Highway Funds Are Hard to Find
Private investment opportunities may figure in the future of U.S. transportation infrastructure for many states, but not others. Uncertainty about federal investment looms largest of all.
“I’ll be the first to call BS,” said John Schroer, Tennessee Dept. of Transportation commissioner, referring to the current administration’s oft-quoted promise to bring $1 trillion in infrastructure investment, mostly through private funding. Speaking on a panel at the Transportation Research Board’s annual meeting this month, he noted that his state has no P3 legislation and added, “We are concerned about the trust fund becoming insolvent.”
While many states have responded to the federal funding uncertainty by passing ballot initiatives that increase fuel or sales taxes for transportation, other states face public reluctance to do the same. “We have the lowest fuel tax in the country, except for Alaska,” said Mike Patterson, executive director of the Oklahoma Dept. of Transportation.
The Missouri Dept. of Transportation is trying to address similar voter resistance. “We have created a transportation funding calculator that shows you how much you pay for a month of driving and where does the money go,” said Patrick McKenna, MoDOT director. “People are surprised at how little they actually pay for transportation.”
Jennifer Cohen, Delaware Dept. of Transportation secretary, noted that, while an attempt to increase the fuel tax by 10¢ failed in 2015, voters did agree to a revenue package that included funding transportation projects with any DMV fees associated with late renewals and other penalties—in other words, transportation would be partly funded through fees that could be avoided.
Texas has enacted legislation that doesn’t include fuel-tax increases, observed James Bass, Texas Dept. of Transportation executive director. Sales-tax revenues after the first $28 billion will fund highways up to $2.5 billion; starting in FY20, after the initial $5 billion from vehicle sales and rentals goes to the general fund, 35% of the subsequent revenue will go to highway infrastructure.
Tennessee passed a fuel-tax increase to help address $10 billion in highway needs, but it came with decreased taxes on groceries, noted Schroer, adding, “It’s the largest tax cut bill in history, yet it barely passed.”