Transportation Funding Wins Approval from Voters, Congress, Michigan Lawmakers

As I wrote last week, Tuesday was a big Election Day for transportation in a number of places around the country. Statewide ballot measures, for example, won approval in Maine and Texas and local measures were approved in Seattle, two Colorado towns and a handful of Utah counties. But it wasn’t just at the ballot box that transportation was a focus of policy decisions. The U.S. House of Representatives worked their way toward passage of a long-term transportation bill. And Michigan lawmakers approved a long-in-the-works, $1.2 billion road funding bill that includes the eighth gas tax increase approved by a state this year. Here’s a roundup of transportation-related election results and updates on some of this week’s other key transportation developments.

U.S. House Approves Long-Term Transportation Bill

As voters went to the polls Tuesday, the U.S. House of Representatives began working through dozens of amendments towards passage of a transportation authorization measure known as the Surface Transportation Reauthorization and Reform Act of 2015, which would provide no significant increase in spending despite the concerns of state officials, infrastructure advocates and the White House that additional funding is needed to repair and renew the nation’s aging infrastructure. The House today approved the measure with wide bipartisan support on a vote of 363 to 64. House leaders are aiming for a conference committee with the Senate to approve a final bill and beat a November 20 deadline when the latest stopgap funding extension is set to expire.

It originally looked like the House bill would reflect the controversial Senate-approved pay-fors (which include selling oil from the country’s emergency oil reserves and requiring the IRS to use private debt collectors) and only provide three years of guaranteed funding for a six-year, $325 billion bill. But some believe an amendment passed today could add an extra $40 billion—enough to fund the entire six years of the House bill or five years of the Senate bill, which proposed slightly higher funding. The amendment won passage 354 to 72. The additional funds would come from a Federal Reserve surplus fund.

Among the key amendments rejected by the House this week were a proposal to increase the 18.4 cents-per-gallon federal gas tax by 15 cents and a competing one to sharply reduce the tax and allow states to play a bigger role in transportation funding.

Some transportation advocates who support a gas tax increase (which hasn’t been done since 1993) argue the House bill and its Senate-approved, largely General Fund-supported pay-fors do little to address the long-term solvency of the Highway Trust Fund.

But state officials around the country have long expressed the need for more long-term certainty in the federal program so they can feel confident about authorizing major, multi-year transportation projects. Federal transportation programs are currently operating under the 35th short-term extension in recent years. If the conference committee is able to reach agreement on a final version of the bill and send it to the President’s desk, state officials could see their wish for a longer term outlook at least partly fulfilled.

Election 2015: Statewide Ballot Measures

  • Voters in Maine Tuesday approved an $85 million bond package that will provide $65 million for road improvements and $17 million for transit and infrastructure projects. A separate $15 million bond issue provides for the construction of new homes and renovation of existing ones for low-income seniors. Housing project locations that offer access to nearby public transportation will receive funding preference.
  • Texas voters approved Proposition 7, which could add as much as $2.5 billion annually for the next decade for road construction. It doesn’t raise taxes but will divert money from existing taxes and direct it to transportation. But public transit advocates worry the measure will enshrine congestion-producing transportation policy in law for the next decade since the measure specifies the money can only be spent on roads and not on transit, bike paths and other infrastructure. Proposition 7 funds also can’t go to toll roads, which have become unpopular in the state in recent years. Last year, Texas tapped its rainy day fund to direct $1.7 billion more a year to transportation, which fell short of the $5 billion state transportation officials said was actually needed.
  • Washington voters rejected a gas tax increase on the statewide ballot. But since the vote was advisory only and nonbinding, the 11.9 cents-per-gallon increase approved by lawmakers this summer will still go into effect. Drivers in fact are already paying 7 cents per gallon more. The additional 4.9 cent increase kicks in next July.

Election 2015: Local Ballot Measures

  • Voters in Seattle approved a nine year, $930 million property tax increase to fund expansion of bus rapid transit, sidewalk and road repairs, bike lanes, bus stations, bridge work and other improvements. Supporters touted the measure’s comprehensive approach to solving the city’s growing traffic problem. Opponents pointed to the burden of higher property taxes and noted voters may be asked to approve a $15 billion levy next year to fund Sound Transit, the Puget Sound region’s commuter train service.
  • Voters in Snohomish County, Washington approved a 0.3 percent sales tax increase to fund Community Transit.
  • A proposition to enact a 0.25 percent general sales tax for transportation considered in 17 Utah counties saw mixed results. It won support in at least six counties but appeared to fall short in Salt Lake, Utah, Uintah and Juab counties. Sixty percent of revenues from the tax increase were slated to go towards road improvements and 40 percent to bus and train service.
  • Voters in Fraser, Colorado approved a 1 percent sales tax increase to fund local buses.
  • Winter Park, Colorado residents approved a 2 percent sales tax increase to help fund operation and expansion of the Winter Park Resort Shuttle.
  • Voters in Delta County, Michigan approved a 5 year renewal of a property tax to fund Delta Area Transit Authority operations.
  • Scio Township, Michigan voters approved a 10-year property tax to expand Ann Arbor Transportation Authority bus service.
  • Salem, Oregon voters rejected a payroll tax to fund expanded bus service to evenings and weekends.

 

Michigan Lawmakers Approve Road Funding

State lawmakers in Michigan ended years of debate over road funding Tuesday when they narrowly approved a $1.2 billion plan that calls for $600 million in higher taxes and $600 million in unspecified general fund budget shifts or cuts.

The plan would raise the state gasoline tax by 7.3 cents a gallon and the diesel tax by 11.3 cents a gallon. Vehicle registration fees on all passenger cars, vans and trucks will also increase under the plan. The increases won’t kick in until January 1, 2017—two months after incumbent lawmakers face re-election next November.

The fuel tax increase is expected to generate $400 million more annually for road repairs while the higher registration fees add $200 million to the state’s underfunded transportation fund.

The fuel tax will also be indexed to the rate of inflation starting in 2022, with future increases capped at 5 percent annually.

The new revenues produced by the gas tax and registration fee increases would go through a state spending formula that includes a share for rail and transit. The general fund money would not be subject to that formula and would go entirely toward roads.

With passage of the measure (and pending the signature of Gov. Rick Snyder, who has said he expects to sign it), Michigan becomes the eighth state to approve a gas tax increase in 2015. The others include Georgia, Idaho, Iowa, Nebraska, South Dakota, Utah and Washington. Legislators from those states and several others that passed transportation revenue measures this year will be on hand when the CSG Transportation Public Policy Committee convenes at the CSG National Conference in Nashville on Friday, December 11. You can read more about the session here and register for the meeting here.

Further Reading

2015 Elections

U.S. House Transportation Bill

Michigan Transportation Funding Bill