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Q and A on Transportation Funding

State Legislators Discuss the Role of Transportation Funding: March 2011

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Three state lawmakers recently shared their views with State Legislatures magazine on how states are dealing with transportation funding issues.

State Legislatures: What has been the impact of federal recovery (ARRA) dollars on transportation infrastructure spending in your state? What concerns do you have as that funding comes to an end?

Minnesota Senator D. Scott Dibble: Minnesota received about a half billion in ARRA resources for road and bridge improvements. These funds allowed us to put people back to work while at the same time getting to a large backlog of much needed improvements, rehab long deteriorated roads and improve the safety of our system.

Along with seeing significantly smaller construction programs in the upcoming years, the conclusion of ARRA will have an impact on jobs. Minnesota will experience the proverbial cliff, with construction companies, just having ramped up staffing levels, having to once again layoff hundreds of workers.

Oklahoma Senator Gary Stanislawski: The ARRA funding constituted roughly a full year of federal transportation dollars for Oklahoma. These unanticipated funds enabled Oklahoma to accelerate the delivery of critically needed projects that were already identified in our 8 Year Construction Work Plan and our Asset Preservation Plan. In essence, accelerating these projects sped up the delivery of the entire transportation program across multiple years. Likewise, the Oklahoma City and Tulsa Metropolitan areas along with the Counties also were able to complete work they would not have accomplished without the ARRA.

The ARRA funding certainly was a help, but a one-time infusion of resources did not solve the transportation infrastructure problem that the states and our nation is facing. Properly funding the transportation system that we need to be competitive in the global economy of the future must remain a priority.

Indiana Representative Terri Austin: The federal recovery dollars provided much needed funding for infrastructure at the state and local level. Contractors tell me it helped them to keep employees working and minimized anticipated lay-offs.

SL: Many studies have identified a structural gap between existing transportation revenues and escalating infrastructure needs. Is this a problem in your state?

Dibble: Despite having just raised our gas tax, including provision to pay the debt service on an aggressive bonding program that will repair deficient bridges in the aftermath of the I-35W Bridge collapse, Minnesota's transportation needs greatly exceed our available resources. We are only able to pay for about a third of what is needed to keep pace with increases in population, economic growth and congestion. The shortfall has been pegged at $2.5 billion per year. In response, Minnesota is rethinking exactly how to gain greater efficiency from its existing and future transportation system. A greater emphasis on safety and maintenance in lieu of huge capacity expansion, better coordination of land use planning, greater linkage with economic development goals, increased use of transit, congestion pricing and public-private partnerships are some of the policy strategies under consideration.

Stanislawski: Oklahoma is no different than any other state. None possess the resources to keep pace with the structural gap of reference. However, the Oklahoma Legislature has worked since 2005 to increase the state revenues available for transportation investments. The Department of Transportation has put these new revenues immediately to work to the benefit of the traveling public. However, states alone cannot nor should not be expected to finance the growing needs of our national transportation system.

Austin: Although Indiana’s 75-year lease of the Indiana Toll Road provided a much needed infusion of dollars for new road construction and maintenance, those dollars are coming to an end. In addition, the projected interest to be earned on the funds from the lease fell far short from what was planned resulting in a significant reduction in the dollars that are available for projects in FY 2012, FY 2013 and FY 2014. This has required a re-prioritization of projects with some being scaled back and others being eliminated entirely.

SL: What options are on the table in your state for closing the transportation funding gap? Is raising the state gas tax a viable option?

Dibble: Minnesota just raised its gas tax in 2008, so raising it again so soon is unlikely. Generating additional resources for transit, looking to public-private partnerships, and better alignment of those who benefit and those who pay for infrastructure improvements are proposals being examined.

SL: New leadership in Congress seems to be moving toward a downsized federal role in transportation funding. What would be the effect of a diminished federal role be for your state or the states in general?

Dibble: If our country continues to fail in its most basic and core responsibility to build the national infrastructure that allows our economy to thrive and compete internationally, the consequences will be a continuing loss of prosperity, an ever-shrinking middle class and a diminished role in world affairs.

Stanislawski: A downsized federal role should not be defined by minimizing the federal government’s responsibility to provide resources to the states in support of the construction, preservation and expansion of our national transportation system. Rather, a diminished federal role should translate as reduced regulatory oversight, federal actions and federal bureaucracy. This type of federal role directly impacts a states’ ability to efficiently deliver transportation improvements, often adds considerable expense and typically does not add value to the process.

SL: How has the congressional delay in passing a federal surface transportation bill affected your state or the states in general?

Dibble: The uncertainty of available federal resources makes long-term transportation planning difficult for states. Congressional inaction on reauthorization could lead to lost opportunities for transportation innovations, especially in the areas of serving an aging population, improving the environment, rebuilding our cities and competing in the international economy.

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