HOW TO PASS A LOCAL OPTION TAX FOR FINANCING TRANSPORTATION PROJECTS

Local jurisdictions are increasingly using local option taxes, usually sales taxes or gas taxes, to finance transportation projects. Local option taxes are usually authorized by state legislation and often require a referendum for adoption. This research entailed case studies of local jurisdictions in 11 states with such local option taxes. This paper presents findings that identify and characterize the principal factors that contribute to the success of a local option tax referendum. These factors include: an identified critical need for transportation improvements and design of a tax suitable to meet those needs; a thorough planning process that involves and informs the electorate and produces a realistic expenditure plan; detailed earmarking of funds in the expenditure plan; effective public/private leadership, provision of information, and promotion of the expenditure plan and the tax to finance it; distribution of tax burdens, revenues and benefits that are perceived as fair; neutralization or co-option of special interests; neutralization of anti-tax sentiment; thoughtful drafting of the ballot language and a suitable strategy for implementing the referendum; and fulfilling promises to build support for future referenda. While there are many individual factors that contribute to success of a referendum, effective planning encompasses most of them. Creativity in addresing local issues and circumstances is also associated with many of the most successful referenda.

• Corporate Authors:

  Microeconomics, Incorporated

  4354 Warren Street, NW
  Washington, DC  United States  20016

  EBA, Incorporated

  4401-A Connecticut Avenue, NW, Suite 363
  Washington, DC  United States  20008-2322

  Federal Highway Administration

  1200 New Jersey Avenue, SE
  Washington, DC  United States  20590
• Authors:
  • Beale, HBR
  • Bishop, E R
  • Marley, W G
• Publication Date: 1996-1-8

Language

• English

Media Info

• Pagination: 23 p.

Subject/Index Terms

• TRT Terms: Expenditures; Financing; Gasoline; Improvements; Local taxation; Planning stages; Public information programs; Sales tax; State laws; Taxes
• Uncontrolled Terms: Referendum; Transportation projects
• Subject Areas: Finance; Highways; Planning and Forecasting; I10: Economics and Administration; I72: Traffic and Transport Planning;

Filing Info

• Accession Number: 00759831
• Record Type: Publication
• Files: TRIS, USDOT
• Created Date: Feb 12 1999 12:00AM