July | August 2017







Leadership, Federal Uncertainty, Past Failures Among Keys to State Transportation Funding Successes

By Sean Slone, CSG Director of Transportation & Infrastructure Policy
Iowa lawmakers this February passed the first gas tax increase in the state in more than 25 years, something that had eluded them in recent legislative sessions. Senate Transportation Committee Chairman Tod Bowman said one important thing was different in 2015.
“Our governor (Terry Branstad) stepped up to the plate this year,” Bowman said. “And he at least opened the door pretty widely saying, ‘We need to address this issue, I’m willing to be involved in this and if that means increasing the fuel tax, I’ll consider all options.’”
In Georgia, where the legislature approved a transportation funding bill in late March, Gov. Nathan Deal played a somewhat different but no less essential role, said House Transportation Committee Chairman Jay Roberts.
“I can tell you that he did weigh in,” said Roberts. “I think that the governor is one of these (people) that allows for the legislative process to work, … but did not want to be the one that was trying to get out and dictate to the legislature what they should or shouldn’t do.”
Iowa and Georgia are two of five states where the legislature has approved a major transportation funding package so far this year. Others still could follow suit as the year progresses, but already the number rivals 2013, when six states approved significant funding measures. Idaho became the most recent state to join the club when its legislature approved a transportation funding compromise with a 7 cents per gallon gas tax increase just before adjourning for the year on April 11. South Dakota and Utah also raised their gas taxes this year.
While each of the five states faced their own challenges and came up with their own solutions, there were plenty of common factors—in addition to the role played by the chief executive—that made their legislative successes possible.
Federal Uncertainty
One of those factors was lingering uncertainty about what’s going to happen at the federal level. Congress faces a May 31 deadline when an extension of the 2012 surface transportation authorization bill known as MAP-21 is set to expire and the Highway Trust Fund is once again set to run low on funds for state transportation projects around the country. Many analysts aren’t hopeful Congress can come up with a long-term, sustainable solution in time and some of the talk on Capitol Hill already has turned to another short-term extension—something troubling for states that must sign off on projects that can take years to complete.
Roberts said that uncertainty may have been on the minds of lawmakers in passing Georgia’s House Bill 170, which converted a sales tax on motor fuel to a per-gallon excise tax and imposed truck impact fees based on weight, a $5 fee for hotel and motel stays, and annual fees for electric vehicle drivers.
“The fact that (the extension of MAP-21) is only through May and we don’t have any idea what’s going to happen after May, whether they’re going to renew it or they’re going to put money with it, I think that did play a role,” Roberts said.
Bowman agreed.
“It just made it even easier (to pass the gas tax increase in Iowa) knowing that the federal government is unlikely to do anything to help the cause, therefore states have to pick up the slack,” he said.
Learning from Past Failures
As has happened frequently in recent years, states that ultimately were successful in passing transportation funding measures had seen notable failures in preceding years. Iowa and Idaho, for example, had both talked about raising gas taxes in recent years, but lawmakers had been unable to get anything across the finish line.
In 2012, Georgia legislators asked voters to approve a 1 percent sales tax increase to fund lists of regionally selected transportation projects in 12 specially created districts. It failed in all but three, even after state officials told voters there was no “plan B” for funding the state’s transportation needs.
“The project list that was put together (in) several of the regions was not attractive to the voters, in all honesty,” said Roberts, who in addition to writing the 2015 funding bill, also authored the legislation to set the 2012 sales tax referendum vote in motion. “But, I will say this: those regions that passed it tout the success of it, how much it’s doing for them and how great it is for them now.”
With this year’s transportation package, lawmakers made sure there would be no Election Day disappointment.
“Some of the people argued last time, ‘You all (the legislature) should have just went on and done it yourselves (passed a tax increase) and not put it before the people,’” he said. “So this time we went on and did it ourselves.”
Seeking Sustainable Futures
State leaders in Iowa say the gas tax increase will be able to generate the $215 million transportation officials say is needed annually to address critical road and bridge improvements. But Bowman believes that with factors like the proliferation of electric vehicles on the horizon, it won’t be long until the state finds itself addressing transportation funding again.
“We’re going to have to … continue to look at ways we’re going to fund our roads and bridges in the future, because I don’t think we can continue to go down the path that we are,” he said.
In Georgia, the jury is still out on how far this year’s transportation funding measure can take them.
Roberts said the measure, which is expected to generate more than $900 million more annually for transportation, is a step in the right direction.
But The Atlanta Journal-Constitution noted recently that while that may be enough to allow the state to address a backlog of road and bridge maintenance, it’s not going to be enough to fund big ticket interstate widening or transit projects that could be effective in alleviating congestion in the Atlanta area.
“As we’ve said all along, if we wanted a shiny new swimming pool and the gazebo, we need to look at about $5 billion more a year in order to get that,” Roberts said. “But we’re not going to get there. We’ve got to be realistic. We’ve got to take care of our maintenance needs.”

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