The past two years have seen a growing number of states seeking to compensate for the lack of congressional action on transportation with funding initiatives of their own.
Indeed, for a growing number of states that have secured a stable source of funds for their transportation programs, a long-term federal transportation authorization is no longer an imperative.
Surveys conducted by the American Road & Transportation Builders Association, the National Conference of State Legislatures and the Center for Excellence in Project Finance have identified more than 30 states that have passed transportation-related fiscal initiatives in the past three years.
The surveys show that state governments have become veritable laboratories for fiscal innovation. Six states (Maryland, Wyoming, Massachusetts, Vermont, New Hampshire, and Rhode Island) have increased local fuel taxes. Others have introduced fuel taxes at the wholesale level (including Pennsylvania and Virginia), floated toll revenue bonds (Ohio) or raised highway tolls (Delaware and Florida). Still others have enacted or contemplate enacting dedicated sales taxes for transportation (Arkansas, Vermont, Wisconsin, Minnesota) or a “carbon pollution charge” (Washington).
More recently, the Michigan state legislature, with strong support from Republican Gov. Rick Snyder, voted to sharply increase gas taxes over the next four years to raise more than $1 billion annually to fix the state’s roads and bridges. Elsewhere, Republican Gov.-elect Greg Abbott announced plans to add $4 billion to Texas road funding and Washington Democratic Gov. Jay Inslee unveiled a $12 billion multiyear state transportation plan funded through bonds, fees and a new carbon tax.
At least 20 states are poised to tackle transportation funding in 2015, according to the Council of State Governments.
Collectively, these measures are generating billions of additional revenue for state and local transportation programs and making up for the absence of long-term federal funding. According to ARTBA’s Transportation Investment Advocacy Center, the transportation initiatives that were on the November ballot alone will provide nearly $21 billion in additional revenue. In California, local sales taxes will raise $3.8 billion for transportation in 2014, according to the state transportation department.
States are not standing idly by, waiting for Congress to come to the rescue with more money. Instead, governors, state legislatures and local governments, responding to uncertain prospects for future federal funding, are taking aggressive steps to make themselves less dependent on federal aid. They are passing local bond referenda, financing large-scale construction projects with long-term credit, and entering into investment partnerships with the private sector.
“State legislatures need a funding solution for their transportation infrastructure,” said Mick Bullock, spokesman for the bipartisan National Conference of State Legislatures. “If Congress does not act, states will have to look at other funding solutions.”
With the midterm elections having increased Republican majorities among governors and in state legislatures to historic highs not seen since the 1920s, the movement toward greater self-sufficiency and financial innovation at the state and local level is likely to grow in strength. Next year, Republicans will hold 31 governorships and 68 of 98 state legislative chambers. The GOP will control both the legislatures and governorships in 23 states.
A new generation of problem-solving Republican governors — Scott Walker of Wisconsin, Chris Christie of New Jersey, John Kasich of Ohio, Rick Scott of Florida, Sam Brownback of Kansas, Mike Pence of Indiana, and Snyder of Michigan, among others — is turning away from excessive dependence on Washington, eager to limit the power of the federal government and seek a new path toward sustainability.
“Power is flowing out of Washington, largely unnoticed, and back to the states and localities,” columnist Michael Barone wrote recently. “You can see that if you look at transportation policy. … In effect the feds are abdicating and the states are taking up the burden.”
The time to reconsider the manner we pay for transportation may indeed be upon us.
Kenneth Orski is editor and publisher of Innovation NewsBriefs. Thinking of submitting an op-ed to the Washington Examiner? Be sure to read our guidelines on submissions for editorials, available at this link.
