By Keith Goble
State Legislative Editor
Numerous states confronted with a need for road and bridge work are short on money to pay for the projects. The reasons for the funding crises are all over the board. They include escalating prices for oil, which have driven up costs of asphalt and other paving materials.
Lagging revenue from fuel taxes also gets part of the blame, as does uncertainty about future federal funding. As a result, state officials who are trying to plan their next moves are being forced to either cut back on transportation work or pursue alternative means to generate revenue.
The stakes are high and like chess masters engaged in a world-class match, state lawmakers are working within tight time constraints as they maneuver to pay for projects demanded by the driving public. Here is a sampling of the moves some state officials are considering to avoid checkmate when it comes to their road budgets.
Two leading state lawmakers in Idaho are not in favor of directing the state’s bigger-than-expected $247 million budget surplus to transportation.
Sen. Dean Cameron, R-Rupert, and Rep. Maxine Bell, R-Jerome, who lead the Joint Finance-Appropriations Committee, would rather put the money toward “one-time” projects.
Gov. C.L. “Butch” Otter shared the same sentiment earlier this summer. The GOP governor and others have expressed skepticism over a suggestion by State Controller Donna Jones, also a Republican, to put the money into roads and bridges.
Officials with the Idaho Transportation Department say the extra cash would come in handy because the agency needs $200 million to keep up with needed road and bridge work. The agency operates on a $500 million annual budget.
Otter said he would prefer to increase fuel taxes and some transportation-related fees to make up for the expected shortfall, The Associated Press reported.
Cameron and Bell said they would rather see a new method of raising funds for road work be found. The most likely scenario is higher taxes for transportation.
How the state will come up with more money for road and bridge work could be a major point of emphasis during the 2008 regular session.
With the state of Maine facing a shortfall in highway funding, the possibility of adding toll roads and bridges is among the options drawing consideration.
The chairman of the Legislature’s Transportation Committee, Sen. Dennis Damon, D-Trenton, said something needs to be done to deal with a funding gap estimated at $162 million annually during the next 20 years.
Damon told lawmakers there isn’t enough income flowing to the state to complete needed transportation work. To make matters worse, he said the state also needs to invest in railroads and other means of transportation, the Portland Press Herald reported.
Meeting with the Appropriations Committee, Damon and others on the transportation panel talked about how to generate more revenue. Among the options discussed were tolling roads and bridges, turning the state’s fuel tax into a sales tax, increasing driver fees and borrowing money for repairs.
Changing the fuel tax to a sales tax would allow revenues for the state to increase along with the price at the pump.
Legislators held off on making any decisions. A subcommittee will be responsible for coming up with a list of recommendations to put before the House and Senate when the 2008 session begins.
A special transportation panel in Massachusetts is calling for more taxes and tolls to be collected from car and truck drivers to help pay for road, bridge and rail work. The boost in revenue would help the state generate $18 billion for transportation projects during the next 20 years.
The Transportation Finance Commission released a report that recommended increasing the state’s 21-cent-per-gallon fuel tax rate by 11.5 cents to 32.5 cents. They also called for charging highway users
5 cents per mile.
The possibility of boosting the fuel tax rate has little support from Gov. Deval Patrick. In addition, adding tolls also would face an uphill battle with the governor. He is conducting his own review, the Boston Herald reported.
Other proposals include boosting toll rates on the Massachusetts Turnpike and studying whether to lease some roads and bridges.
Recommendations would need to win approval from legislators before they could move to the governor’s desk. For more information, see Page 50.
New Hampshire Gov. John Lynch wants the state to spend its transportation revenues more wisely to eliminate the need to increase the fuel tax rate.
The state’s highway fund is drawn from the per-gallon tax on diesel and gas, as well as motor vehicle fees. Lynch has long opposed boosting the 18-cent-per-gallon tax rate.
The governor said with a drop in federal highway funds of 30 percent during the next couple years, the state must reconsider what agencies use the highway fund. Decisions also need to be made whether the 65 percent of the funds traditionally remaining for the state Department of Transportation is enough to accomplish projects, Lynch told Foster’s Daily Democrat.
About $80 million annually is rerouted from the highway fund to other departments. The bulk of that money goes to cover costs of highway patrols by state police.
Lynch said some departments view the highway fund as an “ATM machine” when they are short on money.
“We have to stop that,” Lynch said.
In the face of a massive shortfall, officials in North Carolina are trying to determine how to pay for road and bridge work.
To make matters worse, about $170 million is scheduled to be routed from transportation this year to general services.
“The public perception is that we collect taxes to be used for roads. And yet we use those taxes for something else,” Sen. Phil Berger, R-Rockingham, told the Charlotte Observer.
Berger is among the legislators who have argued against increasing taxes for roads as long as funds are diverted for other uses.
A North Carolina DOT report said the state needs $122 billion during the next 25 years to keep up with demands. During that time, it was estimated $57 billion is available – leaving a $65 billion gap.
Among the possible solutions offered to help eat into the funding gap is adding tolls on some new roads. Another suggestion is to boost the 3-percent tax on the sale price of vehicles.
Gov. Mike Easley said he will appoint a study group to look into how the state pays for transportation projects. The group could report back to the governor in time for the 2008 regular session.
An Oklahoma state lawmaker is filing legislation for consideration next year that would ensure road funding is increased by at least $50 million annually.
Rep. Guy Liebmann, chairman of the House General Government and Transportation Committee, said the proposal would remove a trigger in Oklahoma law that requires state revenue to grow at least 3 percent before the state Transportation Department receives an annual increase of up to $50 million.
A 2006 law provided for up to $50 million a year for roads and bridges in the state until $200 million in new funding was put together. The 3-percent stipulation led to only $17.5 million being allotted for transportation in the 2008 fiscal year.
Officials with ODOT said another failure to reach the growth figure would have a snowball effect on the agency’s backlog.
The proposed legislation would require ODOT to get at least $50 million in new funding each year until the $200 million threshold is achieved. The state’s tax collection would have no bearing on the amount.
“Maintenance of roads and bridges is a core function of government and there’s no reason to place an artificial limit on how much we can spend in that area,” Liebmann, R-Oklahoma City, said in a written statement.
A Texasstate lawmaker wants an amendment made to the state constitution to prohibit lawmakers from diverting fuel tax revenue to pay for expenses other than construction and maintenance of transportation projects. Senate Transportation Chairman John Carona, R-Dallas, said the practice has become routine in the past few years.
“That’s going to be probably the most important single issue in this next session,” Carona told The Dallas Morning News.
The next regular session convenes in 2009.
The state’s fuel tax revenue a year ago accounted for nearly $3 billion for transportation-related expenses. The funds already are restricted to transportation but changes made at the statehouse have steadily expanded the definition of what can be considered “related to transportation.”
The most recent budget for the state included nearly $1 billion in fuel tax revenue that went to other uses than transportation projects, Carona said. Instead, he said the money could have been leveraged with bond debt to pay for nearly $10 billion in road work and repairs. LL