Washington State Speaker of the House Frank Chopp, D-Seattle, fought during this legislative session to remove the cost of sales tax from the construction of the 520 bridge. This issue has been debated by lawmakers for years, and Chopp was finally successful in obtaining exemption — as long as tolls are used to fund the bridge construction. The dollars saved are to be used to reduce the tolls. It looks like the issue is bi-partisan as well:
Rep. Doug Ericksen, R-Ferndale, said that while some Democrats contend it’s just shifting tax money “from one pot to another,” in the case of transportation, that shift is problematic because most big roads projects are primarily funded by the state’s gas tax of 36 cents per gallon.
“The gas tax is protected by the 18th Amendment (of the state constitution), which says you can only use the gas tax for highways,” he said.
By taxing highway projects, the gas tax money is diverted into the general fund, he said. Read the rest of this story here.
In the case of the North South Corridor, it is estimated that sales tax on construction will increase the cost by $250 million over the life of the project. As we pointed out earlier this month, the legislature wanted to consider rebating the sales tax on our project as well, as long as we raised $100 million in local taxes to help offset the costs. That bill died in committee, but stands a good chance of coming back in 2009.
Do you think that slaes tax should be eliminated on publically funded construction projects? Should there me a local match requirement such as tolls or increased car tab fees to be eligible?