Next week (May 18-20), The Council of State Governments will host a group of 10 state legislators from around the country at the 6th Annual CSG Transportation Leaders Policy Academy in Washington, D.C. As part of the academy, attendees will take part in activities around Infrastructure Week, a national week of events, media coverage, and education and advocacy efforts to elevate infrastructure as a critical issue. I have more about the academy and Infrastructure Week below as well as details about another key event CSG is involved with happening next month.

Lawmakers in Kentucky and Tennessee have considered bills this session that would allow the states to enter into public-private partnerships (P3s) to enable transportation projects. But both would place limitations on what kinds of projects could be undertaken. I also have a variety of updates on P3s and tolling from around the country as well as details on how you can attend this summer’s most essential forum on the state of the P3 industry.

On page 723 of the $305 billion, five-year federal surface transportation legislation approved by Congress last year is a $95 million grant program that some believe could help determine whether there will ever be another long-term transportation bill and that appears likely to put states at the forefront of determining the future of transportation funding. Section 6020 of the Fixing America’s Surface Transportation--or FAST--Act requires the U.S. secretary of transportation to set up a program to “provide grants to states to demonstrate user-based alternative revenue mechanisms that utilize a user fee structure to maintain the long-term solvency of the Highway Trust Fund.” Although the language was left intentionally vague, the program is being viewed as a way to further explore the possibilities of the mileage-based user fee concept being pioneered by Oregon and other states.

During a recent CSG eCademy webcast, “States to Watch in 2016: Transportation Funding,” transportation policy experts made some predictions about upcoming transportation funding issues, and possible solutions, in the states. Joe McAndrew, policy director at Transportation for America, said 23 states have approved plans to raise transportation revenue since 2012. In 2015, eight states passed gas tax increases while other states considered tolling changes and other revenue options. But, according to McAndrew and other presenters, 2016 could be a slow year for major transportation funding initiatives.

Eight states passed gas tax increases in 2015, while a variety of others took other actions to shore up transportation revenues. But 2016 could also see a large number of states join the club even after Congress approved a federal surface transportation bill late last year. At least seven states appear poised to consider gas tax increases. Others are actively exploring tolling or other revenue options. During this annual CSG eCademy session, transportation experts, state house and political beat reporters discuss how transportation funding might fare in 2016 legislative sessions across the country.

Democratic leaders in the Maryland General Assembly have introduced legislation (SB 908) being viewed as an effort to restrict the power of the governor to decide which transportation projects to fund. The legislation comes in the wake of Gov. Larry Hogan’s decision last summer to cancel a long-in-the-works plan for a light rail project in Baltimore. But Maryland may also be looking to follow in the footsteps of several states, including neighboring Virginia, that have taken a close look at their project selection processes in recent years as a means to increase transparency, improve accountability and shore up the public trust that scarce transportation dollars are being spent wisely.

Rhode Island Gov. Gina Raimondo last week signed legislation to fund a multi-year bridge repair program with a new toll on large commercial trucks and a combination of borrowing and refinancing. Rhode Island, which ranks 50th out of 50 states in overall bridge conditions, has been one of the only northeast states that does not charge  commercial trucks a user fee. There is also a variety of other tolling-related news from around the country as well as updates on the states to watch on transportation funding this year. Plus details on how you can join us for next week’s CSG eCademy webinar on the subject.

CSG Midwest
Governors in two Midwestern states are asking legislators to consider using a new source for funding transportation projects — state budget reserves.
In Nebraska, Gov. Pete Ricketts has proposed creation of a transportation infrastructure bank to accelerate the completion of highway repairs, fix county bridges, and fund projects that help new or expanding businesses. Under LB 960, up to $150 million in cash reserves would be transferred to the infrastructure bank. According to theAmerican Association of State Highway and Transportation Officials, Nebraska is one of four Midwestern states (along with Iowa, North Dakota and South Dakota) that relies entirely on a “pay as you go” model for transportation funding (no bonding).

The New York Times says that the oil industry is in its “deepest downturn since the 1990s, if not earlier”. The price of a barrel of oil has plummeted, falling more 70 percent since mid-2014, and gas prices at the pump have followed – falling from $2.21 one year ago to $1.70 today (AAA). Unfortunately, a drop in energy prices means a headache for several states that rely heavily on severance taxes for revenue.

A majority of states (35) impose at least one form of severance tax, which is a tax on natural resource extraction. While overall severance taxes don’t make up a large percentage of total state taxes collected – 2.1 percent in 2014 – they have very different impacts across the states. For example, in 2014 severance taxes collected ranged from 72 percent of total tax revenue in Alaska and 54 percent of revenue in North Dakota to less than 1 percent in 18 states. In seven states, severance taxes make up 10 percent or more of total tax collections. 

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