States all over the map on methods to fund road work

By Keith Goble, Land Line state legislative editor | Thursday, December 12, 2013

In the weeks leading up to the start of the new legislative year, officials across the country are hashing out various methods to help address transportation funding needs.

Iowa officials are working on possible solutions to address an annual transportation funding shortfall estimated at $215 million a year. Democrats at the statehouse want to charge more tax at the fuel pump to cut into the shortfall. However, Gov. Terry Branstad has expressed concern about increasing the state’s fuel tax. Instead, the Republican governor said he is interested in using a portion of state sales tax money to pay for roads.

Branstad also asked the state Department of Transportation to look at alternatives.

One option IDOT would like state lawmakers to consider during the upcoming regular session is a proposal to end collection of the state’s portion of the fuel tax. In exchange, a 6 percent wholesale tax, or “at the rack tax,” would be implemented.

The sales tax is estimated to raise $467 million annually – more than double what a proposed 10-cent-per-gallon fuel tax increase would raise.

IDOT recently held a series of meetings around the state trying to build support for new transportation funding.

“We’re hoping to build consensus as we move toward the 2014 legislative session, around a good transportation funding discussion and potentially legislation that addresses our structure and fixes our long-term issues,” Transportation Director Paul Trombino said in a news release.

Idaho Gov. Butch Otter said he won’t pursue any plans to raise road money without a show of support from voters. The state has an estimated $260 million annual shortfall.

Among the options considered by state lawmakers during the past year were increasing the state’s sales tax, registration fees and fuel tax.

As Indiana’s “Major Moves” initiative comes to an end, state officials say that something must be done because money remaining from then-Gov. Mitch Daniels’ $3.85 billion lease of the Indiana Toll Road is mostly spent or due to be spent for specific projects.

Gov. Mike Pence this month unveiled his 2014 legislative agenda. He plans to work with lawmakers to raise $400 million for road improvements.

In New Hampshire, one state senator wants to link future increases in the state’s fuel tax to inflation. Senate Transportation Chairman Jim Rausch, R-Derry, said he plans to introduce a bill next month that would increase the state’s fuel tax rate by 4 cents and authorize automatic increases for the 18-cent-per-gallon tax.

Earlier this year the state’s Democratic-led House voted to increase the diesel and gas tax rate by 12 cents per gallon over multiple years. However, Senate Republicans blocked a vote on the increase.

A South Carolina lawmaker wants to raise new money for local governments to improve roads and bridges. Rep. Raye Felder, R-Fort Mill, prefiled a bill that would let voters decide if their county should raise the local fuel tax by as much as two cents per gallon to pay for repairs.

Minnesota officials are in the process of updating the state’s 20-year investment plan for highways. MnDOT projects the system of interstates and major arterial roads is $12 billion short of money needed for upkeep during the next two decades.

Transportation Commissioner Charlie Zelle says the state needs to make a major investment to keep up with others who are investing in roads, bridges and transit. Possible revenue sources that could come up for consideration in the months ahead include regular increases for vehicle sales taxes and registration fees.

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