So the argument against dedicated infrastructure taxes like this, is that it takes tax money away from other things that also need it.

Generally speaking, increased development will also require not just roads and transit, but investments in water, electric, sewer, schools, police, fire, etc. If you dedicate funding for one thing it takes away from something else, and you really don’t want to turn a general funds tax bill into dozens of line-items that get nitpicked and fought over constantly.