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Joung LeeJoung Lee is the associate director for finance and business development at the American Association of State Highway and Transportation Officials (AASHTO). In that role, he reviews surface transportation policy and legislative matters with state transportation departments, congressional staff, and executive branch. Joung also serves as deputy director of the AASHTO Center for Excellence in Project Finance, which provides education and research on transportation finance to states. In addition, he founded Young Professionals in Transportation, a national networking association based in Washington, D.C.

State Legislatures: How have state departments of transportation (DOTs) coped with declining state gas tax revenues?

Joung Lee: DOTs have adopted the mantra of "leading in lean times." Because state revenue challenges are compounded by uncertain highway and transit funding from the federal government, DOTs are left with tough decisions that make it extremely difficult to maintain, let alone improve, the condition and performance of the nation's transportation system. In fact, most DOTs have experienced varying degrees of austerity even prior to the economic recession, even in times of growing programs. That being said, this has been an opportunity to unleash innovation and creativity by DOTs to get more out of their limited resources.

SL: What type of streamlining and efficiencies have you seen being employed by state DOTs to save and conserve increasingly scarce transportation revenues?

Joung: Some of the streamlining actions undertaken by DOTs include applying zero-based budgeting to question every spending decision, freezing hiring to trim staffing through attrition, and deploying value engineering to ensure maximum design efficiency. A great example of the latter is Missouri DOT's Practical Design efforts, where engineers challenge traditional standards to develop efficient solutions to solve today's project needs. MoDOT’s goal through this program has been to build “good” projects, not “great” projects, to achieve a great system while realizing significant cost savings. More broadly, DOTs have reexamined their mission and priorities in the multimodal, post-interestate era, and have made the necessary changes to achieve a more agile and productive workforce.

SL: Generally speaking, what has been the impact of the lack of a long-term federal transportation reauthorization on the day-to-day functioning of state DOTs?

Joung: Because the federal government has traditionally provided 45 percent of funding for highway and transit capital programs in the United States, this lack of a robust federal program has translated to program and project delays or cancellations, deferred maintenance, and furloughs and layoffs at many DOTs. For example, the unstable federal funding stream has forced some of the cold weather states to miss portions of their valuable construction season, thereby reducing the number of construction jobs and delaying economic benefits from much-needed transportation projects.

SL: What is your prognosis for federal transportation legislation in the coming months?

Joung: It has always been AASHTO's goal to seek a well funded, long-term transportation bill, which includes essential policy reforms. However, the top priority is to ensure stability in the Federal-aid Highway and Transit programs for the immediate future. As such, we strongly support moving swiftly to conference and enacting a good transportation bill mutually agreed to by the House and Senate. Given the current political situation, it has been a trying time for all transportation stakeholders including AASHTO and NCSL. However, I remain hopeful that after nine extensions over 2 1/2 years since expiration of the last authorizing legislation, that we will be able to get a new bill enacted in the coming months.

SL: Are there other trends or opportunities relative to state transportation funding that you would like to mention?

Joung: I think the funding challenges have forced the DOTs to consider options that might not get a look in more plentiful times. Some of these opportunities include applying different financial tools that are used to leverage the limited transportation funding and revenue sources, which allow DOTs to raise the high up-front costs needed to build projects and expedite the implementation of needed improvements. In addition, DOTs are learning to better communicate what the users gets in terms of mobility improvements for what they pay into the system. I think the era of steadily growing gas tax revenues for five decades up to 2008 may have bred complacency among transportation stakeholders in regularly making the case to the general public on the need to invest in transportation infrastructure to ensure economic vitality and high quality of life.