States Look Under Couch Cushions for Transportation Dollars

Desperate times call for desperate measures. And if you’re a state Department of Transportation dealing with shrinking gas tax revenues, rising maintenance needs, and some highway megaprojects you really, really want to get built, the times are pretty desperate indeed.

Two stories from yesterday’s news tell the tale. First, the Cuomo administration in New York was denied in its attempt to use a federal loan program intended to support clean water projects (?!) to partially finance the reconstruction and expansion of the Tappan Zee Bridge. Meanwhile, in Texas, a story in the Fort Worth Star-Telegram described a question on this fall’s ballot that would divert a share of the state’s oil and gas revenue to transportation – enabling  the state to continue to fund new road projects despite $23 billion (?!) in outstanding transportation debt.

Texas’ strategy has a ring of genius about it. While other states use oil and gas revenue to do things like endow permanent funds for their residents or purchase environmentally sensitive land for future generations, the Texas plan would use those funds to encourage more people to drive, thereby increasing demand for oil, thereby leading to more drilling and more oil and gas revenues for the state, which could then go toward building more roads. Everybody wins!

The thing that is striking about the transportation funding crisis is that for as bad as the situation seems at the surface, it is way, way worse upon closer scrutiny. As the Sightline Institute’s Clark Willliams-Derry has noted previously with respect to Oregon, and as the Star-Telegram story implies, states are struggling just to meet the accumulated debt service payments from completed transportation projects, let alone find money for things like maintenance and new projects.

States have long raised money for transportation projects by bonding against anticipated gas tax revenue, meaning that, when revenue declines, the debt service on previous projects crowds out other spending. The effect is similar to a homeowner who loses a job or takes a pay cut at work – luxuries like going out for a restaurant meal are deferred in order to make sure there is enough money to make the mortgage payment.

Or they should be, anyway. But America’s transportation agencies are so used to having access to ample funding from gas taxes, and so programmed to see highway construction as the solution to every conceivable societal problem, that they are having a hard time differentiating “needs” from “wants.”

So, tomorrow, we at Frontier Group and our colleagues at U.S. PIRG Education Fund are going to help them. Our new report, Highway Boondoggles, will highlight 11 proposed highway projects around the country that are either unnecessary or of highly dubious value. Those projects, of course, are only the tip of the iceberg – there are many, many others that could be canceled tomorrow, or even just simply  put on hold for a while, with little to no cost to society.

For the past decade, states like Texas have invested tens of billions of dollars in highway expansion projects, even though the number of miles driven has remained stagnant. Perhaps it is time for us to take a step back and reevaluate our transportation investment priorities – giving greater emphasis to funding necessary repairs and investments in transit and other growing non-driving modes of transportation – before cracking open new cookie jars of revenue just to keep the highway building machine chugging along.