Friday, September 7, 2007

Transportation & Money

The Transportation Technical Committee has a long list of potential sources for new money for transportation projects. What does not seem to be on the committee's topic list is sunk cost. Our accounting book defines sunk cost as "as cost which has already been incurred and which, therefore, is irrelevant to the decision making process." Sunk cost is waved aside when someone says: We've already spent $xxx, so we have to finish the project. Well, no. If the initial spending has been wasted, then no reason exists for spending more.
The Governor's commuter railroad would seem an appropriate target for consideration in light of sunk cost. But in our brief time at the comittee's September 6 meeting, the only topics were sources of more money. Sources mentioned include:
- Allocating some part of severance tax bonding capacity, perhaps 25%, to transportation. (Lawrence Rael of the Albuquerque-based Mid-Region Councail of Governments liked this. So did Sen. Diane Snyder of Albuquerque who said she is "willing to run {a bill} so we talk about it.)
- Creating local options for raising gross receipts taxes. (Rael said gross receipts tax increases "generate the most bang for the buck. At the local level, that's the only mechanism" to raise big money. David Abbey of the Legislative Finance Committee cautioned about raising gross receipts taxes, citing pyramiding and the broad base of the gross receipts tax.)
- Hitting new money from gaming compacts.
- Raising vehicle registration fees and indexing to inflation.
- Impact on road users.
- Railroads, a container tax, perhaps, said Johnny Cope of Hobbs.
Overall, said Rep Dan Silva, "the solution is new revenue."

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