July | August 2014

 

 

 

 



 

Looming Elections Curb Major Transportation Finance Bills

By Jennifer Ginn, CSG Associate Editor
Last year may have been a big year for transportation issues, but this year’s elections are keeping states from making too many changes on the infrastructure front.
That was the message from Sean Slone, CSG’s program manager for transportation policy, who spoke recently to a meeting of the American Society of Civil Engineers’ State Government Relations Committee.
“Wyoming and Vermont both passed gas tax increases” in 2013, he said. “Maryland indexed their gas tax to inflation and also did a phased in sales tax on fuel. Massachusetts did a gas tax increase, indexed the tax to inflation, raised cigarette taxes and did a state sales tax on computer software and services that was later repealed.
“Pennsylvania eliminated their existing gas tax and raised the cap on the oil franchise tax paid by oil companies. They also raised a variety of fees and fines. And finally Virginia, where they also eliminated the existing gas tax and replaced it with sales taxes on the wholesale prices of gas and diesel.”
While governors and legislators may have been willing to tackle tax increases last year, they’re unlikely to pass any major transportation legislation this session.
“As late as last fall, Idaho seemed poised to tackle transportation funding,” Slone said, “something it’s been trying to do for many years, sometimes with the support of Gov. Butch Otter and sometimes not. But when it became clear that he was going to get a primary challenger this year from the right, the chances for any kind of tax increase were essentially reduced to zero.”
And uncertainty about MAP-21, the 2012 federal surface transportation authorization bill, isn’t helping any, Slone added. The current reauthorization expires at the end of September.
“I’ve heard at least one state transportation official say it’s difficult to go to the mat for a tax increase this year if you’re going to have to come back next year and ask for the same thing if the federal program gets reduced to nothing,” he said, “as many are fearing that it might.”
While the hopes may be slim for major transportation refinancing overhauls, it doesn’t mean states have come to a standstill in the transportation arena. Michigan is taking $215 million and putting it toward potholes and other road projects, Slone said. That is fairly typical of the type of action legislatures are willing to take this session.
“We are seeing a number of states tap budget surpluses, general fund dollars, rainy day funds and really lean toward temporary, one-time solutions rather than trying to tackle longer-term solutions this year,” he said. “Where we do see action in legislatures, they often are looking to vote on measures to have the voters decide rather than making the changes themselves. … We’re also seeing states looking to empower cities and counties to raise revenue to fund transportation or specific projects.”


 

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