States Continue Search for Transportation Funding Solutions

In a recent Capitol Research policy brief, we focused on “Transportation Funding Commissions” empaneled in four states last year to come up with solutions to significant infrastructure funding shortfalls. I have updates on three of those states below along with an item on another state that is just beginning such a process. Plus, an update on Oregon’s continuing quest to come up with a viable vehicle miles traveled fee system and links to other recent news of note and key transportation reports.

  • Georgia: The Atlanta Journal-Constitution reported recently on whether projects funded by a proposed regional sales tax increase will reduce commute times for Atlanta region commuters. Voters will decide July 31st whether to approve a penny sales tax increase in Metro Atlanta and 11 other regions around the state. The AJC’s article highlights the work of the Atlanta Regional Commission’s traffic-simulation computers, which have offered a prediction of how the referendum’s $6.14 billion project list is likely to change Atlantans’ commutes.
  • Iowa: The State Smart Transportation Initiative hosted a webinar the other day that looked at how to build public support to fund transportation system preservation work. The webinar included a presentation by Beth Kanter, a Vice President at Spitfire Strategies, a consulting firm that recently worked with the Iowa Department of Transportation on a series of public meetings to gather public input on the condition of the state’s transportation system, the importance of roads to Iowans and how to pay for their upkeep and improvement. The public meetings were part of the process involved with a Citizen Advisory Commission appointed by Gov. Terry Branstad, which issued its findings in a December 2011 report. Iowa’s commission process is one of four detailed in my recent Capitol Research policy brief on “Transportation Funding Commissions.” Kanter said the biggest findings of Spitfire Strategies’ research in Iowa were that the problem (the poor condition of state roads) was more visible and recognizable to Iowans than the solutions (including funding options). They also found that economic growth messages about the importance of repair and maintenance resonated most strongly among the public. The group developed talking points to highlight the economic impact of insufficient transportation funding. These emphasized things like the threat of poor roadways to the state’s agriculture and trucking industries and to future economic development. Kanter and her organization note that although a gas tax increase failed to win passage in the legislature this year, the Iowa DOT (armed with Spitfire’s research and talking points) was able to secure a 50 percent increase in funding for system preservation projects from the Iowa Transportation Commission. You can also read a white paper on Spitfire’s research here.    
  • Ohio: Ohio Department of Transportation officials recently highlighted cost cutting and revenue generating ideas the agency is pursuing to fill a $1.6 billion transportation funding shortfall. They include: efforts to improve agency efficiency, the conversion of certain non-interstate rest areas to service areas, the sale of advertising and sponsorship rights at interstate rest areas, tapping the revenue potential of the Ohio Turnpike, seeking sponsorship and naming rights for certain state-owned assets, and exploring public-private partnerships that could expedite construction of some projects.
  • Oregon: The Albany (Oregon) Democrat-Herald reported recently that the Oregon Department of Transportation is still hard at work developing a method of collecting fees based on vehicle miles traveled as a potential successor to the gas tax. The test of a GPS-based system for tracking mileage in 2006 was successful but raised concerns among some about the potential for government surveillance and violations of privacy. Jim Whitty, the staff director of the department’s Road User Task Force, tells the newspaper the approach is now completely different. “We’re moving away from a mandate for a government box in your car, and from GPS,” he said. “What we’ve done is taken a hard look at what we need and also that the public needs to accept it.” Whitty’s task force is looking at various electronic systems for measuring and reporting mileage that may already exist and may even be in use in the private sector, for example by auto manufacturers, auto insurance companies and cell phone providers. The department’s new approach could result in the designation of several methods to keep track of mileage, allowing drivers to choose the one they’re most comfortable with.
  • Pennsylvania: The (Lehigh Valley) Morning Call reported recently that business leaders are calling on the administration of Gov. Tom Corbett to come up with a long-term solution to the state’s transportation funding needs. Corbett has been criticized for failing to act on the recommendations of his Transportation Funding Advisory Commission (also highlighted in my recent brief). The article said lawmakers and the administration could tackle the transportation funding issue if they come to an agreement on the 2012-13 state budget before a June 30th deadline or it could be the subject of a special legislative session this fall.
  • Puerto Rico: In my blog post earlier this week about public-private partnerships, I wrote about Puerto Rico’s plans for a P3 deal at San Juan’s Luiz Munoz Marin Airport. Well just in time for other jurisdictions that may be thinking about following suit, the Transportation Research Board’s Airport Cooperative Program has a new report out called “Considering and Evaluating Airport Privatization.” It includes an assessment of various privatization models and strategies as well as case studies from around the country.
  • Washington: Another state featured in our “Transportation Funding Commissions” brief is Washington, where Gov. Chris Gregoire has said major funding is needed for transportation going forward. Now transportation funding has become a hot issue in the campaign between the two men hoping to succeed her, the Associated Press reported last week. The Republican candidate, Attorney General Rob McKenna, has said the state will need to consider a tax package to address the state’s transportation needs. His Democratic opponent, former Congressman Jay Inslee, says a decision on whether to send voters a transportation tax package would be “dependent upon economic conditions and the rate of recovery of the state economy.” Both McKenna and Inslee say more tolling will likely be part of the equation for Washington, at least as far as some transportation projects are concerned.
  • Wyoming: A 28-member legislative super-committee will spend the next few months trying to come up with a long-term transportation funding solution. The state faces a nearly $135 million annual budget shortfall to fund highways. A recent Wyoming Tribune Eagle article looks at how the shortfall happened. Among the factors: Wyoming has gone 14 years without a fuel tax increase (several attempts to raise it have been shot down) and at 14-cents-a-gallon, the state’s tax is the second lowest in the nation. Also, construction inflation in the middle part of the last decade created a construction backlog. Top legislators from both parties now say they are committed to finding a new funding source for highways.

Other Resources and Recent Reports

  • The Government Accountability Office has issued a report entitled “Highway Infrastructure: Federal-State Partnership Produces Benefits and Poses Oversight Risks.” The report said the Federal Highway Administration (FHWA) benefits from its relationship with the states in advancing the federal-aid highway program and conducting program oversight. FHWA’s partnership with states could help facilitate a transition to a more performance-based highway program. “FHWA could provide technical assistance to help states develop performance goals and targets and establish data collection methodologies to evaluate and track their progress,” the report said. But the agency would need to mitigate risks posed by its partnership with states to ensure that corrective action was effective when needed. The report noted cases where FHWA was lax in its oversight or reluctant to take corrective action to bring states back into compliance with federal requirements. The agency has shown a lack of independence in decisions as well, putting its partners’ (the states’) interests above federal interests.
  • The history and future of the state-federal partnership on transportation was the focus of one of the presentations at our recent National Leadership Conference in La Quinta, California. Brian D. Taylor, Ph.D., of UCLA’s Institute of Transportation Studies told members of the CSG Transportation Policy Task Force that century-old partnership is crumbling amidst increasingly bitter partisan disagreements over the benefits of taxing to build, operate and maintain infrastructure and the appropriate level of government to do those things. Taylor said we’re in an era in which the state role in transportation has declined relative to the role of metropolitan planning organizations. The use of bonded indebtedness and general taxes to fund transportation—two mechanisms once dismissed as inefficient and inequitable—have returned to the forefront for states as officials have found increasing user fees (i.e. gas taxes) a political non-starter. You can view Taylor’s presentation to the task force (with or without audio) on the CSG Knowledge Center or check out the detailed Meeting Minutes summary from the session.
  • The Transportation Research Board’s (TRB) National Cooperative Highway Research Program has a two volume report just out on “Estimating Life Expectancies of Highway Assets” (see here and here). Many believe that having the ability to measure and predict the life cycle of roads more accurately can help policymakers and others as they do long-term planning, track performance, and as they try to justify funding for preventive maintenance and account for future facility replacements in overall project costs.