Missouri DOT Says Finances Improve, But Not Enough for Long-Term Highway Needs

AASHTO Journal, 20 May 2016

The Missouri Department of Transportation is telling residents that its financial outlook has improved significantly from its forecast a year ago, but that it is still not good enough to make the improvements the state will need to keep up with a growing population and commerce.

“Though recent events have provided the resources to maintain the system in its current condition or slightly below, the current condition is not acceptable to many Missourians,” MoDOT said in its draft 2016 Statewide Transportation Improvement Program.

dollarpump.jpg“Simply put,” it continued, “the current condition costs Missourians money, lost time and productivity and limits economic development relative to neighboring states. The ability to deliver the types of transportation improvements Missourians have said they desire is still compromised.”

The agency presented the STIP to the Missouri Highways and Transportation Commission May 11, and is taking public comments through June 10 as it readies the project document for a possible July 7 commission approval.

In the document, MoDOT noted that at this point in 2015 its forecast predicted that by fiscal 2017 the state agency would be unable to match federally provided funds and that its construction budget would fall to just $325 million a year – a level at which it would have to cut back capital investments to a priority list of highway miles.

Since then, though, MoDOT said “a combination of fortuitous events” boosted the outlook.

“First, an uptick in the economy allowed MoDOT’s state revenues to exceed expectations by $47 million” in the 2015 fiscal year, partly as low fuel prices spurred drivers to rack up more miles and buy more fuel, which boosted fuel tax receipts. Also, both the level and the value of state motor vehicles sales rose, which increased tax receipts for that activity.

MoDOT said it has “adjusted our financial forecast upward to reflect this trend,” but warned that “an external event driving up the price of fuel may require a downward adjustment.”

The second big factor helping the outlook was federal passage of the five-year FAST Act last December. MoDOT said with the funding certainty that law provides, the state agency can draw down its cash balance “from $758 million at the beginning of fiscal year 2017 to approximately $215 million by the end of fiscal year 2021” to meet its federal matching funds requirements.

However, it added, such “deficit spending comes with its own risks and is unsustainable.”

Finally, MoDOT said it is “now receiving federal reimbursement for some of its preventive maintenance activities – striping, asphalt pavement repair and chip seals – to the tune of $40 million per year.”

Counting all those factors, MoDOT said its 2017-2021 STIP projects that contractor awards will average about $800 million a year.

The agency said although in some areas of the state that will be enough to maintain the state-administered road system in its current condition, and provide for some safety and congestion projects, “in other areas . . .  we will still lose ground in asset condition over the long haul.”

In particular, “it won’t enable the reconstruction and expansion of Interstate 70 – a long-overdue need – or the major needs of any of Missouri’s other aging interstates and major river crossings.” Nor will it allow “for the types of expansion projects that typically spur economic development and create jobs.”

It also will not permit the state to reduce the number of “critical-condition bridges,” MoDOT said, from the current 640. It said it can repair or replace about 100 bridges a year but that another 100 will fall into the critical category, for a relatively constant total. Already, it added, about 1,345 bridges have weight restrictions.

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