States Finding Their Own Transportation Funding Solutions
Congress is wrestling to pass legislation to restore funding to the Highway Trust Fund so numerous proposals are being pushed, lobbying is at fever peak and dire warnings are being issued across the country. The concern in the states is valid; in the Iowa Transportation Commission’s 5-year transportation plan, approved earlier this year, the DOT warned in a “Dear Iowans” letter that without funding being reauthorized, improvement projects could come to a halt. Other states are issuing similar warnings.
Many states and local municipalities are taking action to make sure they can augment federal funds so that vital transportation infrastructure projects are not being delayed or cancelled.
Surveys by the National Council of State Legislatures, American Association of State Highway Transportation Officials (AASHTO) and the American Road and Builders Association (ARTBA) have documented transportation-related revenue initiatives in 26 states since 2013.
Solutions at a State Level
Texas is a good example of a state focusing on its transportation infrastructure. Local officials generally wary of raising taxes believe there may be no alternative as new residents flock to Texas for job opportunities and a lower cost of living. The Texas Transportation Funding Amendment is on the Nov. 4 general election ballot as a legislatively-referred constitutional amendment. The measure would divert $1.2 billion a year in oil and gas taxes paid by drilling companies from the Rainy Day Fund and put it towards transportation funding for repairs and maintenance.
Missouri is taking similar action. The Missouri Temporary Sales Tax Increase for Transportation, Amendment 7 is on the August 5, 2014 primary election ballot. The measure, upon voter approval, would impose a temporary 0.75 percent increase on the state sales and use tax to fund transportation projects. The duration of the tax would be no more than 10 years
Illinois + Indiana
Another way in which states are seeking to reduce their dependence on federal assistance is by entering into public-private partnerships (P3). Taking the P3 route, Illinois and Indiana are working on a P3 plan to help build the 47-mile Illiana Expressway. Illinois Department of Transportation Secretary Ann Schneider recently said that relying on private investors means the road will be built and open much sooner than if only state funds were used. That, in turn, will get heavy trucks off local roads sooner and save the states maintenance costs for roads that now take a beating. Local governments are also partnering with States to fund important projects. In Texas a recent San Antonio initiative will contribute local vehicle registration funds in a collaborative effort with TxDOT to help pay for a portion of $800 million in improvements to I-10, US 281 and Loop 1604.
The project is being implemented as a public-private partnership between FDOT and a private concessionaire to design, build, finance, operate, and maintain the roadway for a 35-year agreement term. FDOT will provide management oversight of the contract; will install, test, operate and maintain all tolling equipment for the express lanes; and will set the toll rates and retain the toll revenue.
Viriginia + DOC + Minnesota
Yet another idea is changing the taxes that raise revenue for road projects. Virginia and the District of Columbia both replaced their per-gallon gas tax with a wholesale sales tax on gasoline. After legislators decided against raising gas taxes in Minnesota, DOT officials there are watching closely an Oregon test that will see up to 5,000 volunteer motorists pay 1.5 cents for each mile they drive on state roads and receive a refund for the gasoline taxes they now pay at the pump. According to MnDOT, the average Minnesotan drives 15,000 miles a year and gets 21 miles to a gallon of gasoline. At 28.5 cents a gallon, this driver pays $203 a year to use state roads.
Local officials know the importance of good roads and infrastructure and are taking the necessary steps to make sure the needs of their constituents are being met.
HR Green staff is experienced with projects ranging from municipal work to multi-million dollar roadway reconstruction and new roadway projects. HR Green offers a full range of support services to help your project run smoothly and efficiently from start to finish including identifying funding options and securing funding for projects.