Flagged Bill: HB 55 – Income Tax Credit for Purchase of Transit Pass, Rep. Poulson

Representative Marie Poulsion (Democrat - Salt Lake City)

Representative Marie Poulsion (Democrat – Salt Lake City)

State lawmakers have generally not been eager to support the Utah Transit Authority (UTA) in expanding service or incentivising its use. To make matters worse, UTA has some of the highest fares in the nation, further pushing individuals away from the service.

Though high fares and service issues are discussions for another day, one thing is clear… or, rather, isn’t clear – the air. Despite being an obvious solution to help reduce air pollution, few have explored the idea of truly pushing people towards a system that can cut per-person automobile emissions, one of the leading factors in the creation of the Wasatch Front’s semi-annual inversion.

Representative Marie Poulson (Democrat – Salt Lake City) is working to change this mindset through state incentives with HB 55 – Income Tax Credit for Purchase of a Transit Pass.

As one might expect, Poulson is proposing that the UTA transit passes (as well as other transit systems throughout the state) be subsidized by the state. Her proposal states that a person must purchase at least a one month pass, spend a total of $125 or more on passes, and that these passes be valid during the months of January, February, and/or July (the months when Utah’s air is traditionally the worst). With an average monthly pass costing $83.75, this subsidy would kick in after two months.

The total amount of the subsidy would be either 25% of the total amount spent or $50, whichever is lower. This means that a person who spends $167.50 on two monthly passes would receive a tax credit of roughly $42 and payments would come out of the general fund.

It is clear that Poulson feels that the state needs to put its money where its mouth is. This bill could have a hefty price-tag associated with it – currently, no financial analysis has been attached to HB 55, but Poulson’s bill mimics a similar proposal from Salt Lake City that was rolled out last October. Salt Lake’s policy saves its residents $30 a month, slightly more than Poulson’s $21, and costs the city roughly $150,000. If we assume that people along the Wasatch Front take advantage of this tax credit at roughly the same rate as Salt Lake, this policy would most likely cost the state $244,000 annually* and take more than 4,900 cars off the road every month during the months that the inversion is at its worst.

Though this would not be a magic bullet for air quality, it would improve the situation. There is also the possibility that this policy will make mass transit more enticing to people who would otherwise not use the system and continue using transit during off months as they see that the transit system works for them. This policy is also a very cost effective route. Most people are probably willing to be taxed eight cents more a year for cleaner air and is a voluntary way to remove cars from the road. The state, as a practical measure, should make these types of investments for the health of our population and to avoid scaring away tourists and their dollars.

To contact Representative Poulson, click here or call 801-942-5390.

Impact on Average Utahn:

High Impact   5 . 4 . 3 . 2 . 1 . 0   No Impact

Need for Legislation:

Necessary   5 . 4 . 3 . 2 . 1 . 0   Unnecessary

Lemon Score:

Sound Legislation 5 . 4 . 3 . 2 . 1 . 0 Clunker

You can track this, and all of our other flagged bills, by clicking here. Need an explanation of scores? Click Here.

*At $150,000 annually, and at an annual expense of $360 per pass annually, Salt Lake City expects 417 residents, or 0.2% of its 189,314 residents to use the program. 0.2% of the Wasatch Front’s population of 2,217,304 residents is  4,884. At $50 a per person per year, this would cost the state $244,200. At 2,855,000 Utahns, the cost is 8.5 cents per resident.

1 comment for “Flagged Bill: HB 55 – Income Tax Credit for Purchase of Transit Pass, Rep. Poulson

  1. January 23, 2014 at 11:39 am

    Rather than offer a tax credit, why not just lower the price? It’s the same effect, except that users get the benefit at the purchase rather than next year when they file their tax returns. I think that there are few people who aren’t already using the transit system that are going to be willing to switch just for a tax credit, where as a lower cost point for the pass is going to cause serious reconsideration.

    No, I disagree with your analysis: this is going to be about as effective as Cash for Clunkers in getting people to shift their behavior, and it will have the unintended side effect of lowering revenues, too.

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