Senate Transportation Committee on Monday morning and by the full Senate later in the day without a single dissenting vote.
The measure was to be considered by the Utah House on Tuesday, where it is unlikely to find much if any opposition.
The general obligation road debt would be the state's second-largest bond package, eclipsed only by a $1.3 billion road bond bill approved by the Legislature in 2006.
The $1 billion of bond proceeds will allow the Utah Department of Transportation to move ahead with projects not currently funded, saving millions of dollars that otherwise would have been lost to inflation while taking advantage of low interest rates, Harper said.
"Once we do this, we know it's going to have a cascading benefit on economic development," Harper said. "It will allow for more jobs, more businesses."
The new 15-year bonds would be issued as the 2006 bonds mature to avoid a tax increase, he said.
The plan to sell the new bonds as existing debt matures would also keep Utah within its constitutional GO debt limit of 1.5% of the value of the total taxable property in the state, Harper said.
Harper's bill requires that the state not exceed 50% of the constitutional debt limit with the new GO road bonds.
The state will stay below 40% of the limit by waiting to issue the new bonds until existing debt is paid off, said Sen. Stuart Adams, a Republican from Layton.
Road debt is exempt from the state's statutory cap on outstanding GO debt to 45% of allowable annual appropriations under its spending limitations.
Utah's GO debt is rated triple-A across the board.
The bond measure does not include a list of projects but instead gives the Utah DOT the authority to determine which ones can go ahead from a list of approved work.
Utah DOT would focus the bond proceeds on the most-needed projects or those that offer the greatest savings, said Utah DOT executive director Carlos Braceras.
A project to widen Interstate 15 near Provo could begin in spring 2018, two years ahead of schedule, he said.
"It carries the most traffic," Braceras said. "It is where we see the most congestion."
A draft list of potential bond-financed projects could be available as early as April for public comment, Braceras said.
"This is accelerating transportation spending," Braceras said. "Bonding is financing. It's not revenue."
The path to transportation funding in Tennessee has not been as smooth as in Utah, as the state House Transportation Committee last week amended Gov. Bill Haslam's road bill to remove a provision that would have raised the state's fuel taxes.
The amended bill would devote 0.25% of the revenue from Tennessee's 7% sales tax to road projects. The original version would have raised the state gasoline tax by 7 cents per gallon and the diesel tax by 12 cents per gallon.
The higher fuel taxes and fees would have generated $227.8 million a year for state roads and $117.1 million per year that would be shared with cities and counties, Haslam said.
A special state Senate subcommittee will consider the amended bill this week, said Sen. Paul Bailey, a Republican from Sparta who chairs the Senate Transportation and Safety Committee.
"We felt like it would be in the best interest of the Senate Transportation Committee to go ahead and start looking at the bill, studying the amendments, and making sure that we have a full understanding of what the legislation is doing at this time," Bailey said.
