TOP 5—TRANSPORTATION | hot topic
2014 PREVIEW
States Seek Transportation Funding Certainty by Sean Slone MAP-21, the hard-won federal surface transportation authorization bill approved by Congress in 2012, will expire at the end of September. Inaction by Congress on a successor would mean the federal Highway Trust Fund will run out of money in 2015 and bring to a halt many important transportation construction projects around the country. “(MAP-21) was a wonderful six-year bill with only two years of funding,” said Kentucky Transportation Secretary Mike Hancock. As the 2014 president of the American Association of State Highway and Transportation Officials, known as AASHTO, Hancock will help lead the charge to encourage Congress to pass the next bill on time and avoid the many shortterm extensions that caused headaches for states the last time around. “The uncertainty … constantly forces the states to roll the dice in the hopes that everything will come together for the following year’s program,” he said. “Many of the projects that we do are multi-year projects.” The looming fiscal cliff for the trust fund, which had to be propped up by a general fund transfer as part of MAP-21, will make the task for Congress even more difficult. There appears to be little agreement regarding what to do about the fund’s principle revenue source—the federal gas tax. The tax has not been raised in more than 20 years and is not indexed to account for inflation. Increasing fuel efficiency, alternative fuel vehicles and declines in driving are expected to further erode gas tax revenues in the future. “What we would love to see is a multi-year bill that includes long-term, sustainable highway funding from the federal government,” Hancock said. Not everyone shares that perspective. Some in Congress have proposed reducing the gas tax and transferring authority over federal transportation programs to states. Hancock and others think that would be a mistake. “We do want and need a vibrant role (for the federal government) in transportation funding in America,” he said. “There are too many things at a national level that simply require federal involvement. We need to have that consistency in the program as a hallmark of the program.” Moreover, Hancock believes the federal program should maintain the principle of a user fee-based system. He doesn’t think transitioning to sales taxes—as some states have done or have proposed—or continuing to rely on general fund revenues would provide a sustainable, predictable, long-term solution. A transition to a mileage-based tax system appears inevitable but requires further incubation at the state level in places like Oregon, which has been experimenting with the concept for more than a dozen years. Hancock said as the federal government and other state governments search for solutions in the near term, they might be wise to take a cue from his home state of Kentucky, which has an indexed gas tax.
TRANSPORTATION FUNDING LOOSE CREEK, MO.—Sen. Mike Kehoe and Rudy Farber, chairman of the Missouri Highway and Transportation Commission, foreground right at microphone, announced they were going to introduce legislation to call for a temporary 1 cent sales and use tax dedicated specifically to transportation funding in February 2013. It would be scheduled to sunset in 10 years. © AP Photo/News Tribune, Julie Smith
19
TOP 5 transportation issues
3
4
5
MAP-21 Reauthorization & the Future of the Highway Trust Fund
The Legacy of MAP-21
States Take Action to Fund Transportation Projects
Evolution of PublicPrivate Partnerships
Finding Strategies for a Multi-Modal Future
Back to Top
» JAN / FEB 2014
2
CAPITOL IDEAS
1
