The Federal Highway Administration (FHWA) on October 6 announced the latest recipients of federal grants to enable testing of alternative methods of transportation funding. The $95 million Surface Transportation System Funding Alternatives program was established under 2015’s FAST (Fixing America’s Surface Transportation) Act.  

President Trump this week appeared to back away from what was expected to be a cornerstone of his plan to spend $1 trillion on infrastructure. Meanwhile, federal autonomous vehicle policy gets an update from the U.S. Department of Transportation and in new legislation expected to go before a U.S. Senate committee next week.

CSG Midwest
Stuck between the reluctance to raise taxes and the omnipresent need to fix transportation systems, legislators and governors may well feel the frustration of drivers caught in traffic. In Wisconsin, for example, Gov. Scott Walker and Assembly and Senate Republicans have been at odds over how to close an almost $1 billion deficit in transportation spending. Walker’s initial $6.1 billion transportation budget, unveiled earlier this year, included a $40 million increase in general transportation aid to local governments and $500 million in borrowing.
In early May, Assembly Republicans proposed raising gasoline taxes to pay for roads while significantly cutting income taxes over the course of a decade, moving from the state’s progressive income tax to a 3.95 percent “flat tax.” Their plan includes new fees on hybrid ($30) and electric vehicles ($125) and the elimination of tax credits aimed at homeowners. It also would cut the existing 30.9-cent per-gallon fuel tax by 4.8 cents while applying the 5 percent state sales tax to fuel purchases.
The Legislative Fiscal Bureau estimated those changes would increase revenue by about $380 million over the next two years, most of which would be used to reduce the borrowing that Walker proposes (from $500 million to $200 million) and to eliminate a transfer of funding from the general fund to the transportation fund.
Gov. Walker rejected the plan’s new sales tax on gasoline, saying it amounts to a new gas tax, but has indicated that he’s open to the tolling of interstates (another proposal from Assembly leaders), if such a plan brings in revenue from out-of-state drivers and is linked to a reduction in the gas tax.
A budget all sides can accept remained elusive as of mid-June. Absent a budget in place before the state’s new fiscal year began on July 1, funding would continue at current levels until one is approved.
Since 2012, six Midwestern states — Indiana, Iowa, Michigan, Nebraska, North Dakota and South Dakota — have raised gas taxes to provide additional transportation funding. Collectively, half of all U.S. states have enacted transportation funding packages since 2012 to make up for the erosion of gas tax revenues by inflation, says Joung Lee, policy director at the American Association of State Highway and Transportation Officials.
CSG Midwest
Indiana has become the latest state in the Midwest to raise the gas tax and user-based fees to generate more revenue for its transportation infrastructure. The 10-cent increase on motor fuels takes effect on July 1; it will result in Hoosier motorists paying a total of 28 cents per gallon of gasoline. In subsequent years, through 2024, Indiana’s gas tax will be indexed to inflation, though annual increases will be limited to 1 cent per gallon.

Last December, I compiled my annual list of the states to watch on transportation funding. Last month we followed that up with a CSG eCademy webinar featuring Alison Premo Black of the American Road & Transportation Builders Association and reporters from three key states. With legislative sessions well underway in many places, it’s time to see where things stand in the debates about transportation funding going on around the country.

While the number of states exploring transportation funding options in 2016 was down from 2015’s record pace, 2017 could see significant activity. Several states had special task forces in place in 2016 to discuss funding options, while others have targeted 2017 as the year for action or are completing unfinished business from years past. During this annual CSG eCademy webinar, we’ll hear from transportation experts and statehouse and transportation beat reporters about what could lie ahead in 2017 legislative sessions around the country.

Issue: During the campaign, Donald Trump called for a $1 trillion package to invest in the nation’s infrastructure. But the devil likely will be in the details for both Republicans and Democrats when it comes to funding the plan and deciding what to fund. Beyond any one-time infrastructure investment in 2017 though, will Congress be able to hit the ground running so they can be ready when it comes time to reauthorize the FAST Act transportation authorization bill in 2020?

Issue: State transportation funding efforts could be back in the spotlight in 2017. The list of those that could tackle transportation revenues includes as many as 16 states. Some have been at this for several years and haven’t achieved success due to political challenges. Some have had a task force or special commission in place in 2016 to come up with funding ideas. Plenty of old ideas (gas taxes, registration fees, tolls) are likely to be considered. But mileage-based user fees and other innovations are likely to get a look as well.

After a year in 2015 when eight states raised gas taxes, 2016 saw less activity. New Jersey raised its gas tax by 23 cents and Rhode Island funded a multi-year bridge repair program with a new toll on large commercial trucks and a combination of borrowing and refinancing. But other than those states and a couple of others that approved bond measures for infrastructure projects and the like, most postponed or agreed to extend their transportation revenue discussions into 2017. That means a large number of states could see activity next year on that front. While some have been embroiled in the funding debate for months or years and will continue those conversations, others had a special task force in 2016 to explore revenue ideas and could look to move those ideas forward during the 2017 legislative sessions. Here’s a list of the 14 most likely candidates.

Donald Trump’s surprising win wasn’t the only big story to emerge on Election Day. Voters also had the opportunity to weigh in on a number of important transportation-related ballot measures around the country. Here’s a look at how they fared and an extensive collection of links where you can read more about those measures and the impacts of other election results.

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