July | August 2017


States Wary About Transportation Investment

By Sean Slone, CSG Program Manager,
Transportation Policy
In October, Tennessee Transportation Commissioner John Schroer announced in a letter to state lawmakers he was delaying $400 million in road projects until the 2016 fiscal year. The reason—uncertainty about the future of federal transportation funding.
“We’re just playing it conservative as the state of Tennessee does,” Schroer said. “We’re making sure that we’re in a good cash position and that we’re managing the dollars the way we think is appropriate.”
Many believe the current federal approach makes it difficult for state officials to do long-term planning and is doing damage to the nation’s transportation system.
Congress last summer approved an extension of 2012’s MAP-21 surface transportation legislation and patched up the depleted federal Highway Trust Fund with a $10.8 billion infusion from the general fund. That infusion is expected to allow states to reimburse contractors for work on construction projects through May, just as the road construction season begins in many states. But the long-term transportation bills that once defined the federal program have been hard to come by in recent years. That has left states struggling to predict what the future holds, to schedule long-term projects and to do long-range planning.
While other states can issue bonds to continue to fund projects through periods of uncertainty, Tennessee is a non-debt, pay-as-you-go state, Schroer said.
“The problem is if we keep pushing projects back and (Congress keeps) doing short-term extensions, then our ability to commit long-term dollars to projects that might cause economic stimulus around the state is going to be more and more difficult,” he said.
The Volunteer State is not alone. State transportation leaders in Louisiana said last fall that while their budget for the 2015-16 fiscal year is nearly $650 million, the state has more than $12 billion in unmet transportation needs.
Nationwide, Congress’ short-term approach and resulting project delays appear to be having an impact, many believe.
“I do sense, whether it’s (from) local chambers of commerce or (metropolitan planning organizations), that there’s a growing recognition that the accumulation of short-term measures are doing damage to our system,” U.S. Secretary of Transportation Anthony Foxx told The Hill newspaper in October.
A report last fall from Duke University’s Center on Globalization, Governance and Competitiveness found that Washington’s piecemeal approach to investing in transportation infrastructure is costing the United States more than 900,000 jobs and making the country less competitive than its top trading partners.
It will be up to the new Congress to decide whether long-term certainty can once again be a hallmark of the federal program.
Last year, U.S. Sen. Bob Corker of Tennessee was one of those who introduced a bipartisan proposal to increase the federal gas tax and index it to inflation. There is also no shortage of other revenue options should Congress choose to go down that road. In October, the American Association of State Highway and Transportation Officials released a list of some three dozen options for Congress to consider. Another proposal, however, offered last year by Sen.Mike Lee of Utah and Congressman Tom Graves of Georgia, would phase out the gas tax over time and give states much of the responsibility for raising and spending transportation revenues.
But Schroer thinks it would be a mistake for the federal government essentially to get out of the transportation business.
“We’ve got to have some kind of consistent funding where we know it’s there and how they raise the dollars is really up to them,” he said. “It’s my job to spend it; it’s their job to raise it.”