The Power of the Penny

A Transportation Funding Solution

Neil Dobler, PE

Catastrophic may be too strong a word. Unforeseen is certainly accurate, but lacks the sense of urgency. Crisis is definitely to the point.

We are talking about extraordinary situations where normal avenues of funding transportation projects are simply inadequate to the challenge.

It doesn’t happen often. Public works directors in small-to-medium cities can generally work within existing funding sources and processes. Capital improvement programs include manageable projects that can be planned for and accommodated within public works budgets.  Normally the issue is prioritizing projects, and when a project doesn’t make the cut it is not catastrophic.

But suppose a major bridge fails and must be replaced. The price tag might come to $40 million in a city where a typical annual capital improvement budget for transportation is less than $5 million. The effect on the community can be overwhelming, and challenge the city to meet the crisis responsively, intelligently and creatively.

Not surprisingly in many communities’ political climates today, city councils are often dead-set against increasing property taxes. Raising property taxes is a tough sell in the best of times. Through careful research and out-of-the-box thinking, some cities are finding that a one-cent-or-less sales tax over a reasonable number of years is emerging as the answer to the problem of funding large, sometimes unexpected transportation projects.

Cities following this approach are discovering several key steps to success:

Look outside normal channels when massive amounts of funding are needed.

Get key politicians on board early to drive success.

Package groups of projects and estimate costs quickly to build a broad basis of support.

Sell ideas to win a sales tax election by broadening appeal to all constituents.

Tap into the power of the local Chamber of Commerce to form an economic partnership to fund the political campaign.

Today’s city officials have to think creatively when facing the need for huge amounts of funding. They must keep an open mind, and explore every option carefully. Utilizing sales tax funding for transportation projects might at first seem an unlikely solution, with perhaps many roadblocks to success. But communities are doing it, and achieving notable results.

Working closely with elected officials is perhaps the first order of business. Their support will be invaluable in moving the enterprise forward. County-wide sales tax increases require voter approval, and you will need the backing of constituents’ representatives to help sell the initiative.

Spread the benefits around. Think beyond the one big project which is driving the need. Package groups of projects to benefit the whole community, both in the city and in the surrounding county. People will support work that enhances their lives close to home. They are likely to be less interested in paying for work done across town where they may seldom frequent.

Winning any election is a study in the fine art of persuasion. Ask any politician—successful or not. You have to sell the idea, and that means mounting an effective, sophisticated campaign. The city may be prevented by statute from spending any money on the campaign, so look for an economic partner to drive the sales effort. Often, that partner is the local chamber of commerce.

The chamber can organize funding for the campaign, mobilize business support and work with experienced campaign experts to create the types of advertising, press coverage and events to drive public opinion to a successful outcome. Secure the support of the chamber by dedicating a portion of sales tax revenue to fund economic development in the community. Forming this close economic partnership with the chamber of commerce not only secures a powerful ally, but makes good sense for the community as well.

A quarter-cent, half-cent or even one-cent increase in sales tax might be the answer in times of crisis. Don’t overlook the Power of the Penny.