July | August 2017


 

 

 

 

 

 

Transportation Funding Activity Expected to Increase in 2017 Legislative Sessions

By Shawntaye Hopkins, CSG communications associate
The experts who discussed transportation funding during a recent CSG eCademy webcast,  “States to Watch in 2017: Transportation Funding,” said more activity will likely occur in the area this year, following a slowdown in bills introduced and enacted during the election year.
By early February, 15 states had introduced 33 transportation funding bills in 2017—including more than a dozen bills with a gas tax increase; one “lockbox” measure, which prevents state governments from diverting revenue meant for transportation to other budget needs; three one-time funding bills; five bills that include non-fuel recurring funding; and five bills that allow local governments to raise their own revenue.
Alison Premo Black, senior vice president and chief economist for the American Road and Transportation Builders Association, said Republicans sponsored 18 of the bills, Democrats sponsored 11 of the bills, an independent sponsored one bill and three were introduced by bipartisan measures. Black said the activity so far in 2017 seems on pace with 2015.
In 2016, states introduced 93 transportation bills. Black said more bills were introduced in 2015 but “that is not surprising.” There wasn’t as much activity in 2016 because of the election year and shorter legislative sessions.
Gas tax rates have not changed for years, and even decades, in some states, she said. In 2016, one state—New Jersey—passed a gas tax increase.
“You have a lot of pent-up demand after the recession and a big drop in highway work after 2008, and then you have the uncertainty over the federal aid program,” Black said. “Congress has passed a series of short-term extensions…so states really haven’t had the certainty for a large chunk of their programs.”
The Moving Ahead for Progress in the 21st Century, or MAP-21, Act provided two years of funding for surface transportation, and the five-year Fixing America’s Surface Transportation, or FAST, Act does not provide significant resources for growth in the highway and bridge construction market, Black said.
“It really comes down to state and local governments to provide some of that funding and to provide that real growth,” she said.
Kaitlin Lange, a statehouse reporter for the Evansville (Ind.) Courier & Press, said Indiana is attempting to raise about $1.2 billion annually to fix existing roads and build new roads.
“Most lawmakers on all sides are in support of funding road legislation in some capacity,” Lange said. “Right now, it’s just a matter of how to do that.”
One plan would increase the gas tax by 10 cents in the first year, and it would continue to increase with inflation but with a 1-cent maximum increase each year. Another plan would establish a $15 yearly registration fee on all motor vehicles and a $150 yearly registration fee for electric vehicles. In addition, part of the gas tax in Indiana goes into the general fund, but lawmakers are looking at ending that practice over the next four years so that all the money goes toward roads in the state.
A possible gas tax increase has been a hot topic of discussion in New Mexico for several years, said Andy Lyman, a reporter for the New Mexico Political Report. The state has had a 17-cent gas tax for about 20 years. Lyman said the governor is opposed to a gas tax increase and would prefer to find cuts in other areas for roads. Another proposal would allow local governments and municipalities to put a gas tax increase on the ballot.
Gordon Friedman, a statehouse reporter for The Oregonian, said Oregon is expecting a major earthquake in the next 50 years that would result in severe damage to most roads and bridges. Also, a tsunami could damage or destroy coastal roads in the state.
“Transportation is one of the big issues in the legislature this year,” Friedman said. “Oregon’s roads and bridges and culverts are crumbling—they have been for quite some time—and lawmakers are trying to figure out what they can do to fund some necessary upgrades.”
A gas tax increase, tolling and various fees are being explored in Oregon.
“This push to find more money for transportation projects comes at a time when Oregon is facing a $2 billion budget deficit. …Asking for another billion dollars a year for transportation projects—it’s kind of taking a backseat to just shoring up the budget in general,” Friedman said.
Visit the CSG Knowledge Center for the complete webcast and details about other states to watch in 2017.
 
 
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