Administration and Finance

CSG Midwest
Four state legislatures in the Midwest made major moves on transportation policy this year, adopting increases in motor fuel taxes that in some cases had been left unchanged for more than a decade.
This decision to boost funding for roads and bridges was one of the region’s more notable legislative trends from the past year. Several factors, transportation experts say, caused 2015 to be a breakthrough year for transportation measures — lower gas prices, growing shortfalls in state transportation funds, gubernatorial and legislative leadership, and the support of key business groups.
In this region, the tax hikes on gasoline and diesel fuel have already taken full effect in Iowa and South Dakota. Nebraska’s four year, phase-in plan begins in January, while in Michigan, the state’s new transportation plan won’t be fully implemented until 2021.

Facing continuing uncertainty with regards to federal funding, Tennessee and other states have postponed millions of dollars in transportation projects. But even as a gas tax increase has become a political third rail in Washington, many states have turned to the venerable transportation revenue mechanism this year to advance their transportation programs. This session highlighted both the impact of federal uncertainty and the successes of those states that passed gas tax increases in 2015.

Sponsored by the CSG Transportation and Infrastructure Public Policy Committee
Friday, Dec. 11, 10 a.m. – Noon, Broadway Ballroom AB, 2nd Floor

When Tennessee Department of Transportation Commissioner John Schroer joined Gov. Bill Haslam Nov. 9 for a one-day, five-city trip around the state to highlight Tennessee’s transportation funding challenges, he brought with him two lists. One was a list of 181 backlogged transportation projects totaling more than $6 billion that, at current funding levels, the state won’t be able to complete or get under contract until 2034. The other listed 765 new project needs at a projected cost of $5 billion that the state won’t be able to consider until 2022 at the earliest.

With just hours to spare before the Midnight expiration of road and transit spending, President Obama Friday signed the Fixing America’s Surface Transportation (FAST) Act, a five-year, $305 billion bill paid for with a combination of existing gas tax revenue and $70 billion in offsets from other areas of the federal budget. It calls for spending about $225 billion on highways and $61 billion on transit projects over the next five years. The legislation is the first transportation funding bill lasting longer than two years that Congress has passed since 2005 and delivers some degree of long-term certainty to state transportation officials around the country who have struggled to keep transportation investment afloat through years of mostly short-term extensions. Despite delivering that certainty and a variety of important policy tweaks, there is still plenty to be concerned about for the future of the federal transportation program and the discussion about the next bill has already begun.

On December 3, I had the opportunity to address the Maine Transportation Conference in Augusta, an annual event sponsored by the Maine Better Transportation Association, the Maine Section of the American Society of Civil Engineers and the Maine Department of Transportation. I spoke about state transportation funding activities in 2015. Here’s an edited version of my remarks.

Eight states—Georgia, Idaho, Iowa, Michigan, Nebraska, South Dakota, Utah and Washington—raised their gas taxes in 2015. Two other states—Kentucky and North Carolina—made adjustments to their gas tax mechanisms to make revenues more reliable. The state of Delaware meanwhile enacted legislation to raise several vehicle and license fees in order to fund road repair and maintenance. And states such as Maine and Texas approved ballot measures that will result in more money going to transportation. All that activity surpassed 2013 when six states produced major transportation revenue packages. But despite all that activity and despite the fact that 2015 could see Congress approve a new long-term federal transportation bill, 2016 also could see a large number of states join the club, particularly if many of those states that have come close in recent years or have had processes in place to examine revenue options end up moving forward. Here’s a roundup of the states to watch in transportation funding next year and some additional resources where you can read more.

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.

While 2015 may be an off-year for elections in most states, it has the potential to be an important one for transportation in a variety of places. Here’s a roundup of how transportation is factoring into this year’s key state contests and ballot measures.

In case you missed it, I have a new Capitol Research brief out this week on the role of Metropolitan Planning Organizations in transportation planning. That makes it as good a time as any to catch up on a number of recent stories at the intersection of planning and project selection (project selection was one of my Top 5 Issues for 2015, regular readers will recall). I have items on a recent report on congestion and mobility around the nation’s cities, light rail and streetcar projects around the country, the ongoing debate about building new roads versus fixing old ones, how one state is seeking to prioritize transportation projects based on return on investment, and how the preferences of millennials are likely to shape transportation in the years ahead. 

The federal reimbursement rate in 2015 is 57.5 cents per mile, up 1.5 cents per mile over the 2014 rate and up 17 cents over the rate ten years before–37.5 cents per mile on Jan. 1, 2005. Thirty-three states have a reimbursement rate that is the same as the federal rate. For those 17 states whose rates differ from the federal rate, reimbursement rates range from 31 cents to 57 cents per mile. No state reimburses at a rate higher than the federal rate.

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