The Road Funding Policy That Doesn't Improve Roads Much
Voters in red and blue states like them. But historically, transportation "lockboxes" do little to address transportation problems.
Connecticut voters in November will get a chance to make sure the tax money they thought was supposed to build and fix roads and other transportation projects is actually used for that purpose.
In doing so, they would join a growing number of states where voters have added "lockbox" amendments to their constitutions to safeguard road money. These measures almost always pass, whether it's red- or blue-state voters weighing in.
Transportation advocates and many public officials hope the amendments can also make it easier, politically, for lawmakers to find more money for transportation projects down the road by raising fuel taxes or imposing tolls.
"The constitutional lockbox is a critical step not just toward ensuring that money collected for transportation is actually spent exclusively on transportation but also an important milestone in reversing decades of neglect to our state’s infrastructure needs," said outgoing Gov. Dannel Malloy, a Democrat, who has championed the measure for years, in an email statement.
But while these amendments protect existing transportation funding, they have historically been less successful in persuading lawmakers to raise more money later to address long-term infrastructure needs. In several of the states where lockbox measures have passed, there are political obstacles to raising taxes and fees for transportation projects. Voters are more likely, after all, to notice that the price of their gas went up than that the gas taxes they paid were actually used for something else.
Unlike Connecticut's measure, California's lockbox measure came as part of a larger infrastructure deal. But its experience shows that lockboxes alone aren't typically enough to quell voter concerns about new taxes. This June, California voters approved a transportation lockbox measure pushed by state Sen. Josh Newman, a Democrat. But on the same day, voters in Newman’s district recalled him, upset about the gas tax hike that came as part of last year’s $54 billion infrastructure package.
Now, a Republican-led effort may unravel the entire package by rolling back the unpopular gas tax hikes. Voters will decide the fate of the gas tax in November.
Wisconsin passed a lockbox measure four years ago. Republican Gov. Scott Walker had repeatedly criticized his predecessor for taking transportation money to fill holes in the state’s budget in other areas. But since voters approved the new protections, Walker has essentially stymied every effort to raise new transportation money, even though it’s meant pulling the plug on major interstate improvements in Milwaukee.
"Every state has its own political dynamics, but here in Wisconsin, it was important to take away the narrative that the money would be diverted," says Craig Thompson, executive director of the Transportation Development Association of Wisconsin, which backed both the lockbox measure and efforts to find more road money. "But in the short-term, it hasn’t led to any additional funding."
Some of the lockbox states have chronic financial problems in addition to their neglected roads.
Voters in Illinois, which has a $7.6 billion backlog in unpaid bills and credit ratings perilously close to junk bond status, approved a lockbox measure in 2016 after road builders complained that the financially beleaguered state used $6 billion of transportation money to boost its budgets over the course of the decade. Taking that money away made it harder for the state to meet its transportation needs, especially since the last time Illinois raised its fuel tax was more than 28 years ago.
But the task of finding new money for transportation or anything else at the state capitol in Springfield is daunting, considering Illinois’ dismal political shape. So for now, the road builders are trying to make sure lawmakers don’t try to get around the new amendment by using the safeguarded transportation money for expenses that were once paid for with general funds.
Louisiana has gone just as long as Illinois without raising its gas tax, and lawmakers have struggled in recent years to find money for new transportation projects -- like a new bridge over the Mississippi River in Baton Rouge. Legislators did propose a constitutional amendment, which voters approved last year, to close loopholes in the state’s previous lockbox scheme. This year, lawmakers had their hands full simply passing Louisiana's annual budget because they had to fill a shortfall that occurred when several one-time tax increases expired.
In Connecticut, the legislative fight over the lockbox is wrapped up with the debate over new transportation funds, especially because the governor has raised the prospect of imposing tolls in the state for the first time in decades.
Gov. Malloy has been pushing for new infrastructure spending for years, and others, including Republicans, have floated plans too. But no mix of tolls, higher fees, gas tax hikes or expanded bonding capacity has been able to gain traction in Hartford. (Connecticut actually lowered its gas taxes in the late 1990s.)
With no solution in sight, Malloy’s administration abruptly put the brakes on $4.3 billion of roadwork in January. His administration also announced it would have to raise fares and cut service on Metro North, the commuter railroad that feeds into New York City. Lawmakers found a short-term fix this year to avoid those immediate crises, but they still loom large.
Meanwhile, Connecticut’s finances are deteriorating along with its roads. Its economy has stalled since the Great Recession, and lawmakers have struggled to balance its budget. Republicans in the legislature calculated that, between 2011 and 2017, the state diverted more than $500 million of sales tax revenue that was intended to fund transportation projects and instead used it for the state's operating expenses. (The governor's office disputes the Republican numbers, saying the actual number is less than $90 million and that the diversion of funds only affected the 2016 and 2017 fiscal years. And, his office notes, Malloy also pushed for the 2016 sales tax hike to benefit transportation in the first place.)
Republicans, however, worry that the lockbox measure isn’t strict enough and would allow lawmakers to get around them.
“It’s not nearly as strong as it could be or should be,” says Pat O’Neil, a spokesman for the House Republican caucus there. “They say it’s a lockbox, but there’s a trap door in the bottom. It’s not airtight.”
Connecticut voters, he says, have reason to be skeptical that a constitutional amendment will correct bad spending habits at the capitol: Spending caps approved by voters in 1992 didn’t fully go into effect until this year. And even if the lockbox measure passes (as most have in other states), finding money at the state capitol to fix Connecticut’s roads will probably be just as difficult with the protections in place.
This story has been updated.