Tag Archives: State Transportation Board

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The Long Road to Funding

In December, the State Transportation Board took the next step in the process of funding Interstate 11 (I-11) and the Intermountain West Corridor Study. It approved $15M for the Tier 1 Environment Impact Statement, which would allow the Arizona Department of Transportation (ADOT) to conduct an environmental study between Nogales and Wickenburg. This will take three years and follows a two-year feasibility study.

The I-11 corridor, though a final route hasn’t been decided, would likely follow US 93 from the Hoover Dam Bypass Bridge south to Wickenburg, running west of the Phoenix metropolitan area, through the Tucson area to Nogales and the Mexican border. It would connect Phoenix and Las Vegas and, potentially, Canada. The interstate is still in its infancy in Arizona.

“It is important to note that there is no funding set aside for the implementation of Interstate 11,” says Laura Douglas, spokeswoman for ADOT. “The only funding that ADOT has at this point is the $15M for the Tier 1 EIS that is set to begin this year.”

That funding will come from the 2015-2019 Five-Year Transportation Facilities Construction Program. However, ADOT, like most state transportation departments, relies on gas taxes collected on every gallon used by Arizona drivers.

“Transportation funding in general is very challenging, not just for Arizona, but for the rest of the states as well,” says Douglas. “ADOT must prioritize projects due to stagnant revenue from the gas and vehicle license taxes and from decreased federal funding. We have many needs and not enough funding to support those needs. During the last couple of years, our department has moved toward a major focus on preserving the existing state highway system and protecting our investment of more than $19B—this is the estimated value of the state highway system.”

Critics of this model primarily point to the outdated tax rates that haven’t been adjusted in Arizona for about 25 years. For example, Tax Foundation reported that nationwide in 2011, highway user fees and user taxes comprised half of state and local expenses on roads. State and local governments spent $153B on highway, street and road expenses while only raising $77.1B in fees and taxes. To make up some of the difference, the federal government provided $46B in aid — a little more than half of which was able to be sourced from the federal gasoline tax.

According to a 2011 ITEP report, states are losing about $10B annually due to construction cost increases that have occurred since the last gas tax increases. ITEP suggests that collectively, states will need to adjust their gas taxes to make up for that loss in revenue, among other solutions. It has been nearly 25 years since Arizona increased its gasoline tax. It has been more than two decades since the federal gas tax has been raised. ITEP suggests an increase of 12.6 cents per gallon would return the tax to a similar purchasing power the tax had when it was last set. According to the ITEP report, Arizona would need to adjust its tax by 13 cents per gallon, yielding an increase in annual revenue of $336.7M. Arizona is ranked No. 42 in the country by the Tax Foundation for its 19-cent state tax rate as of 2014.

ADOT Director John Halikowski has said in a press release that I-11 research has been the first step in “developing a multimodal freight corridor and manufacturing belt to drive trade, commerce and job growth and economic development while facilitating Arizona’s strong connections to major regional and international markets.” However, when that will be realized is still years away.

“It is difficult to put a timeline on the Interstate 11 project. The process starts with planning, then moves to environmental work, then design, then right-of-way, then construction,” says Douglas. “We are also approaching the implementation of Interstate 11 in two major phases. The Interim Corridor assumes implementation of targeted improvements to create a continuous four-lane divided highway from Nogales to Las Vegas. The goal of implementing this interim corridor is to facilitate trade movements among Mexico, Arizona and Nevada—until such a time as the ultimate trade corridor is needed. The Full-Build Corridor completes build-out of a multimodal transportation corridor that will match the needs of future demands for the movement of people and goods. The full-build concept is the long-term vision for the Interstate 11 Corridor.”

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Mike Hammond named to State Transportation Board

Governor Doug Ducey appointed Michael S. Hammond to the State Transportation Board, representing the Pima County region in the planning and development of Arizona’s transportation network.

The seven members of the State Transportation Board serve six-year terms while representing local communities throughout Arizona to prioritize transportation needs, projects and funding.

“As someone who has lived in Southern Arizona for 39 years and traveled extensively throughout our state and the state of Sonora, Mexico, both for pleasure and business, I have a keen appreciation of our transportation infrastructure and its importance in adding to our quality of life, not to mention driving economic development and job growth,” Hammond said. “It is a privilege and an honor to have a voice in the future infrastructure investments made by the state of Arizona.”

His appointment requires confirmation by the Arizona State Senate. Hammond is expected to attend his first board meeting April 17 in Phoenix.

Hammond has been in commercial real estate since 1978 and is president, founder and managing shareholder of Cushman & Wakefield|PICOR, an independent commercial real estate brokerage and management firm based in Southern Arizona. In 2002, with his background in industrial real estate and interest in regional economic development, he began focusing on the border region and, more specifically, the state of Sonora, Mexico.

Hammond received “Tucson Man of the Year” honors from Greater Tucson Leadership in 2013. He is a member of various local, regional and national organizations, including the Arizona District Export Council, the Business Development Finance Corporation, Southern Arizona Leadership Council and Tucson Regional Economic Opportunities. He is a full member of the Urban Land Institute, and serves on the Urban Land Institute State of Arizona Steering Committee.

Hammond is a graduate of the University of Washington in Seattle.

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National Bank of Arizona Elects New Board

National Bank of Arizona (NB|AZ) announced the appointment of three prominent business leaders as new members to its Board of Directors. The distinguished members elected to join the Board include David N. Beckham, real estate developer and co-founder of Beckham Gumbin Ventures; Tracy Bame, president of Freeport-McMoRan Copper & Gold Foundation; and Steve Christy, Vice Chair of ADOT’s State Transportation Board.

The current Board made a strategic decision to elect three additional members to expand the Board for greater bandwidth, a stronger element of diversity and to broaden community representation.

“The criteria we used for selecting candidates for the Board was in keeping with the high standards of excellence we adhere to as a bank,” said Keith Maio, CEO and president, National Bank of Arizona. “We appointed three leaders with an excellent reputation and the best in their field of work.”

“I’m honored to serve on the NB|AZ Board with individuals of such high integrity,” said incoming member, David N. Beckham. “I’m fortunate to have had long-term relationships with some of the current members of the Board, and I look forward to being a productive addition in supporting the vision of this strong financial institution.”

“National Bank of Arizona is an organization that clearly is committed to being an outstanding business and community partner,” said Tracy Bame. “Adding new directors that bring expanded insight and perspective to the Board is continued demonstration of this. I’m privileged and thrilled to accept the invitation to serve the bank in advancing these goals across the state in every way I can.”

“I am truly looking forward to serving as a director with NB|AZ,” added Steve Christy. “I hope to bring to the bank a voice from southern Arizona, and will offer my connections within this community to further the bank’s Tucson interests in any way possible.”

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Arizona plans road projects with reduced funding

The Arizona Department of Transportation says it will be working with $350 million less as it maps out construction projects for the next five years.

The department says the decreased funding is due to stagnant revenue from gas and vehicle license taxes, and declining federal aid. Director John Halikowski says some tough decisions will have to be made about how to spend limited dollars.

The public can begin submitting comments on three scenarios Friday. One focuses on preserving the state’s highway system, another focuses on major projects, and the third is a combination of those two.

Public hearings are planned in Phoenix, Tucson and Flagstaff.

The State Transportation Board is expected to adopt a final plan to cover 2014 to 2018 at its June meeting in Pinetop-Lakeside.