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Capital Ideas II: State Transportation Funding Lessons from 2015 & Challenges for 2016

Posted by Content Coordinator on Friday, December 18th, 2015

TRANSPORTATION FOR AMERICA

Introduction

After years of inactivity on the issue, transportation funding has increasingly become a critical issue in states both red and blue and elected state representatives have responded by moving to raise new funding at the state and even local level. With 12 states successfully taking action this year, 2015 had the largest number of successful increases in state transportation funding since Transportation for America began tracking this phenomenon several years ago.

For decades, the federal government was a dependable partner for states, guaranteeing billions of dollars in reimbursements primarily to state governments to fund highway and public transit projects. Americans drove more year after year and the resulting gas tax receipts steadily increased. But over the past decade, the total amount of driving plateaued (though it recently began to increase once again), per capita driving rates decreased, and our vehicle fleet became more fuel efficient, reducing by billions the revenue the federal government receives annually from the 18.4 cents-per-gallon gasoline tax. With the federal gas tax unchanged for more than two decades, inflation in construction costs further eroded the value of these already-dwindling funds.

Congress did not increase the gas tax in the recently passed transportation authorization law — the FAST Act — which required a transfer of more than $73 billion in general funds to the Highway Trust Fund (HTF) to pay for the nearly flat-funded program over the next five years.1 This came on the heels of extended congressional inaction resulting in 35 short-term policy extensions since 2008 to keep the federal transportation program solvent, causing great uncertainty for states and local governments planning and funding projects.

The same factors decreasing federal revenues have had the same effect on most states’ transportation budgets. Like the federal government, nearly all states have relied on static, cents-per-gallon gas taxes to fund their transportation systems. But this revenue gap is even more urgent for states because nearly all are constitutionally or statutorily required to balance their budgets.

This funding crisis has spurred many states to action to plug the gaps and attempt to keep up with the dwindling federal and state revenues. Since 2012, 23 states have raised new revenue for transportation. 12 states did so in 2015 alone.

Members of T4America’s State Transportation Advocacy, Research & Training (START) Network played key roles in these efforts, helping to pass transportation funding or policy legislation in 2015 in Iowa, Utah, Georgia, Washington, Idaho, and Louisiana. Launched in 2014 at the first-ever Capital Ideas conference, the START network provides peer-to-peer information sharing and expert policy support for members, which includes state legislators, chambers of commerce, local elected officials and advocacy organizations throughout the country.

The first half of this report summarizes this year’s overall state legislative action on transportation funding packages and policies enacted. In the second half, we examine two specific funding proposals closely on the merits to see how they compare to both T4America’s policy platform and the critical strategies for successful funding campaigns outlined in T4America’s first Capital Ideas report released earlier in 2015, Capital Ideas: Winning State Funding for Transportation, Lessons from Recent Successes. Were the proposals in Utah and Michigan good ones for those states’ residents? Did the coalition of supporters choose a winning strategy? This second half of this report wraps up with a close look at a policy-oriented bill in Virginia to institute a transparent and accountable process to redirect existing transportation funds to the projects that will deliver the greatest return.

2015 State legislation to raise additional transportation revenue

Download full version (PDF): Capital Ideas II

About Transportation for America
www.transportationforamerica.com
Transportation for America is an alliance of elected, business and civic leaders from communities across the country, united to ensure that states and the federal government step up to invest in smart, homegrown, locally-driven transportation solutions. These are the investments that hold the key to our future economic prosperity.

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