Ambassador Event: Transportation Infrastructure

Greater Phoenix considers Prop 400 extension to advance regional transportation

The Greater Phoenix transportation system was built on the back of a half-cent sales tax established in 1985 and extended in 2004. Over the last 38 years, business and residential expansion has been concentrated on the freeways, light rail and safe streets of the region.

With the Prop 400 half-cent sales tax set to expire in 2025, local groups and elected officials are working to extend the proposition by adding it to the Maricopa County November 2022 ballot. This funding is vital for the county to support current and projected population growth demands.

A group of local leaders joined a Greater Phoenix Economic Council Ambassador Event to discuss Prop 400 and the history of transportation growth in the region. The panel consisted of:

• Chuck Coughlin, CEO & President, HighGround
• Audra Koester Thomas, Transportation Planning Program Manager, Maricopa Association of Governments
• Scott Smith, CEO, Valley Metro
• Moderator: Tim Bourcet, Vice President of Government & Community Affairs, Greater Phoenix Economic Council

“We want to ensure a good quality of life continues and improves,” Thomas said. “As we see a lot of folks becoming our neighbors, coming from different parts of the country, we need to make sure that we’re ready for that development and by doing and investing in transportation and having a long-term revenue source such as this half-cent sales tax, it’s instrumental in doing so.”

History of Greater Phoenix transportation

Prior to the 1985 passage of the original half-cent sales tax, Prop 300, the regional freeway system was almost nonexistent. Parts of the Interstate 10 and Interstate 17 had been built, but the loop system and other multi-modal transportation capabilities were a pipe dream.

“Back in 1985, Prop 300 was an act of desperation,” Smith said. “Local visionary leaders grabbed the bull by the horn and created this.” 

The half-cent sales tax was established to create the foundation for the modern Greater Phoenix transportation system in place today. Prop 300 established Loop 101 and 202, State Route 51, and contributed to the I-10 and US-60 expansions.

In 2004, when the tax was set to expire, it went back onto the ballot. Maricopa County voters passed the extension, allowing creation of the light rail, Loop 303 freeway, enhancements to the existing system and continued renovations to surface roads.

Maintained roads and effective public transportation directly impact residents and visitors daily. The freeway system reduces the average travel time by about 105 hours each year, while the light rail carried more than 45,000 commuters per day before the pandemic and serves as a critical juncture for student populations of Arizona State University, Creighton and other colleges that operate in the region. Prominent business corridors including the Price Corridor in Chandler, Loop 303 Corridor in the West Valley and the Elliot Tech Corridor in Mesa developed alongside freeways.

Massive economic growth in the region can be directly correlated to the intermodal transit system. Of GPEC’s 890 locates from FY90 through FY21, 791 businesses — just under 90% — are located within two miles of a freeway, accounting for almost 140,000 jobs. Companies that located to the region from FY17 through FY21 and are within two miles of a freeway created $875.3 million in direct revenue, just under $1.4 billion in total revenue and had a total economic impact throughout Greater Phoenix of $40.3 billion.

Within a half-mile of light rail stations, there has been $16 billion in investment over the last 13 years, mostly on new commercial builds.

Property value appreciated 212% when within a quarter mile of a freeway network and 316% if within a quarter mile of a light rail line.

What would the Prop 400 extension do?

The bulk of funding for roads and public transportation comes from the half-cent sales tax, the Arizona Department of Transportation and federal funds. ADOT estimates that its own revenue sources would leave a highway funding gap of more than $30 billion over the next 25 years in a region tested by a major influx of migration and natural population growth. The continuation of Prop 400 allows for further investment in the freeway system and HOV network, reconstruction of the I-17, 11.9 new miles of light rail, 36.8 miles of new bus rapid transit and 4.4 miles of additional streetcar, 335 new lane miles of major streets, and arterial advancements throughout Greater Phoenix. It would also allow Greater Phoenix to take advantage of federal funding.

“No other region, in my opinion, is better set up to chase and successfully chase and bring new dollars from Washington D.C. into this region and state than we are now with a brand-new plan and a commitment to local funding that can match and then ultimately successfully bring billions of dollars into this region,” Thomas said.

For the extension to be passed, it needs to be added to the ballot and approved by residents. The Senate passed a bill to add the Prop 400 extension to the ballot and sent it to the House, which is considering its own concurrent bill on the subject. There is optimism it can receive two-thirds majority in both chambers, which would allow the bill to go into effect sooner than the usual 90-day wait period, Coughlin said. If the enabling legislation is approved by the legislature, it will be added to the Maricopa County general election ballot in November 2022.

A survey conducted by HighGround found that the majority of likely voters would support Prop 400. Of voters, 42% of which are Republican and 34% Democrat, 70% indicated approval of the bill and 40% strongly favored it. Just under 8% were undecided. When asked to rank the importance of projects, participants on average gave the highest scores to street maintenance and repair, paratransit for people with disabilities, safety improvements and dial-a-ride.

“Everybody has an opinion about transportation because they experience it every day,” Coughlin said. “Reliable transportation keeps our economy moving, particularly with the supply chain issues that are now prevalent in everybody’s mind.”

Though the current half-cent sales tax does not expire until 2025, securing a commitment now would allow MAG and Valley Metro to start future expansions and bond against the tax extension as a revenue source, preventing projects from being delayed.

“If Prop 400 is not extended, it will have a devastating impact on public transportation,” Smith said.