Maine Trails, February - March '14
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News from away

What are other states doing to fix their roads and bridges?

Maine is not the only state grappling with the issue of decreasing revenues to invest in transportation infrastructure. With a federal gas tax that has remained stagnant since the 1990s, increased vehicle fuel efficiency and other factors at play, every state in the union faces mounting maintenance backlogs and dwindling state and federal highway revenues.
Last year, several states took steps to address their shortfalls – from increasing state gas taxes and imposing a sales tax on wholesale gasoline to establishing revolving funds to finance major infrastructure projects. This year, 19 other states have gotten into the act and have transportation funding measures under consideration. Read about some of these developments below:
Three bills under consideration in the Alaska state legislature call for setting up a $2 billion account to be earmarked for an Alaska Transportation Infrastructure Fund. Continued funding would come primarily from fuel taxes and license fees. The sponsor of one proposal, Republican Representative Peggy Wilson, has grabbed headlines for her proposal. Whether one of the proposals will pass is still uncertain, as there are diverging opinions, including some of the legislature’s Democratic leadership, about the fund’s revenue stream and oversight.

Last year, California lawmakers voted to increase the state gas tax by 3.5 cents. This year, the California State Board of Equalization, which sets state fuel tax levels, voted 3-2 to reverse that decision, decreasing the gas tax by 3.5 cents. Californians could start seeing the price cut at the pump as early as July 1. Meanwhile, the state legislature is considering the nation’s first ever carbon tax paid by drivers – a 15 cent per gallon charge at the pump. If passed, none of the funding would go to roads. Instead two-thirds would pay for an earned income credit for families making less than $75,000 a year. The other third would help fund public transit.
Municipalities have been tackling transportation funding on their own. During this past election, four cities in Marin County — Corte Madera, Larkspur, San Rafael and San Anselmo — passed ballot measures to fund transportation and other general services. San Rafael voters approved a proposal to extend that city’s one-half cent sales tax for 20 years while also implementing a .25 percent increase. That will raise the city’s sales tax to a national high of 9.25 percent.
Democratic Governor Jack Markell in February proposed a 10-cent-per-gallon increase to the state’s 23-cent gas tax. The hike would cost a typical Delaware motorist $57 a year and would be indexed to inflation. Ensured three more years of a second term, the governor said, “When it comes to funding transportation, there are no Democrat bridges or Republican roads.” He noted that without an increase or an alternative increase in funding, the state will have to shelve 55 infrastructure projects this year. 
In February, an Iowa House panel moved ahead with a proposal that would raise the state’s gas tax by 10 cents a gallon over three years to help fill a $215 million a year funding gap. Whether the measure will pass will depend on the support it gets from other state leaders. So far, Republican Governor Terry Branstad, who recently announced plans to run for a sixth term, has been ambivalent. “I am not ruling anything in or ruling anything out,” he said. Branstad has asked his transportation secretary to come up with equally unpopular alternatives – raising taxes on fuel used in farm machinery and increasing the cost of motor vehicle registrations.
Last year, state lawmakers took steps to raise $4.4 billion over the next decade by indexing the state’s gas tax and levying a 3 percent sales tax on gasoline by June 15. Still, advocates say, local governments also need help with their capital projects. This year, the Maryland General Assembly is considering a bill to establish an infrastructure bank for local transportation projects. Delegate Galen Clagett testified earlier this year that 33 states already have such banks, and Maryland should get on board to keep up with needed capital improvements. His bill would establish an infrastructure bank with revenue from corporate income tax, other state appropriations and investment earnings. Local governments or private entities could then apply for loans from the bank to finance transportation projects.
After years of deadlock on transportation spending, Massachusetts lawmakers last fall passed transportation funding legislation that includes new sales tax measures, a $1 per pack cigarette tax increase and a three-cent increase in the state gas tax – and indexing it to inflation to help fill a $1 billion-per-year funding gap. This year, the Massachusetts House has advanced a bill that authorizes the state to borrow up to $12 billion for transportation projects.  
A supplemental funding bill that has already passed in the Michigan House aims to provide $100 million in short-term funding to help counties deal with snow removal bills and another $115 million to boost spending on priority transportation projects. The Senate has its own, more modest bill in the works that allocates $15 million for priority projects with $100 million for snow removal. Both measures, despite strong support from Governor Rick Snyder, face a tough fight. One faction argues that it is just a short-term fix. That is the same group that tried but failed to pass a hike in the gas and diesel fuel taxes last year, as well as a sales tax measure. The other faction is pushing for deeper tax cuts.

The Missouri House Transportation Committee recently approved a proposed constitutional amendment imposing a 1 percent sales tax for 10 years. After extensive polling, supporters of new funding for transportation had settled on the sales tax proposal after testing support for an increased fuel tax (17 cents per gallon) and toll roads. The sales tax proposal is the only one that found majority support in polls and political support from the contractors and other groups willing to fund a campaign to convince voters. Whether or not the sales tax measure will pass is uncertain. While it has proven more popular than other methods in polling, some detractors have argued the tax is regressive, placing the heaviest burden of the sales tax on the poor.
New Hampshire
Last year, a Democratic-backed effort to increase the state’s diesel and gas tax rate by 12 cents per gallon over several years failed. But with a 10-year backlog of road maintenance totaling $1.3 billion, some state leaders appear ready to revisit a change in the gas tax. Senate Transportation Chairman Jim Rausch, a Republican, has sponsored a bill would increase the state’s 18-cent-per-gallon fuel tax rate by 4 cents to 22 cents per gallon. If passed, it would be the first state gas tax increase since 1992 and would raise an estimated $28 million the first year.
Last year, Oregon passed a pioneering law that will allow state residents to pay a levy of one-and-a-half-cents per mile driven instead of the state's gas tax, currently 30 cents a gallon. (Participants still have to pay 18.4 cents a gallon in federal gas taxes.) Oregon's pilot program, set to take effect in July 2015, will enable drivers to choose his or her preferred mileage-metering method – a smartphone app, an odometer sensor or periodic mileage checks at DMV inspection sites. The law's early adopters will pay the per-mile road-usage fee for a designated period and receive a refund for what they paid in state gas taxes.
Oregon lawmakers also are discussing allocating 9 percent of lottery proceeds for construction and operation of mass transit and rail and a proposal to raise another $9 million for aviation and marine infrastructure.
Last fall, the Pennsylvania General Assembly passed a $2.3 billion-per-year transportation funding plan funded primarily by higher fuel taxes. Support for the measure was strong among community leaders and transportation advocates and the bill was signed into law in November by Governor Tom Corbett. Bad roads have become such an issue in the state and the measure has been so popular, Corbett is expected to receive a boost during the upcoming governor’s election – despite breaking his no tax increase pledge. “There is barely a spot in Pennsylvania … that will not see an improvement because of this legislation,” Corbett said at the signing.
The bill is also expected to create construction-related jobs in coming years.
Vermont will be the third state (Wyoming and Maryland are the other two) this year to legislatively increase its gas tax. Governor Peter Shumlin signed the bill last April that raises the gas tax by 5.9 cents. The diesel tax also will increase – by 2 cents on July 1 and another 1 cent next year. Legislators who voted for the gas tax increase did so despite a strong opposition. Without an increase, Vermont risked losing $56 million in federal matching funds.
The Virginia General Assembly last year passed a transportation funding reform package that replaced the state gas tax with a 3.5 percent wholesale tax on fuel and a 6 percent wholesale tax on diesel fuel. The deal also included increasing the state sales tax from 5 percent to 5.3 percent, and diverting a portion to fund roads. The package of new funding also increased vehicle registration fees by $15 for rail and transit, and all told, is expected to raise $1.4 billion for the state’s transportation system.
Early last year, state lawmakers voted to raise the state excise tax on gasoline by 71 percent (10 cents per gallon). Set to go into effect on July 1 of this year, the state gas levy will go from 14-cents-a-gallon to 24-cents (only Alaska has a lower state gas tax) and is expected to raise $71 million a year in new revenue for the 2014 fiscal year. The revenues will be spent as follows: $47 million for state highways, $16 million for county roads, $6.7 million for city and town roads, and $1.2 million for state parks, including such things as road, boat ramp, off-road and snowmobile trail maintenance.


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