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.
- Minnesota Mark Dayton (D) approved the state department of transportation’s budget on April 3, allowing the agency to utilize $105 million in federal funding approved by the FAST Act to complete over 28 highway, road and bridge projects. Lawmakers will now turn their attention toward reaching a compromise on increasing state transportation funding.
Approved by Legislature
- California lawmakers approved a $52.4 billion transportation funding plan on April 6, including a motor fuel tax increase and higher vehicle registration fees. (Read the full synopsis of the bill on the TIAC blog.)
- Alabama lawmakers introduced House Bill 487 on April 6 to issue a $1.2 billion bond for counties and cities and $1.2 billion bond for the Alabama Department of Transportation. The bonds would be funded with a gradual 6 cents-per-gallon motor fuel tax increase, with the possibility of a future additional 3 cents-per-gallon “conditional” motor fuel tax increase. The bill would also impose tag fees on alternative fuel vehicles. All revenue would be spent on roads and bridges, with the plan of raising enough revenue to provide a match for future federal funding.
- A Louisiana bill to increase the state motor fuel tax by 7 cents-per-gallon was prefiled on March 31.
- Two Louisiana lawmakers announced on April 5 their intention to introduce separate transportation funding bills, one of which could increase the state gas tax by 17 cents-per-gallon.
- Wisconsin Gov. Scott Walker’s (R) plan to borrow additional money for transportation funding and delay road construction projects was rejected by the Republican-controlled Joint Finance Committee on April 6. Many state lawmakers are instead calling for a long-term transportation funding solution.
Existing Legislation Progress
- West Virginia House lawmakers overwhelmingly approved a bill April 7 that asks voters to authorize the legislature to bond up to $1.6 billion for road work. The measure had been approved by the Senate in March, but House committee amendments included language that could permit the legislature to collect a state tax to pay the interest and principal of the bond, not to exceed 25 years.
- The Colorado House advanced a measure on March 31 to ask voters for approval of a 0.62-cent statewide sales tax increase in order to generate $695 million for transportation funding over the next 20 years. Lawmakers approved the bill 41-24 largely along party lines, with four Republicans joining Democrats in support of the bill. The legislation has been assigned to the Senate Transportation Committee.
- On April 4 the Indiana Senate voted 34-13 to advance an amended version of the legislature’s transportation funding plan. The bill still includes a gradual 10 cents-per-gallon gasoline tax increase, indexed to adjust annually according to changes in the Consumer Price Index for all Urban Consumers (capped at a 1 cent increase per year), and raises the special fuel tax and surcharge tax. Both plans also create a Transportation Infrastructure Improvement Fee based on vehicle weight and an additional fee of $150 for electric vehicles and $75 for hybrid vehicles, indexed to increase every five years. The Senate version adds a cigarette tax (a proposal Gov. Eric Holcomb (R ) is opposed to), phasing out a moratorium on corporate income taxes, and a requirement that Indiana businesses and workers get priority on projects. The plan now goes to conference committee to negotiate a compromise.
- The Oklahoma Senate Appropriations Committee recommended a bill on April 5 to establish a $150 electric vehicle fee and $30 hybrid vehicle fee. The bill was passed by the House on March 8.
- On April 6 South Carolina senators ensured that House Bill 3516 would receive priority status when the legislature reconvenes on April 18, which will bring it up for debate on the Senate floor.
- Tennessee’s IMPROVE Act is on the April 11 calendar for approval in the House and Senate Finance, Ways and Means Committee.
Visit TIAC’s “State Legislation Page” to view all state transportation funding legislation under consideration in 2017.
California lawmakers on April 6 approved a plan to boost transportation funding by $5 billion annually through a combination of motor fuel and vehicle registration increases. The bill, which narrowly passed along party lines, is projected to raise $52.4 billion over 10 years, which will be used to fund road and bridge maintenance and improvements, as well as transit and trail infrastructure.
The approval of Senate Bill 1 will:
- Increase the state gas tax by 12 cents-per-gallon and the diesel tax by 20 cents-per-gallon, with an additional 4 percent increase in the diesel sales tax, beginning Nov. 1, 2017.
- Eliminate the current Board of Equalization “Gas Tax Swap” formula for a variable-rate motor fuel tax based on annual changes to the Consumer Price Index beginning July 1, 2019.
- Create a Transportation Improvement Fee based on the market value of the vehicle beginning Jan. 1, 2018.
- Implement a Zero-Emission Vehicle Fee of $100 for electric vehicles beginning in 2020 for model year 2020 or later.
- Require the California Department of Transportation (Caltrans) to generate up to $100 million in department efficiencies, overseen by the newly-created Transportation Inspector General.
Legislation to change taxes must be approved by a two-thirds majority in California. State Democrats recently secured two-thirds majority in both chambers of the legislature, but several voiced hesitation on giving their support. The hours leading up to passage involved vigorous negotiations, including allocating some of the new revenue for specific projects. Senate Bill 1 passed the California Senate shortly after 7pm PT with a vote of 27-11, with only one Republican voting in favor of the bill and one Democrat opposed to the plan. The California Assembly subsequently approved the bill 54-26 at 10:40 pm PT, with one Democrat voting against the bill and no Republicans supporting the bill.
In addition to Senate Bill 1, California lawmakers also approved Assembly Constitutional Amendment 5, a bill that will prohibit the legislature from borrowing revenue generated by all taxes and fees on motor vehicles for non-transportation purposes. A transportation fund “lockbox” was already in place to prevent revenue derived from gasoline and diesel excise taxes and vehicle registration fees from being utilized for non-transportation purposes. The bill will go before state voters in the November 2018 General Election for final approval.
Gov. Jerry Brown (D) strongly championed for this legislation since the plan was introduced on March 29. The governor appeared before both chambers in the legislature as well as the districts of state lawmakers who voiced hesitation about signing on to the bill. He is expected to sign Senate Bill 1 into law shortly.
Read a fiscal analysis for Senate Bill 1.
Read a fiscal analysis for Assembly Constitutional Amendment 5.
South Carolina Gov. Henry McMaster (R) vowed on April 4 to veto any legislation that includes a state gas tax increase. Instead, the governor urged lawmakers to approve bonds for highway construction. The legislature approved $1 billion in bonds in 2013 and $2 billion in bonds in 2016. The House approved a bill in March with a veto-proof majority (97-18) to generate $530 million annually, including a 10 cents-per-gallon gas tax increase. The Senate Finance Committee amended the bill to generate $800 million and include a larger gas tax increase, but a coalition of senators has blocked the bill from receiving a full Senate vote. Read More>>
A nonpartisan analysis by the Legislative Budget and Finance Committee found that the Pennsylvania State Police is receiving $220 million more from the Motor License Fund (revenue from state motor fuel taxes and vehicle registration fees) than they should be. The state police should be receiving just over $530 million annually, while last year the department was granted over $750 million. If the additional $220 million had been retained by the Pennsylvania Department of Transportation the agency could have repaired 1,111 miles of road or replaced 138 bridges. Read More>>
Despite passing legislation in 2015 that increased transportation funding, Michigan still has $3.3 million in unfunded road repair projects according to the latest report from the National Transportation Research Group released April 4. Read More>>
Facing a state transportation funding shortfall, the Kentucky Transportation Cabinet announced a road project prioritization model called the “Strategic Highway Investment Formula for Tomorrow” (SHIFT). SHIFT would determine project priority based on a formula that weighs 25 percent safety, 20 percent congestion mitigation, 20 percent economic development, 20 percent asset management, and 15 percent cost/benefit analysis. The model follows the “Pause 50” program, announced June 7, 2016, which initiated a yearlong delay in funding state projects in order to prevent the state’s road fund balance from going into the negative. “Pause 50” is expected to end on July 1. Read More>>
Several South Carolina state senators on March 29 prevented a transportation funding bill from being scheduled for debate. The legislation fell five votes shy (23-18) of the required two-thirds supermajority vote needed for priority status. The bill, which would increase motor fuel taxes and transportation-related fees, was approved by the House 97-18 on March 1. Read More>>
Minnesota Gov. Mark Dayton (D) urged lawmakers to approve a transportation budget by March 31 in order to prevent the state from losing federal matching funds for existing transportation projects. Legislators failed to approve the budget, which would have included $300 million in transportation bonds, by the end of the 2016 legislative session. Read More>>
The Missouri House Transportation Committee does not believe a major transportation funding bill will be able to pass this year. Instead, House Transportation Committee Chairman Bill Reiboldt (R- Neosho) anticipates a transportation funding task force will be created this spring, and a comprehensive proposal will be introduced in the legislature in January 2018. Read More>>
Additionally, a Missouri budget committee approved a bill 32-0 on March 28 that would prevent the state from using money from any account for toll-related purposes. Read More>>
As Louisiana lawmakers explore options to increase transportation funding, the state Americans for Prosperity chapter has released an online ad that accuses the state department of transportation and politicians of diverting revenue intended for transportation projects. Shawn Wilson, secretary for the Department of Transportation and Development, said the ad makes false claims and is meant to erode public confidence in the agency. Read More>>
Additionally, an annual poll by Louisiana State University found that voters were more likely to support raising the state gas tax for better roads and bridges than they were to support any other revenue-raising measure for other services. Read More>>
Amidst discussions on how to close Wisconsin’s transportation funding shortfall and balance the budget, Gov. Scott Walker (R) on March 29 tweeted his resolution to veto any legislation that includes a gas tax increase. Sen. Luther Olsen (R- Ripon) warned that the agency is “spiraling down into a hole where it will cost us so much to get our roads into shape, that we’ll never get it done.” Read More>>
The Texas Transportation Commission is proposing to spend $8.9 billion on 230 projects. Read More>>
- Utah Gov. Gary Herbert (R) on March 25 approved legislation that permits the department of transportation to authorize up to $1 billion in general obligation (GO) bonds over the next four years to accelerate transportation projects. Gov. Herbert signed into law another bill to adjust the state’s variable-rate motor fuel tax four days prior to the bond bill.
- New Jersey Gov. Chris Christie (R) on March 27 approved legislation that will utilize $400 million from the state’s transportation fund for immediate construction work on the state’s roads and bridges. The additional appropriation is a result of 2016 legislation that increased the state gas tax by 23 cents per gallon.
Legislation Awaiting Governor Approval
- Legislation to provide $300 million in Grant Anticipation Revenue (GARVEE) bonds and reroute 1 percent of the state’s sales tax proceeds to transportation projects was approved by Idaho lawmakers on March 28. The Senate approved the bill 19-6 just one day after it was introduced, followed closely by the House with a vote of 51-19. An additional bill to provide $52 million in emergency road funding for counties that have received a gubernatorial declaration of disaster was also approved the same day. Both bills are pending final approval from Gov. Butch Otter (R).
- California Gov. Jerry Brown (D) and Democratic leaders on March 29 announced a $5.2 billion transportation funding proposal that could increase fuel taxes by 12 cents per gallon and registration fees (based on average mileage, vehicle miles-per-gallon, and vehicle value) if approved by the legislature. The package also includes a provision to prevent lawmakers from using transportation-related revenue for non-transportation purposes. Gov. Brown and leading Democratic lawmakers set a goal of April 6 to pass the legislation.
Existing Legislation Changes
- A Montana bill to increase the state motor fuels tax passed the House on third reading 54-45 on March 29. The bill now goes to the Senate for consideration.
- A comprehensive transportation funding package was passed by an Indiana Senate committee with amendments on March 28 and will likely go before the full Senate next week. If the Senate approves the measure it will go back to the House to confirm the amendments.
- Tennessee’s IMPROVE Act continues to advance through committees in both the House and the Senate. House Bill (HB) 534 passed the Local Government Committee on March 28 and now goes to the Finance, Ways and Means Committee. The Senate Finance, Ways and Means Committee is scheduled to review the bill on April 4.
- Mississippi lawmakers failed to reach an agreement on the state department of transportation’s budget bill before the legislative session ended on March 27. Disagreement over whether to dedicate revenue from a voluntary internet sales tax to transportation funding led to the impasse between the House and the Senate. Gov. Phil Bryant (R) may call a special session to address the unfinished legislation.
- An Arkansas measure to earmark existing internet sales tax revenue for highway projects was approved by the House on March 27 and is now with the Senate Committee on Revenue and Taxation.