TranspoAdvocate NewsState & Local Funding News
TIAC staff tracks the latest state and local transportation funding news and provides regular updates on TranspoAdvocates News. To contribute to these efforts, contact Carolyn Kramer.
One of the challenges states face when addressing transportation funding shortfalls is that a flat excise tax on motor fuel does not change, while project costs, inflation, and other factors lead to rising costs in road and bridge construction and maintenance. Several states have tried to address the issue by replacing their flat excise tax with a variable-rate motor fuel tax. A variable-rate motor fuel tax adjusts the cents-per-gallon charge at the pump based on the wholesale price of fuel, general economic inflation, or other circumstances like population change and average vehicle fuel efficiency.
A report released last month by the American Road & Transportation Builders Association’s “Transportation Investment Advocacy Center”™ (ARTBA-TIAC) includes model statutory language to provide a long-term, stable transportation funding source by creating a variable-rate state motor fuel tax. It also includes best practices and lessons learned from states around the country who have implemented a variable-rate motor fuel tax.
“One of the key issues facing state and local officials today is identifying sustainable transportation funding choices,” said Seth Millican, executive director of the Georgia Transportation Alliance and co-chair of the Transportation Investment Advocates Council. “The model language outlined in ARTBA’s report can be a starting point for state legislators and advocates who are interested in developing a reliable, long-term transportation-related revenue stream through a variable rate gas tax.”
Currently, 18 states have a variable-rate motor fuel tax. Two other states charge a state sales tax on the sale of motor fuel.
This is the second model language report ARTBA-TIAC has produced. The previous report, “Model Statutory Language: Helping Ensure Electric & Hybrid Vehicles Are Fully Contributing to the Maintenance of America’s Transportation Network,” provides language to raise state transportation revenues through registration fees on electric and hybrid electric vehicles.
The model statutory language reports are created with the assistance of a volunteer committee formed through the “Transportation Investment Advocates Council,” a network of more than 70 business professionals and public officials who share a common interest in building support for transportation infrastructure investments in their state or local community.
View the report.
Established in 2014, TIAC is a first-of-its kind, dynamic education program and Internet-based information resource designed to help private citizens, legislators, organizations and businesses successfully grow transportation investment at the state and local levels through the legislative and ballot initiative processes.
If you would like to contribute to these efforts, please contact Carolyn Kramer.
California’s Department of Transportation (Caltrans) announced the creation of 1,100 new jobs within the agency as a direct result of the funding approved April 28 in Senate Bill 1. Read More>>
The South Carolina Department of Transportation on Aug. 6 announced a list of 247 paving projects, which would total 260 miles of road across 30 counties. Read More>>
Vehicle-Miles Traveled Programs
Pennsylvania will join Delaware in the I-95 Corridor Coalition’s vehicle-miles traveled (VMT) pilot program beginning in 2018 or 2019. This program is the first East Coast VMT pilot test, and the only multi-state effort to study the viability of a road-usage charge system. The Federal Highway Administration awarded an August 2016 grant for the program, though only two of the four eligible states are moving ahead with the pilot. Read More>>
The Hawaii Department of Transportation is seeking a consulting firm to create a vehicle-miles traveled pilot system for testing. Read More>>
The Mississippi Department of Transportation terminated existing contracts on a bypass project due to lack of funding. The project would have added more capacity to existing roadways, removing commercial traffic from downtown Philadelphia, Mississippi. Officials had hoped the additional capacity would attract new businesses and industries and improve safety conditions. Transportation Commissioner Dick Hall said that the agency needs to use its current funds to maintain the existing highway system.The department would need an additional $400 million annually for improvement and expansion projects. Read More>>
Many Wisconsin road workers are looking for employment on private projects due to the growing number of state transportation project delays and uncertainty over long-term funding prospects, warned the International Union of Operating Engineers Local 139. Read More>>
Louisiana officials are warning that state transportation revenue will be insufficient to receive the full federal funding match for infrastructure and transportation projects by 2019. Read More>>
The Sierra Club filed a lawsuit against Oklahoma on Aug. 8 to challenge legislation establishing a $100 electric motor vehicle registration fee and $30 hybrid motor vehicle registration fee, with revenue credited to the State Highway Construction and Maintenance Fund. Read More>>
Illinois traffic deaths rose by 4 percent in the first half of 2017 compared to the same time period last year, according to a report released by the National Safety Council on Aug. 15. Nationally, traffic fatalities decreased by 1.32 percent in the first half of 2017 when compared to the same time period last year. Read More>>
The latest quarterly National Highway Construction Cost Index (NHCCI) from the Federal Highway Administration includes a major revision, the first since its creation 10 years ago. The new measure reflects that highway construction costs have increased by 67 percent compared to 2003. During the same period, the cost of asphalt spiked 107 percent, concrete increased 61 percent, and metal jumped 45 percent. California’s composite construction index grew the most— 143 percent— followed by Texas at 122 percent. Read More>>
Missouri state Representative Jeff Messenger (R-130) told constituents that interstate tolls and user fees will likely have to increase to catch up with inflation. Most of the state’s transportation-related taxes and fees haven’t been adjusted in 30 years, as Missouri’s road network continued to expand. Read More>>
Wisconsin’s lack of an approved state budget is negatively impacting transportation projects and jobs. Construction bids are indefinitely postponed. The state’s Joint Finance Committee hasn’t met since June 15, when Republican infighting prevented the legislature from reaching a budget deal by the July 1 deadline. Read More>>
Also in Wisconsin, the state Department of Transportation has delayed the release of funding estimates and repair costs. First requested in January, these estimates are crucial when prioritizing upcoming projects. They are now expected in late August. Read More>>
Construction on New Mexico Highway 575, known as Navajo Dam Road, is postponed until fiscal year 2023 due to ongoing funding struggles. New Mexico Department of Transportation spokeswoman Rosanne Rodriguez said the state hopes to qualify for new federal funds. Read More>>
Many counties in North Dakota don’t have enough funding for road investments and maintenance, a new study finds. For example, Walsh County needs an estimated $30 million for road work, yet budgets only $1.6 million, about 5 percent of that amount. Read More>>
Nearly 80 percent of respondents to a Minnesota poll believe the state, not the counties, should be responsible for transportation costs. Minnesota’s transportation funding comes from a variety of sources, at the county, state, and federal levels. However, recent county sales tax measures have sparked questions over who should bear the brunt of the costs. Read More>>
Mississippi will save $3.8 million by refinancing state transportation department bonds. The bonds, designated for an Interstate 69 project, were refunded with the hope of using the savings towards additional construction projects. The I-269 project is scheduled to finish in the fall of 2018. Read More>>
The North Carolina Chamber Foundation has produced an insert on the benefits of infrastructure investment. It includes discussions on a list of upcoming projects, the economic impact of airports, and the transportation needs of a growing population. The insert can be accessed here.
Katherine Jones, ARTBA Economics Intern, contributed to this report.
Updated resource! The “2013 – 2017 State Motor Fuel Tax Increases” Roundup provides a summary of all state legislation to increase taxes on motor fuel for transportation investment since 2013. The report provides an overview of the 23 states that voted to increase motor fuel taxes, as well as a description of the five states that adjusted their variable-rate state gas tax formulas to preserve or increase revenue for roads, bridges, transit, and more. Read the report.
State senators in Wisconsin introduced a new proposal for a state budget on July 18, a tactic intended to get discussions back on track after a month-long stalemate. The plan contains measures from Gov. Scott Walker’s (R) original proposal and includes extensive borrowing for road funding, a policy the Assembly has repeatedly rejected in favor of raising taxes or fees. Read More>>
Wisconsin is also contending with a state department of transportation audit released in January, which revealed that highway project costs have been consistently underestimated. Nineteen recent projects cost the state $1.5 billion, about double their estimated cost. Proposals to correct the issue include altering contractor policies, eliminating wage laws, and prohibiting overspending. Read More>>
North Carolina’s State Transportation Improvement Program (STIP) was updated on June 28 to include 144 additional projects and accelerate 350 existing projects. New revenue projections allowed officials to increase spending by $2.5 billion. Read More>>
A recent budget package approved on July 6 in Illinois included an elimination of ethanol wholesalers’ tax credits. This change will likely increase per-gallon costs by 3 to 5 cents as distributers pass the cost onto consumers. These additional dollars will be deposited as a sales tax in the state’s general fund. Read More>>
House member Jim Hanson (R-Frankford) of Missouri stated on July 9 that transportation will be a priority for the upcoming legislative session. He believes a gas tax increase will be necessary, but any tax raising more than $80 million would require voter approval. Formal recommendations on this and other policies will come from a newly formed state “transportation task force” in January 2018. Read More>>
Indiana’s Next Level Roads project was kicked off by Gov. Eric Holcomb (R) and Indiana Department of Transportation Commissioner Joe McGuinness last week. The plan includes about $4.7 billion in project investments over the next five years, and an additional $342 million annually until 2024. Read More>>
Alabama Speaker Mac McCutcheon (R-Monrovia) predicts that the state will likely wait two years until making a serious attempt to increase the state gas tax. Read More>>
Katherine Jones, ARTBA Economics Intern, contributed to this report.
From left to right: Louisiana state Rep. Kenneth Havard, Montana state Rep. Frank Garner, Tennessee Senate Speaker Pro Tem Jim Tracy, and Oregon state Rep. Brad Witt.
Photo courtesy of Leslie E. Kossoff.
By Mark Holan, editorial director, ARTBA
Four state lawmakers discussed legislative strategies and political challenges for funding roads, bridges and other transportation infrastructure during the 4th National Workshop for State & Local Transportation Advocates, hosted July 13 in the Nation’s Capital by ARTBA’s Transportation Investment Advocacy Center.
The panel included three Republicans: Tennessee Senate Speaker Pro Tem Jim Tracy, Louisiana state Rep. Kenneth Havard, and Montana state Rep. Frank Garner, and Oregon state Rep. Brad Witt, a Democrat. All four are members of their respective state’s transportation or finance committees.
A few themes emerged from the panel discussion moderated by Rich Juliano, managing director of ARTBA’s P3 Division.
Building credibility and trust is important. So is educating the public.
“Make sure the money goes where you say it’s going,” Havard said. Louisiana faced strong skepticism because two projects promised during a 1989 gas tax increase, the state’s last, had not been completed.
“Citizens really don’t trust government,” lamented Tennessee’s Tracy.
The challenge is compounded at times by the public’s limited knowledge about how transportation construction is funded, and why it’s important, Tracy said. Anti-tax, outside groups also muddy the debate with misinformation.
“You have to hit them head on. They don’t have any solutions,” Tracy said. “You just have to be courageous.”
Witt said Oregon’s DOT conducted 15 town hall meetings to educate taxpayers.
Building strong statewide coalitions is also critical.
“You get a lot of the problems fixed in advance with coalitions,” said Montana’s Garner. “As much of that work as you can get done before you walk in the [statehouse] door makes the process a lot more efficient.”
Coalitions should be as broad-based as possible, he said, including non-traditional partners.
Witt added that it’s also important to neutralize the opposition.
Finally, Tracy suggested a strategy that happens too infrequently in government: finding support across the political aisle.