New Transportation Revenues Have to Wait for Special Session in Washington State; Updates on Six Other States

An $8.5 billion transportation revenue package in Washington State, including a 10-cent gas tax hike, will have to wait for a special session after lawmakers adjourned their regular session this week without passing the package, which would have provided a companion to an $8.8 billion transportation budget they did approve. I also have updates on transportation funding developments in six other states.

Washington Lawmakers Approve Transportation Budget Without Tax Package

The Washington state legislature this week passed an $8.8 billion transportation budget plan that invests in road maintenance and continues spending on big-ticket projects like the Alaskan Way Viaduct tunnel project in Seattle but doesn’t fund any new projects, the Associated Press reported. Lawmakers abandoned for now a transportation revenue package to augment the budget, which is expected to resurface in a special session sometime later this year. House Democrats proposed an $8.5 billion, 12-year package that would include a 10-cent gas tax hike and provide funding for more big-ticket projects including the Columbia River Crossing. House Transportation Committee Chair Judy Clibborn (who is the incoming co-chair of CSG’s Transportation Public Policy Committee) said although she had enough votes in the Democratic caucus to pass the package, there wasn’t enough time to win over the Republican-controlled Senate before the regular session wrapped up Sunday night. Senate Republicans want any tax hike package to go before the voters. They’re also expressing opposition to the current design of the Columbia River Crossing project, contending it’s too low to accommodate passing ships and shouldn’t include light rail.

The approved budget does include $400,000 for the next phase of a study on charging drivers by the mile. The state Transportation Commission will be charged with developing the business case for such a system and clarifying the governance of a mileage tax.

Other State Transportation Funding Updates

  • Massachusetts: House and Senate negotiators met Thursday to begin working out differences between the two versions of a plan to raise $500 million in new gasoline and cigarette taxes for the state’s transportation system, the Associated Press reported. Governor Deval Patrick, who has asked for nearly $2 billion in new taxes for transportation and education, has said the Senate version is an improvement over the original House bill, which he called a “fiscal shell game.”
  • Michigan: The House last week voted to eliminate tax incentives for making movies in Michigan so those funds could be shifted to maintenance of roads, according to The Detroit News. The House’s budget strips $25 million set aside for the film industry and another $25 million for economic development through the Strategic Fund. “Fixing our roads helps Michigan motorists and all of our job providers, not just a limited economic sector that the film credits would help,” said Rep. Tim Kelly. But the House plan is far from a done deal. The Senate voted Tuesday to provide $50 million in film incentive funding, according to Gongwer News Service. Gov. Rick Snyder requested just $25 million for the incentives in his proposed budget in February.
  • Minnesota: Mark Fischenich of The Mankato Free Press wrote recently about how the Minnesota Department of Transportation is being thrust into the new role of salesman to try to make the case to the public on the value of more transportation spending. Governor Mark Dayton has nixed the idea of a gas tax increase during the current legislative session but he wants to start building public support for a comprehensive approach to improving the state’s infrastructure. But the department is just in the early stages of shaping a strategy to make the case for new revenues and what kinds of revenue sources they might eventually get behind. MnDOT Commissioner Charles Zelle said at a recent forum that most state leaders, including Dayton, “like to imagine there’s some revolutionary revenue source less unpopular than the gas tax that will bring the needed dollars to transportation,” the newspaper reported. “On the other hand, pennies don’t really come from heaven,” Zelle said. Zelle, who was a member of the state’s Transportation Finance Advisory Committee last year before being appointed as commissioner, gave me some thoughts on the task of marketing a plan to the public when I spoke to him recently for an upcoming Capitol Research brief. “(The advisory committee) did consider that there should be some simplicity in terms of knowing that whatever the funding mechanism … we need to explain this and it needs to be understood,” he said. “I think that a number of experts who came in to give advice were saying don’t try to get caught up in very complicated things, which don’t really provide that much resources or that much benefit.”  Zelle also talked about his new mission and how unusual it is for a state DOT to find itself in such a role. “(Dayton) has charged me to go around the state and actually start gathering input and talking about what the resource needs are, what Minnesota would look like for the next 20 years without the funding and kind of start talking about how the funding can make a difference … It’s not often that we’re asked to kind of make the case. A lot of state agencies, at least this one, have never really been in an advocacy role. We’re more analysts.”
  • South Carolina: Tim Smith of The Greenville News reports that one thing state transportation officials are considering to relieve the heavy burden of maintenance on state roads is to transfer ownership of some of those roads to local governments or private landowners who agree to maintain them. Although lawmakers are finally debating new transportation revenue streams this year, Smith writes, they are unlikely to come up with a plan to completely meet the state’s infrastructure needs—estimated at $29 billion over the next 20 years.
  • Vermont: Gov. Peter Shumlin signed the transportation budget bill Monday that contains both a new 2 percent assessment on the price of gas and a per-gallon tax decrease of 0.8 cents, The Burlington Free Press reported. The overall effect is a net increase of 5.9 cents per gallon. The new tax rates went into effect Wednesday. A two-cent increase in the price of diesel goes into effect July 1.
  • Wisconsin: Marti Mikkelson of WUWM Milwaukee Public Radio reported this week on the state’s efforts to grapple with a shortfall in the state’s transportation fund that is now expected to reach $63 million by mid-2015 due to declining gas tax revenues. Democratic State Rep. Jon Richards laments that Republican leaders have ignored the recommendations from a bipartisan task force (also detailed in my forthcoming Capitol Research brief) which included a five-cent-a-gallon gas tax increase and the creation of a new vehicle registration fee based on miles driven. Republicans are also reluctant to borrow more for transportation. State transportation officials are now recommending slowing construction of such projects as the Zoo Interchange rebuild in Milwaukee and trying to cut the cost of other road and transit projects. A general fund transfer for transportation and an increase in tolling are other ideas that have been floated but neither appears to have much support.