Is 2013 the Year of New Transportation Funding?
Several states are signaling their willingness to pursue higher fees and taxes to fund roads, rails and bridges.
The 2013 legislative session hasn't even started, but state lawmakers across the country are already touting the need to find new sources of transportation revenue in the upcoming year. The conversation comes at a time when Congress finds itself entrenched in a culture of austerity and when calls from advocates and stakeholders to increase the federal gas tax -- unchanged for nearly 20 years -- have fallen mostly on deaf ears.
"If we hope that Congress will solve the transportation funding questions in our nation, they won't," said Oregon state Sen. Bruce Starr at the National Conference of State Legislatures' (NCSL) meeting in Washington this month. Starr has been one of the leading advocates for a pilot program in his state that analyzes the feasibility of establishing a vehicle-miles traveled fee, or VMT, which is seen as a more financially sustainable alternative to the gas tax.
In recent years, states have embraced legislation that encourages financing mechanisms like public-private partnerships. But they have been a bit slower to pursue higher fees and taxes, which would address underlying revenue shortfalls. Fourteen states haven't raised their gas tax in 20 years, according to NCSL, and only eight state legislatures along with Washington, D.C., have raised gas taxes since 2008. Just five states index their gas tax to inflation, meaning most states' gas taxes are, to some degree, facing the same fundamental challenges as the federal gas tax.
"We've got to sell this to the public, the fact that there is a need," said West Virginia state Sen. Bob Plymale, who last year sponsored legislation -- eventually vetoed by the governor -- that would have raised DMV fees in order to generate about $40 million annually for road funding.
But attitudes may be changing, as state lawmakers of all political stripes seem to be showing that they're willing to tackle the transportation revenue question:
- Pennsylvania lawmakers are reportedly considering a plan to remove a cap on the taxes paid by gas stations that could generate more than $1 billion annually.
- A governor's task force in Minnesota has recently released a report advocating for higher gas taxes, vehicle fees and local sales tax. Political shifts in the state could give some of those proposals legs.
- Texas lawmakers have discussed new revenue options for transportation, such as dedicating vehicle sales taxes to roads and increasing vehicle registration fees.
- Massachusetts Gov. Deval Patrick will soon reveal a plan to help close the state's transportation funding shortfalls, but so far he's been reluctant to discuss specifies. His previous attempt at raising the gas tax didn't gain traction.
- Wisconsin Gov. Scott Walker -- who opposes a gas tax increase -- has said he's reluctant to pursue tolling but it's still an option as he seeks to pursue infrastructure investment
- Virginia Gov. Bob McDonnell will reportedly soon send Virginia lawmakers a plan to generate $500 million annually for transportation projects, but he didn't reveal how that will happen. He's previously discussed indexing the gas tax. A series of budget amendments he proposed this month would direct $48 million in state sales tax to roads, but it did not include the $500 million plan.
- A proposal in Wyoming to increase gas taxes and vehicle registration fees is gaining steam. Gov. Matt Mead supports a fuel tax increase but doesn't support increasing vehicle registration fees.
Will any of those measures actually become reality? We'll see. In the meantime, there does seem to be a growing recognition of the country's infrastructure needs, and the new buzzwords in transportation circles describing the lack of sustainable funding methods are "infrastructure fiscal cliff."
But there's no shortage of solutions: State and federal lawmakers know exactly how much funding they need to maintain existing infrastructure and build new projects to meet their growth projections. In fact, there's a whole cottage industry of advocates, stakeholders and policy wonks developing countless white papers and proposals documenting what work must be done, and importantly, how to pay for it. In short, no lawmaker can say with a straight face that it's unclear how to pay for infrastructure. "It's not a technical problem," said Joung Lee, the American Association of State Highway and Transportation Officials' (AASHTO) associate director for finance and business development "It's a political problem. There's no question about it."
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