State Transportation Funding Efforts Unlikely to Continue at Same Pace

More than 20 states considered transportation funding issues in 2013 and six approved major funding overhauls. But don’t expect a repeat of that level of state activity in 2014. 
That’s the outlook from reporters who cover state government, politics and transportation. Many of them said political concerns, competing priorities and other factors seem likely to derail transportation funding efforts this year, even in states that seemed poised to tackle the issue just a few short months ago. 
“Right now, everybody in West Virginia is focused on poisoned water,” said Dave Boucher, capitol reporter for the Charleston Daily Mail, on a Jan. 31 CSG webinar. “So the likelihood of any sort of legislation from the governor on transportation is slim to none.”
That wasn’t always the case. 
A blue ribbon commission on highways formed by Gov. Earl Ray Tomblin last year issued recommendations that were expected to form the basis for legislation during the 2014 session.  Commission members considered several policy options, including increased tolls on the West Virginia Turnpike, increased fees, redirected sales tax revenues and bonding. But once the extent of a January chemical spill and lingering concerns about its impact on the water supply became apparent, that part of the state’s infrastructure took precedence. 
In Idaho, gubernatorial politics is making new transportation funding less likely this year, despite support in years past from Gov. Butch Otter, who faces re-election in 2014.
Dan Popkey, political columnist for The Idaho Statesman, said local governments, highway districts, labor and the Associated General Contractors trade association revived a coalition and started to build ground support for transportation funding once the economy began to improve.
“They hoped that 2014 was going to be the year,” Popkey said. “But in October, the governor got a Tea Party challenger … and that was the end of it basically.”
In December, Popkey said, Otter was asked about his top priority for the state in 2014. “His answer was ‘gettin’ me re-elected.’”
Indeed, unlike in 2013 when few state elections were in play, incumbency is likely to play a significant role in whether states take on controversial issues like tax increases to fund transportation, said Dan Vock, who tracks transportation and other issues for Stateline, a national news service of the Pew Charitable Trusts. 
“Thirty-six governors’ seats will be determined this year, so a lot of leaders have other things on their minds, namely re-election,” he said. “Legislators (are) the same way.”
With 46 states holding legislative elections this year, he said, “there’s a lot going on that might take legislators’ attention away from this issue.”
The webinar included plenty of examples of states where transportation appears likely to take a backseat this year despite groundwork laid earlier. Among them:
  • Washington: The state seemed on the verge of passing a major transportation package in 2013, but lawmakers were never able to get anything across the finish line. They considered different versions of a 10- to 12-cents per gallon gas tax increase to fund maintenance and preservation as well as new projects, said Jordan Schrader, state capitol reporter for The News Tribune in Tacoma. He said Gov. Jay Inslee would sign legislation if both parties agreed on such a package. “But there are a lot of sticking points and after a year of listening sessions with the public and negotiating sessions, things just seem to be stuck,” he said. Senate Republicans want to see reforms at the state department of transportation. Democrats want more spending on mass transit. The governor also has signed on to a multi-state climate change initiative that some believe could increase the price of gas. An official in Seattle’s King County, the state’s major population center, has proposed “going it alone” to fund transportation improvements locally by asking voters to approve a ballot measure in April that would raise fees and taxes. All appear to complicate prospects for a statewide funding plan this year, Schrader said.
  • Wisconsin: In 2013, Gov. Scott Walker said he wanted a sustainable transportation funding alternative to the gas tax. He tasked Transportation Secretary Mark Gottlieb with trying to come up with a plan. “We have not seen a concrete proposal so far,” said Mary Spicuzza, state government reporter for the Wisconsin State Journal in Madison. Walker talked more in his State of the State address about tax cuts, she said. “It is an election year for him, so I don’t think he’s going to suddenly back gas tax increases,” she said. “So we’re kind of waiting to see what becomes of transportation funding.” Assembly Speaker Robin Vos has expressed support for tolling roads in the state, a solution that would require a change in federal law for interstate tolling, Spicuzza noted.
  • Mississippi: Senate Transportation Committee Chairman Willie Simmons last year chaired a task force to come up with a transportation funding plan. The task force considered options such as an 8 percent increase in the gas tax, a 9 percent increase in the diesel tax, and the reduction of sales tax exemptions for agriculture and manufacturing. Ultimately, the panel was unable to reach consensus on a funding package. Jeff Amy, an Associated Press reporter based in Jackson, said the governor and lieutenant governor oppose raising gas taxes. “Once you take the gas tax off the table, the options become limited,” he said. “The heads of the transportation committees in the House and the Senate are both Democrats, although our legislature is majority Republican in both houses. They claim they are looking around for other sources of money.” Among the ideas being floated: borrowing money and trying to recoup funds previously borrowed from gas tax revenues for other purposes. “But there doesn’t seem to be a whole lot of support for those ideas or really, remarkably, to do anything,” Amy said. “The prospects for anything happening this year have gotten remarkably dim.” Part of the problem, according to Amy, is that the business community has not gotten behind the effort as they did when the last gas tax increase was approved in 1987.
  • Michigan: Gov. Rick Snyder made transportation funding a top priority in 2013, starting with his State of the State address in January and a speaking tour to promote his two-pronged funding proposal. Snyder’s proposal would have increased vehicle registration fees by about $120 per year, said Gary Heinlein, who covers state government and politics in the Lansing bureau of The Detroit News. The plan also would have replaced the state’s flat fuel taxes of 19 cents on gasoline and 15 cents on diesel with a proportional tax or a sales tax. “The idea behind that is that it could make road revenues somewhat inflation proof by rising with the increase in pump prices,” he said. But Snyder’s proposal failed to gain traction in the legislature and lawmakers spent most of 2013 trying to come up with their own plan for increasing transportation revenues, Heinlein said. One plan that won support involved redirecting sales tax revenues on gasoline that now go to education and other purposes to road projects. The general sales tax on other products would be increased to make up the difference in school funding. But Republican leaders weren’t able to muster the votes for that plan either. “So we enter 2014 with no change and the prospects this year are pretty dim for any kind of an increase in road funding because it’s an election year,” Heinlein said. With Snyder and legislative incumbents facing re-election and no support for a major tax increase, hopes now ride on a one-time cash infusion from a projected budget surplus.
  • New Hampshire: Legislation to implement a phased-in 12-cent gas tax increase passed the Democratic-controlled House in 2013 before being rejected by the Republican-controlled Senate. Many saw it as a casualty of a political fight over a casino license. Some lawmakers hope to try again in 2014. “Unfortunately, we’ve got the same scenario that looks like it’s going to play out again this year,” said Brian Wallstin, a digital journalist for New Hampshire Public Radio. Senate Transportation Committee Chairman Jim Rausch has proposed a bill to index the gas tax, which hasn’t been raised since 1992, to the consumer price index. “Unfortunately, the Senate president has said ‘I’ll let you bring it to the floor, but I’m going to fight it,’” Wallstin said. Gov. Maggie Hassan, who is running for re-election, has not made transportation funding a priority, Wallstin said, but she does support the license for the new casino. That’s important, because legislators also are considering a bill to commit about $50 million annually from the revenues of casino table games and slot machines to transportation projects. Consideration of any gas tax increase awaits the fate of the casino bill, which lawmakers are now starting to consider, Wallstin said.
  • Iowa: An Iowa House subcommittee recently voted in favor of legislation to increase the gas tax by 10 cents over five years, which would raise $230 million annually once fully implemented. But that initial success doesn’t mean final passage is assured, said William Petroski, senior reporter for The Des Moines Register. While the House may have enough votes to pass the gas tax increase, most people believe the Senate won’t pass it, Petroski said. One hurdle, he said, is that Iowans have expressed opposition to a gas tax increase by nearly 2-to-1 in polls conducted by his newspaper. That may be one reason Gov. Terry Branstad has yet to get behind a gas tax increase and why he and state Transportation Director Paul Trombino have been casting about for alternatives. A leaked administration memo last fall floated ideas like increased vehicle registration fees and taxing the (currently untaxed) fuel used by farmers in tractors and other equipment. “Those things are just dead on arrival in general and I think there’s widespread agreement that, despite all the things happening in terms of modern changes in transportation and that type of thing, that the gas tax is still the best way to generate new revenue,” said Petroski.
State leaders also face uncertainty about the federal transportation program and the dwindling Highway Trust Fund. If Congress does not act in the next few months, states could face substantially reduced federal transportation funding, perhaps sooner than many expect. But Vock doesn’t expect that to be a determining factor in whether states take action on transportation revenue needs this year.
“I think legislators are aware of that,” he said. “I’m not sure that they’re as aware of how imminent this could be as far as the shortfalls in federal transportation funding. … That uncertainty can work both ways, but I think mostly it’s (about) limited time and limited attention this year and limited leadership so far by the governors. Of course that could change.”

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