Budget Pressures Cloud Infrastructure Project Planning for Many State DOTs

AASHTO Journal, 10 June 2016

Six months after Congress passed a long-term surface transportation bill with the FAST Act, a growing number of state departments of transportation face financial constraints that have officials warning they may not be able to maintain their highway systems in current condition.

Several states are facing budget crises, partly as oil and natural gas tax receipts fall with the sharp price declines of recent years for those commodities, and DOT budgets have taken a hit along with those of other agencies. Some also continue to see their gasoline and diesel fuel tax revenue limited because of low pump prices of the past two years.

The “Fixing America’s Surface Transportation” Act provided only modest increases in most surface transportation programs, as the Association of State Highway and Transportation Officials has said. And since its funding levels are locked in for five years, states cannot expect more help from the federal level unless Congress at some point passes a major infrastructure investment package.

capitol040116.jpgAASHTO Executive Director Bud Wright, in an opinion article for The Hill newspaper that covers Congress, recently called for candidates in this year’s elections to talk about how they would fund transportation investments as a way to build economic strength.

But while such a focus could lay the basis for future action in Washington, many states are already struggling to plan their road projects for coming years on tight budgets. And DOTs are trying to let their constituents know what sort of travel conditions they will face without major new fund actions at the state or federal level.

Wright told the AASHTO Journal this week: “The public needs to realize what our state agency CEOs are facing. In many cases they do not have the resources to both carry out extensive maintenance programs for their existing infrastructure and to make significant traffic-flow improvements that the public wants. This country needs to invest heavily in its transportation networks, or else the rough rides, congestion and transit service shortfalls will only get worse.”

On June 7, Kentucky Transportation Cabinet Secretary Greg Thomas said his agency will delay starting any new state-funded road projects for a year in order to replenish a fast-shrinking Road Fund account. (See related story in this week’s States section.)

In the past month, state DOT officials in Missouri, Illinois and Wisconsin said their planned road and bridge investment programs cannot keep up with growing population and commercial demands, based on the revenue now available.

Illinois Transportation Secretary Randy Blankenhorn warned that “revenue projections for transportation do not meet the needs of the state and the condition of our system will continue to deteriorate.”

A Wisconsin alliance of business groups and other transportation stakeholders reported after a series of recent meetings around the state that various businesses are hampered by the condition of state roads, while farmers and timber producers have to reroute their trucks around a growing number of weight-restricted bridges or roads. (See story in States section).

New budget agreements in Connecticut and Oklahoma took revenue away from road improvements to help cover other spending or revenue shortfalls. The Moody’s debt rating agency issued a negative outlook report on Kansas DOT bonds after a budget deal that diverted sales tax receipts from transportation.

Falling fuel prices undercut California’s revenue projections so much that its Transportation Commission has cut or delayed $1.5 billion in planned projects.

And while South Carolina enacted a new bonding measure this month to boost road and bridge funding over the next 10 years, the state DOT and various lawmakers have already said it will not be enough to meet the highway system’s needs. “The state is at a critical point where additional and rapid growth is putting extreme demands on a transportation system that is far from being in good condition,” the SCDOT said June 8.

Likewise in Arkansas, where lawmakers last month adopted the governor’s five-year plan to redirect other funding to support highway projects. Gov. Asa Hutchinson said it was “a good start” that would allow Arkansas to meet its matching fund requirements for federal project allocations in that period.

But, Hutchinson added: “There’s always the option of doing something different down the road, debating our options and looking for long-term solutions.”

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