Maryland, Ohio, Virginia Move Transportation Measures Forward; Others See Hiccups

Transportation plans in Maryland, Ohio and Virginia are one step closer to becoming a reality this week. For other states though, the debate over how to fund transportation going forward continues. I also have some noteworthy items below on the condition of America’s infrastructure and what states are doing about it.

State Transportation Funding Updates

  • Arkansas: A proposal to divert sales tax revenue from new and used vehicle sales to the state highway department and local governments failed to make it past a House committee last week after education and health advocates warned the move could threaten state services, the Associated Press reported. The proposal, which was offered by Rep. Jonathan Barnett (R), a former state highway commissioner, was also opposed by Gov. Mike Beebe, a Democrat.
  • Iowa: KCRG-TV reported this week that the chairmen of the House and Senate transportation committees haven’t given up on a proposed 10-cent gas tax increase to be phased in over three years. But its success this session is dependent on agreement on a property tax relief bill. Gov. Terry Branstad has said he’d support a gas tax increase if the overall tax burden for Iowans is lowered. A coalition of transportation interests rallied in Des Moines last week in support of a higher gas tax, The Waterloo Cedar Falls Courier reported.
  • Maryland: The state Senate Friday gave final approval to legislation that will increase the state gas tax for the first time in 20 years, The Washington Post reported. The increase, which will require motorists to pay 13 to 20 cents more by mid-2016, will be phased in starting with a 4 cent-a-gallon increase in July. As in Virginia, the Maryland plan includes a new wholesale tax on gas that will keep pace with the price of fuel. Transportation officials expect the plan to yield $4.4 billion for new projects over the next six years. Stephen Lee Davis at Transportation for America had an interesting blog post last week about how Maryland got here. “When Maryland’s Intercounty Connector (ICC) highway opened in 2011,” he writes, “it did more than create a new east-west toll road between I-270 and I-95 in the northern suburbs of Washington, DC. It also severely hampered Maryland’s ability to build other large-scale transportation projects for years to come. But now there’s significant momentum to raise new state revenues for transportation to ensure that the state won’t have to shelve their plans for a 21st century transportation system.”
  • Massachusetts: House Speaker Robert DeLeo and Senate President Therese Murray this week outlined a proposal to generate $500 million in new revenues each year for transportation—only about half of what Gov. Deval Patrick has said is needed, WBUR reported. The plan includes a 3-cent increase in the state’s 21-cent gas tax starting in 2015. The tax would also be indexed to inflation.
  • New Hampshire: The Democrat-led House last week approved a 12-cent-a-gallon increase in the state gas tax, The Manchester Union Leader reported. Leaders of the Republican-controlled Senate have called the measure (and an earlier version of the bill that would have raised the tax by 15 cents) “dead on arrival.” The Senate earlier this session approved a casino gambling bill that dedicates some of the state’s revenue to fix roads and bridges. The House bill would also establish a committee to study alternatives to the gas tax.
  • Ohio: Gov. John Kasich this week signed the legislation that will allow the state to use toll revenue from the Ohio Turnpike for other unrelated transportation projects, The Cleveland Plain Dealer reported. House Bill 51 sets a two-year transportation budget, provides for the issuance of Ohio Turnpike bonds and raises speed limits on rural Ohio highways to 70 mph.
  • Virginia: Gov. Bob McDonnell’s amendments to an $880 million transportation package appear likely to survive today’s one-day veto session in Richmond, The Washington Times reported. McDonnell signed the bill last week but the legislature must sign off on the amendments to the transportation plan, which ends the state’s 17.5-cent-per-gallon gas tax, institutes a wholesale tax on fuel distributors (3.5 percent for gas, 6 percent for diesel), boosts the state sales tax to 5.3 percent (up from 5 percent), increases the vehicle sales tax to 4 percent (up from 3 percent), and prohibits tolls on I-95 without legislative approval. The legislation would take effect July 1. As noted previously, McDonnell’s amendments would reduce the amount of revenue the legislation will generate and address constitutional concerns about the state imposing taxes on specific localities in Northern Virginia and Hampton Roads to pay for transportation projects there.

Additional Reading

  • Ken Orski, editor and publisher of the influential transportation newsletter Innovation NewsBriefs, writes this week about the debate over the severity of America’s infrastructure needs. His piece highlights, among other things, President Obama’s new infrastructure plan, Republican concerns about what they see as excessive discretionary spending, the American Society of Civil Engineers’ 2013 Report Card for America’s Infrastructure which gives highways a barely passing grade and a recent Reason Foundation study that found America’s highways and bridges are in better shape than they were 20 years ago. Orski argues that while no one disputes the claims of infrastructure advocates that some transportation facilities need reconstruction and that others need to be expanded to serve a growing population, the situation may not rise to the level of needing a $50-70 billion program like the President is proposing or more than $100 billion a year as ASCE says is needed. “Instead,” he writes, “the challenge can be met if each state did its part to incrementally, over a period of years, bring its transportation facilities up to a ‘state of good repair’ using its own gas tax revenues and its formula allocation of the Highway Trust Fund dollars. As numerous news dispatches attest, that is precisely what’s happening. A growing number of states are not waiting for the federal government to come to the rescue.” Orski says states can use public-private partnerships, tolling and long-term credit instruments to finance large-scale projects that they aren’t able to fund on a pay-as-you-go basis.
  • The Washington Post’s Ashley Halsey III wrote last week that “a politically iconic and locally vital highway is dying.” The Capital Beltway around Washington, Halsey writes, is turning to mush under the weight of a quarter-million cars a day. As it reaches the 50-year mark, the Beltway like tens of thousands of roadways across the country is reaching the end of its natural lifespan. “In a perfect world,” he writes, “it would be torn up—the asphalt and concrete, and the bed of crushed stone below—right down to the bare earth. From that fresh start a new and stable highway would grow. But this is the Beltway, and closing down whole sections of it would tie one of the most congested regions in the nation into a Gordian knot.” Halsey also writes that many states are waking up to the fact that they can’t rely on an austerity-minded Congress to come up with additional transportation funding to repair and replace aging infrastructure. In the neighborhood of half the states have looked at new ways to fund transportation this year, Halsey notes.
  • There is still time to register for our webinar this week on ASCE’s 2013 Report Card for America’s Infrastructure. Brian Pallasch, ASCE’s Managing Director of Government Relations and Infrastructure Initiatives, will take us through the report card. We’ll also get a state government perspective on the report and on performance measurement from Michigan Department of Transportation Director Kirk Steudle. You can register for the free webinar here.