What Happened: Louisiana’s Transportation Trust Fund needs nearly $15 billion more in order to meet the state’s infrastructure needs. The shortage is primarily due to vehicle fuel efficiency gains and a stagnant gas tax, according to a Sept. 1 report from the office of the Louisiana Legislative Auditor.
Why it Matters: The report found that the state motor fuels tax of 20 cents per gallon has been an insufficient source of funding for the TTF. The tax has not been increased since 1990 and is not indexed for inflation. The Legislative Auditors office listed higher fuel efficiency – the average fuel efficiency for a passenger vehicle was 18.8 miles per gallon in 1990 compared to 22.9 miles per gallon in 2020 – as another primary reason for decreased gas tax revenues. The report further projects that the TTF will lose $532 million between 2023-2032 as a result of higher vehicle fuel efficiency and increasing numbers of electric vehicles.
The report also found that TTF revenues have also been hamstrung via debt service from the Transportation Infrastructure Model for Economic Development (TIMED) program – a special state fund designed to use transportation improvement projects to increase economic development. The program was completed in 2016, but $309.6 million in TTF revenues between 2015 to 2021 were diverted to cover the repayment of revenue bonds used to finance TIMED projects. An estimated $902.6 million of TTF revenues will be used to continue to pay-off TIMED debts over the next 24 years.
The funding shortfall has grown from an estimated $12 billion backlog identified by a legislative audit in 2015, despite several one-time funding measures and passage of a new electric vehicle fee.