A proposal to shorten the tax collection window for major construction project plans across Pima County from 20 years to 10 years has drawn concern from some of the area’s big movers and shakers in the business community.
The proposal was made by Michael Ortega, interim executive director of the Regional Transportation Authority and Pima Association of Government, during a recent meeting. Ortega said the boards should consider asking voters to approve a 10-year extension of the half-cent sales tax that’s used to pay for major transportation projects here.
The plan put forward to voters would still have 20 years worth of projects, but the window to raise money to cover the cost would be split into two 10-year periods, Ortega said.
Why? Ortega said asking voters to fund the first half of the 20-year plan would allow the RTA to continue funding regional transit, while finishing projects in the original plan that either had its funding dry up or have been pushed back. The 10-year tax extension would also allow for some flexibility moving forward, in-terms of asking voters to approve amendments to the plan, rescoping individual projects or adjusting for the sales tax rate in 2036.
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In metro Tucson, the RTA has said two projects lack funding to be finished; the Grant Road widening project as well as the First Avenue corridor project, which spans from East Grant to East River roads. This was in addition to four other projects from the original plan — called RTA 1 — having been deferred to the new plan called RTA Next.
If the 10-year extension is approved, the sales tax revenue, and the bulk of that decade, would prioritize completing projects from the original plan and funding regional transit, while the RTA would deploy “regional monies,†like Highway User Revenue Fund dollars, to begin work on new projects included in the RTA Next plan, Ortega said.
A majority of the RTA Board agreed to pursue the option. Their decision is set to be finalized at a meeting Friday.
But the RTA board will have to move fast. It would require the board to approve the recommended ballot language during Friday’s meeting so the Pima County Board of Supervisors can call a March 2026 election when it meets Aug. 25, Ortega said.
A March election date is important for not having a lapse in funding, Ortega said.
If a vote were to occur any later in the year, the RTA wouldn’t be able to sustain funding for regional transit. And if the ballot initiative were to be pushed back to a date in 2027, the region would forgo at least $120 million in funding, he said.
Plan draws opposition
Asking that voters only extend the sales tax by 10 years has drawn opposition from NextNow, a coalition of local businesses and organizations that say the RTA should go after the long-thought 20-year plan “to ensure there is a reliable and sustained funding mechanism†for the entirety of the two-decade plan.â€
There’s no need to “inject uncertainty†into the latter half of that 20-year timeline for massive, long-term construction projects within a multi-billion dollar plan, said Ian McDowell, vice president and regional director for Sundt Construction’s Tucson location.
“Where our group firmly lands is, you have a 20-year plan, let’s do 20-year funding. That’s kind of the core of our thought process. We are supportive of the RTA and supportive of a 20-year funding timeline. If it winds up being 10 years, that doesn’t mean the support is going away, we just think a 20-year plan and 20-year funding makes sense,†McDowell said. “One of the advantages of having a longer (tax window) is that you get to really take advantage of the alternate funding sources than just southern Arizona.
“I’d love to see us maximize the dollars that we can get allocated from the state, I’d love to see us get maximum dollars allocated from the federal government, but if you put an arbitrary stop in the middle of the plan, you might interject some instability into those funds,†McDowell said. “If we don’t take advantage of the state funds that are going to be available, I’m fairly certain that someone in Maricopa County is going to take them . . . we ought to get our share on this. And the way to do it is to have the have a plan and then have it funded.â€
If the goal of RTA Next is to build the economy and provide residents “long-term certainty†about Pima County’s roads, “then fully funding the RTA Next plan for its full 20 years is the only option,†Lisa Hagins, executive director of the Arizona Transportation Builders Association, said in a statement.
Transit riders would also “suffer from only 10 years of funding,†Hagins said.
“Our cities would be forced to cut bus routes when federal funds lapse, exposing hard-working Pima residents who rely on transit to unnecessary barriers on their commutes. These are not outcomes worth risking,†Hagins said in a statement.
NextNow, while wanting the board to go for a 20-year tax extension, is supportive of the RTA’s leadership and work in recent months because “we feared there might have been no RTA Next plan at all,†said Alejandro Angel, vice chair of the Southern Arizona Leadership Council.
A recently tumultuous period
The delivery of the original plan, which was funded by a half-cent sales tax that was passed by voters in 2006, has been less than ideal.
By August 2023, there was an estimated $500 million shortfall to complete projects promised to voters, the Star has reported.
The downturn in sales tax revenue began shortly after the plan was approved by voters, due to the economic crash of the late 2000s. And revenues hit another rough patch because of the COVID-19 pandemic.
Ortega, Tucson’s former city manager, is expected to get the new plan, dubbed RTA Next, across the finish line. But because of delays or a lack of funding for numerous projects, a concern some RTA Board members have shared is that many voters lack confidence in its ability to deliver another 20 years’ worth of projects.
Further, Ortega’s landed the interim post after the board fired its longtime executive director, Farhad Moghimi, in June. Moghimi drew the ire of some local official officials over their long-held belief that Moghimi favored projects for smaller, suburban jurisdictions over the city, which is where the bulk of RTA funding comes from.
Voter confidence appears to be part of the inspiration for Ortega’s new plan, which attempts to address shortfalls of the old plan, RTA 1, while maintaining progress towards and within a new one.