AASHTO Journal, 18 December 2015
After the FAST Act locked in five years of steady Highway Trust Fund disbursements to state departments of transportation and transit agencies, many states are still pressed to come up with enough money to meet their federal matching requirements or otherwise pay for their infrastructure needs.
The new authorization law provides states with about 5 percent more in highway program money in its current, first fiscal year, with annual increases of about 2 percent for the next four. The transit funding increases are higher for the first two years, lower in the final three.
Now that they know what to expect in the flow of federal dollars, officials in many states are warning about their own revenue needs.
Officials in both Missouri and Arkansas have warned that they lack the dedicated state transportation revenue necessary to match federal funds. In many cases, federal-aid highway projects require states to cover 20 percent of project costs.
St. Louis Public Radio reported that Sen. Claire McCaskill, D-Mo., told reporters in a Dec. 2 conference call she has been talking with the Missouri Department of Transportation about the need to find matching funds.
“We have been a state that has benefited because we have lots of roads and the formulas have benefited Missouri,” she said. “That will go away and we will be getting less than we paid in if Missouri doesn’t have its matching share.”
That same day, Scott Bennett, director of the Arkansas Highway and Transportation Department, reportedly told the Arkansas Highway Commission that state will not have enough transportation revenue to match a $250 million increase in federal funds allocated by the FAST Act for highway improvements.
Arkansas would need to come up with about $50 million more a year to fully match the federal funds, that report said. Arkansas Online reported that Bennett said the state would need to find more money or pare back in areas such as highway maintenance spending to receive the federal share.
Wright: FAST Act no windfall for states.Elsewhere, a number of states’ governors and legislatures are trying to find ways to increase or reallocate more state revenue for their needed infrastructure investments, so they can replace aging facilities and keep up with rising demand on their transportation networks.
As reported in the States section of this week’s AASHTO Journal, Alabama lawmakers will hold public meetings next month to consider a gas tax increase with the governor’s support. The governor of Connecticut is trying to get lawmakers there to pass a “lockbox” measure to prevent use of some transportation revenue for other budget purposes. And the incoming governor of Louisiana has a task force considering that plus other funding options.
Bud Wright, executive director of the American Association of State Highway and Transportation Officials, told AASHTO Journal that “these ongoing financing struggles for many states illustrate that the FAST Act is just one piece of the infrastructure funding challenge facing this country. Its major achievement is that it provides five years of stable federal funding, but it is not a windfall.”
He added: “That new law’s modest revenue increases won’t go far in chipping away the huge backlog of needed transportation project investments. While some states will need to come up with more money just to keep up with the FAST Act, all of them face the challenge of finding enough revenue to make the kind of improvements their residents and their economies need.”
The American Society of Civil Engineers cited news reports from Ohio, Tennessee and Massachusetts in which state or local officials show mixed reactions to the FAST Act – appreciative that it stabilizes the federal contribution for five years and adds some funds but noting that it does not provide a major increase to attack the backlog.
Work is under way in other states as well to put together new transportation revenue packages.
The Indiana House Speaker is leading efforts to craft a funding plan there that could raise both fuel and cigarette taxes to put more money into infrastructure.
Minnesota officials are looking at various ideas but have not reached a consensus, as Gov. Mark Dayton says the state will need billions in additional transportation dollars for the next decade.