Gas Tax is not keeping up with the roads.
Federal and state motor fuel tax receipts — the billions that pay for road construction, repaving, maintenance and operations of highway and street departments — are not growing as fast as the cost of those projects. And that may mean more potholes and deteriorating roadways during the coming years.
by Doug Page
Dayton Daily News
A Dayton Daily News examination shows that the share Ohio counties get from the state gasoline tax have increased by 0.5 percent from 2006 to 2013. During the same period, the cost of paving 1 mile of road in Montgomery County has risen more than 71 percent. Of the $2.7 billion in revenue collected by the Ohio Department of Transportation, $1.8 billion comes from the state gas tax.
The problem, say county engineers, is that increasing numbers of people are driving more fuel efficient vehicles. That means that those vehicles get better gas mileage, and owners don’t have to buy as much gas. At the same time, wear and tear on roads have increased because more miles are being driven. ODOT estimates the vehicle miles traveled (VMT) is projected to increase by 31 percent between 2008 and 2025, with the largest increase being truck VMT — a projected growth of 67 percent.
Since the late 1990s, the money that is generated to maintain roads — fuel tax receipts — have been flat. This during a time when a Brookings Institution study found that the number of vehicles and miles traveled have increased at a greater rate than gallons of fuel consumed. Add to the mix that some people are driving vehicles that use alternatives besides gasoline. Those alternative fuels are not subject to the gasoline tax.
“A lot of the new fuels — compressed natural gas, electric, biofuels — are not taxed,” Greene County Engineer Robert Geyer said. “In addition, the tax receipts are stagnant because of the increased (fuel efficiency).”
In 2006, the state’s 88 counties each received $2,322,444.66 from the state fuel tax. The ODOT estimate for 2013 is $2,333,960. That is an increase of less than 0.5 percent.
“Since 2005 asphalt prices have increased by 88 percent,” Miami County Engineer Paul Huelscamp said.
During the same period, the price of gas has increased by 62 percent.
“When the price of gasoline goes up, consumption goes down, plus the cost of our commodities, especially asphalt which is oil-based, goes up,” said Steve Faulkner, Ohio Department of Transportation spokesman.
From 2006 to 2013, the cost of paving 1 mile of an Montgomery County road 2o-feet wide increased from $38,669 to $66,197.
“We’re not resurfacing nearly as much as we would like,” Tunison said. “We were resurfacing roads on a 10-year cycle. But the way costs are now we’re on a 25-year cycle. Our roads are falling apart before we get to them.”
During the budget crunches of the Great Recession, localities — faced with decreases in funds from the state and the rollback of many taxes — often slashed their road maintenance as a means of balancing their budgets. Now they are trying to play catch-up.
“We did around 60 lane miles last year,” said Steve Finke, assistant public works director. He estimated the city needed to pave 78 lane miles in the foreseeable future to catch up.
In 1919, Oregon instituted the first state gas tax dedicated to road construction. Since then, the gas tax has been the user-fee of choice: those who use the roads pay for them — roughly in proportion to use.
Montgomery County Engineer Paul Gruner said the rise in fuel economy, miles driven and the use of alternate fuels is uncoupling that connection between road use and how much the user pays.
“The fuel tax is not a long-term answer,” he said.
Instead, Gruner and others see linking the miles traveled to the amount a driver pays.
“The technology is there” for a vehicle miles traveled (VMT) tax. “There is a way to have a user-based fee that is simple and easy to use,” said Jim Whitty, manager of the Office of Innovative Partnership and Alternative Funding for the Oregon Department of Transportation. The Oregon Legislature is currently considering a VMT tax.
The proposed VMT tax would apply to vehicles with mileage ratings of 55 miles per gallon or greater. Under the proposal, owners could choose on of several technologies available to track their mileage. They would then be billed quarterly, Whitty said.
“It takes in a few people, but gets the electric-powered and plug-in hybrid vehicles who pay little or no fuel tax,” Whitty said. “These are also the vehicles that already have the internet technology built in. … It’s something that could be expanded to include more vehicles.”
Tucked away in the ODOT budget signed last week by Gov. Kasich is language establishing a Joint Legislative Task Force on Department of Transportation Funding to study the elimination of the state fuel tax.
Many hope this state will come up with a better method of funding.
“We know there has to be a national dialogue,” ODOT’s Faulkner said of the task force. “Somebody has to initiate the conversation.”
“I’ve been harping about this issue for the last couple years,” Greene County’s Geyer said. “Now that ODOT is feeling the pinch, my hope is something will be done.”
Ohio has 2,462 'structurally deficient' bridges, engineers group says.
The country's infrastructure hasn't improved much since 2009, garnering a D+ rating from the American Society of Civil Engineers this year after being awarded a D rating four years earlier, the Cincinnati Business Courier reports.
by Evan Weese
“It’s a sad reality that little has changed since the last report card in 2009,” James Corless, director of Transportation For America, said in a press release. “Has anything in Washington changed to drastically improve the condition of our roads, bridges and transit systems in the four years since?”
Ohio was given a C- grade in the latest infrastructure report card, as well as in 2009. That places Ohio ahead of the national average, although the state has 2,462 structurally deficient bridges and about 42 percent of its roadways are “poor” or “mediocre” in quality.
If tolls aren't the answer, what is?
Fierce opposition from residents and politicians in Northern Kentucky over tolls has many searching for other options to finance the $2.5 billion Brent Spence Bridge replacement. But tolls are becoming more common around the country as alternative funding sources dwindle, national experts say.
by Scott Wartman
A raise in the federal gas tax and a change in how Kentucky allocates federal funds have come up as suggestions at recent public meetings in Northern Kentucky on ways to help pay for the new Interstate 71/75 bridge.
But many localities around the country have found themselves having to pay for their own highway projects.
A decrease in federal road funds and a climate hostile to earmarks and tax increases in Congress mean the federal government won’t pick up the tab like it’s done since the 1950s, said David Goldberg, spokesman for Transportation for America, a coalition of national, state and local organizations to reform transportation funding.
“It is really hard to get these multistate projects done in an era of scarce resources,” Goldberg said. “It is almost inevitable that some larger share will come from state and local taxpayers. It may come in the form of tolls or from some other revenue.”
Many states are looking to local taxes for road projects, a USA Today report found. Virginia, Pennsylvania, Massachusetts and Michigan are considering tolls, higher sales taxes, new taxes on gas stations and higher motor vehicle registration fees to fund transportation projects. Oregon, Washington and Vermont have studied replacing or supplementing the gas tax with a tax based on miles traveled by car.
Counties and cities in California in recent years have passed local sales taxes and other taxes to fund large infrastructure projects, said Alison Premo Black, chief economist with the American Road and Transportation Builders Association.
Congress hasn’t raised the federal gas tax since 1993. The 18.4 cent per gallon gas tax buys 33 percent less than it did in 1993 due to inflation, according to the National Surface Transportation Infrastructure Financing Commission.
The state gas tax of 29.9 cents a gallon rises and falls annually with the price of gasoline based on a formula and goes into the state road fund. Both pools of money face competition from other projects around the state.
Lawmakers and residents remain resolute that tolls will do significant economic damage to Northern Kentucky. Many have argued that the situation in Northern Kentucky is the reverse of the two tolled bridges being built in Louisville.
There, the majority of the commuters cross the river from Indiana. In Northern Kentucky, most of the residents crossing the Brent Spence Bridge come from Kentucky. During morning rush hour, 63 percent to 65 percent of the local drivers crossing the bridge come from Kentucky, according to a study from the Ohio-Kentucky-Indiana Regional Council of Governments.
Some hope the findings in a $4 million study commissioned by Ohio and Kentucky to research different financing methods for the bridge will sway Northern Kentucky lawmakers to allow private financing for the bridge project.
“Waiting to complete the project will only drive up costs”, said Mark Policinski, executive director of the Ohio-Kentucky-Indiana Regional Council of Governments. “It is so important that we focus on what we need,” Policinski said.
Brent Spence Bridge idea tossed around -
Private financing sought, backers contend, since federal government won't give $2.4B
ERLANGER - Transportation and business officials made a pitch Tuesday to Northern Kentucky leaders to allow for private financing for the Brent Spence Bridge. Otherwise, the new Interstate 71/75 bridge won't get built before 2030, leaders with the Build Our New Bridge Now Coalition and the Kentucky Transportation Cabinet told a crowd at the Northern Kentucky Chamber's Eggs 'N Issues breakfast in Erlanger. The Northern Kentucky Chamber of Commerce has pushed for legislation in the Kentucky General Assembly for a public-private partnership to fund the $2.4 billion bridge project. But no legislator has come forward to sponsor such a bill, and many have said they oppose private financing that could lead to tolls. The federal government won't allocate $2.4 billion for the bridge or raise the federal gas tax to do it, proponents of private financing said Tuesday. That means either allow for private funds to pay for the bridge or wait for the bridge traffic in the region to fill area highways with gridlock, said Johnna Reeder, vice president of community relations and economic development with Duke Energy and chairwoman of the Build Our New Bridge Now Coalition. More than 120 businesses in Greater Cincinnati have joined the coalition to push for a financing plan for the bridge. With some private financing, the new bridge could be built by 2018, proponents have said.
ODOT director defends keeping turnpike under state control
Ohio Department of Transportation Director Jerry Wray acknowledged that leasing the Ohio Turnpike to a private company could have raised more money for the state but said in an open letter that issuing bonds against future tolls achieves two goals: Keeping the toll road under state control and raising needed funding for highway projects.
“While a strong majority of the bond money will be spent in northern Ohio, the plan will free up other funds to accelerate badly needed highway projects statewide – delivering more projects faster,” Wray said in a column sent to newspapers statewide.
Earlier this month, the state released the findings of a study of the toll road that concluded Ohio could have netted more than $4 billion by leasing the turnpike to a private entity over the course of 50 years, but Gov. John Kasich said the state instead would issue $1.5 billion in bonds against future toll revenue.
That funding will be used for projects in northern Ohio, where the turnpike stretches 241 miles east to west, and free up funding for projects in other parts of the state. The state also plans to freeze EZ Pass tolls at current levels for 10 years and cap other toll increases at the rate of inflation.
The state has delayed dozens of projects in the next three years, including Interstate 71 in Columbus and the city’s north Outerbelt, as it looked to fill a $1.6 billion funding gap.
Wray said in his column that the state’s plan would help it “take a bite out of Ohio’s highway budget deficit and dedicate approximately $1.5 billion for critical infrastructure projects.”
“This new program will provide vital transportation projects to keep Ohio’s economy moving forward,” he said. “Ohioans are looking to us to put aside any differences and work together to find innovative solutions to these critical needs.”
Columbus Business First
State can't spend Commercial Activity Tax money on non-highway projects
The state is unconstitutionally spending $140 million a year gleaned from the Commercial Activity Tax for non-highway purposes, the Ohio Supreme Court ruled today. The money has been allocated to local government, schools and other expenses. In a 6-1 ruling written by outgoing Justice Robert R. Cupp, the court found that how the state is spending the money violates the Ohio Constitution. The court did not invalidate the CAT tax, which replaced the state corporate franchise tax, nor did it apply the decision retroactively. Cupp said the constitution "explicitly prohibits the expenditure of revenue derived from excises on motor-vehicle fuel for any purpose other than highway purposes." He said because a section of state law "credits revenue collected from excise taxes on motor-vehicle fuel to purposes other than highway purposes, that provision of the CAT is unconstitutional." The decision involves a lawsuit filed against Ohio Tax Commissioner Joseph Testa by Beaver Excavating Co., other companies, and the county engineers from Ashland and Highland counties. The companies and officials argued that tax revenue from fuel sales can only be used for construction, repair and maintenance roads, not other purposes. That restriction became part of the Ohio Constitution by a voter-approved amendment in 1947. In 2005, the General Assembly passed a law replacing the franchise tax with the CAT. That tax is imposed on all businesses based on a portion of their gross receipts. Of the $2.3 billion a year in CAT revenues, about $140 million is derived from fuel sales.
The Columbus Dispatch
December 7, 2012
House Passes Continuing Resolution without MAP-21 Spending Levels
The House passed a six-month continuing resolution Thursday evening to fund the government until early 2013 -- without incorporating the transportation funding levels enacted in the new transportation bill, MAP-21. H.J.Res. 117, passed by a vote of 329-91, extends current discretionary appropriations through March 27 of next year. That extension, however, does not take into account the passage of MAP-21, in which transportation funding levels are slightly higher. American Association of State Highway and Transportation Officials Executive Director John Horsley sent a letter to both House Speaker John Boehner (R-OH) and Senate Majority Leader Harry Reid (D-NV), urging them to fully fund Highway and Transit programs with the same proportional funding increase available to most programs. "When you return following the November elections, and conclude action on Fiscal Year 2013 appropriations, we strongly urge you to honor the funding levels established in law by MAP-21, which merely maintain baseline funding for the first year," Horsley said. "Given the state of the economy and the critical need for jobs, we look forward to your positive response." Sen. Barbara Boxer (D-CA) also sent a letter to Speaker Boehner Tuesday to state her dissatisfaction that the CR's funding levels for transportation do not match those in MAP-21, claiming the loss of that additional funding could cost up to 17,000 jobs. "Congress made a commitment to the American people that we were going to invest in our nation's infrastructure at a time when our economy needs it the most. Congress cannot go back on that promise," she wrote in a letter. "The MAP-21 funding levels should be honored for fiscal year 2013. If the cut were to remain in the continuing resolution, it must be restored before any full-year transportation funding bill proceeds."
September 18, 2012
Tolls Considered For Road Projects Beyond Brent Spence
WASHINGTON -- Driving onto an Interstate highway? Crossing a bridge on the way into work? Taking a tunnel under a river or bay? Get ready to pay.
Growing Need For Funding Leading To More Toll Projects
May 24, 2012
With Congress unwilling to contemplate an increase in the federal gas tax, motorists are likely to be paying ever more tolls as the government searches for ways to repair and expand the nation's congested highways. Officials have said a toll is a potential funding source for a new Brent Spence bridge over the Ohio River.
Tolling is less efficient and sometimes can seem less fair than the main alternative, gasoline taxes. It can increase traffic on side roads as motorists seek to evade paying. Some tolling authorities - often quasi-governmental agencies operating outside the public eye - have been plagued by mismanagement. And some public-private partnerships to build toll roads have drowned in debt because of too-rosy revenue predictions.
Tolls are hardly a perfect solution. But to many states and communities, they're the best option available. "It's very hard in this environment for states to add capacity without charging a toll because they can't afford to do it," said Joshua Schank, president of the Eno Center for Transportation, a Washington think tank. "They're barely able to maintain what they've got, and there is an urgent need for capacity."
Some changes already are under way. In addition to the tolls allowed on Interstates in 15 states, mostly in the Northeast and Midwest, the U.S. has agreed to pilot toll projects on Interstate 95 in Virginia and North Carolina and on Interstate 70 in Missouri.
A commission created by Congress to recommend ways to pay for upkeep of the nation's transportation system predicted in 2009 that the U.S. will face nightmarish congestion unless it spends more. The commission estimated all levels of government were spending a cumulative $137 billion less each year than is necessary to maintain and expand the current system. Without action, there will be a $2 trillion-plus backlog by 2035, it said.
It's been nearly two decades since Congress last increased the federal gas and diesel taxes that have historically paid for highways. Meanwhile, the cost of road and bridge construction has gone up and the purchasing power of fuel taxes has declined by more than a third. Revenue is also down because people have been driving less due to the uncertain economy and because cars are becoming more fuel-efficient.
Federal and state fuel tax revenues peaked in 2007 at $72.4 billion, then dropped to $68.6 billion in 2010, the most recent year for which data are available. Meanwhile, state toll collections rose from $4.9 billion in 2000 to $8.9 billion in 2010, and locally administered tolls rose from $1.6 billion in 2000 to $2.5 billion in 2009.
The trust fund that pays for federal highway programs is forecast to go broke sometime next year, though the House and Senate are trying to negotiate a bill to shore up the funding and overhaul transportation programs. It's unclear whether they'll reach a deal, but if they do, it's likely to contain only a short-term financial fix. That means lawmakers will be back again, scratching for more.
Tolling is the easiest near-term way to pay the bills, says Robert Atkinson, who chaired the financing commission. "If you could allow modest tolling on Interstates, you could raise a lot of money," he said.
States want Congress to increase their ability to charge tolls and to allow them to use the money for a variety of transportation needs - not just upkeep of the roads where tolls are collected, said Eugene Conti, North Carolina's transportation secretary, at a Senate hearing last month. But states also have a history of slapping tolls on roads traveled by a large share of out-of-state motorists. When Pennsylvania applied to put tolls on Interstate 80, a route favored by truckers, the federal government rejected the plan partly because some of the money raised would have gone to support public transit in Philadelphia, even though the highway doesn't touch the city's metro area. In 2004, Chicago leased its Skyway, an eight-mile road and bridge, to a private toll operator for 99 years in exchange for $1.8 billion that was used to pay off city debt. The resulting toll increases fell heavily on Indiana commuters who use the road to get to jobs in Chicago.
Sen. Frank Lautenberg, D-N.J., has introduced a bill to give the secretary of transportation oversight of tolling practices. The financing commission made a similar recommendation.
What to do about tolling isn't addressed in the highway bill now before Congress because of a standoff earlier this year between senators who favor and oppose easing tolling on Interstate highways. The issue is expected to be revived next year after the retirement of Sen. Kay Bailey Hutchison, R-Texas, who has led the opposition to greater tolling.
One concern is that the Interstate system is aging, which means money must be found to repair and replace the roads.
"The roads are out there and we've paid off the mortgage, but that doesn't mean the system is paid for. ... Now the roads are crumbling and we have to upgrade them," said Patrick Jones, executive director of the International Bridge, Tunnel and Turnpike Association, which represents toll facilities.
Some relaxation of the ban is in the works. The Transportation Department has selected the three states - Virginia, North Carolina and Missouri - for pilot toll projects.
Despite concerns about more and higher tolls, it's difficult for lawmakers to tell state and local governments not to pursue greater tolling when Congress isn't providing a comparable alternative source of funds. Jones, of the tolling industry association, predicted that as traffic congestion worsens, people "are going to demand, 'We need better roads, we need more efficiency,' and they are going to ask for tolling and direct user fees to build the transportation that they need."
Ohio’s $1.6 Billion Highway Budget Shortfall: Where do We Go from Here?
Ohio’s highways are essential to keeping and creating new jobs. Our state’s economy—especially our agriculture and manufacturing businesses, and the logistics operations that support them—depend on the ability to quickly and efficiently ship raw materials and finished goods throughout Ohio, the country and the world, and our state’s transportation system makes it possible.
By Jerry Wray
Director of the Ohio Department of Transportation
This critical economic engine risks running out of gas. Funding for our highways is drying up and is not projected to keep up with our needs. In fact, the state’s highway budget faces a $1.6 billion shortfall, which will force high-priority projects to face serious completion delays.
While the news of the $1.6 billion highway budget shortfall came as a shock to some, it has been expected for several years by those in the transportation community. Unfortunately, little was done about it, assuming the funds would be found before the projected problem became reality. Well, here we stand today and we are facing a massive shortfall. This practice of not being straight about the depth of our highway funding problem is coming to an end. We have to honestly face up to the problem if we’re ever going to fix it and protect the job-creating tool that is our highway system.
The cause of the problem is simple: the recent economic decline combined with more fuel efficient vehicles that use less gas, inflation and a federal stalemate over a long-term, national transportation funding plan has left Ohio—and every other state—in a precarious position. The federal and state motor fuel taxes—Ohio’s primary highway funding source—are not raising as much money as they once did and are unable keep up with the rising costs of construction materials.
Just as Ohio did when we came together last year to close our state’s $8 billion state budget deficit, Ohio must come together to close our highway deficit. The basic reason is simple: we cannot pay highway construction workers with dollars that don’t exist. The bigger reason is, of course, unless we keep our roads in good shape and build new projects that boost job-creation—as well as safety and congestion relief—we won’t foster the jobs-friendly climate Ohio so desperately needs to get back on track.
The shortfall Ohio is facing now is very frustrating, and I’m sure we share the same frustration that every local mayor, county official, legislator, business leader and driver feels.
These problems aren’t insurmountable, not by a longshot. We can move forward and find the funds to keep Ohio moving if we have the courage to think in new ways.
A natural place to start is with ODOT’s own costs. We’re taking every conceivable step to reduce them. We’ve reduced our overhead and are using new ways to more efficiently and effectively build major projects faster than ever before.
Most important, however, is that we’re exploring entirely new strategies for building highways that break with the status quo and reflect a new way of thinking. We’re looking at ideas to utilize money from the private sector. We’re studying the potential of the Ohio Turnpike, and looking at all of the options from moving the operations under ODOT, to bonding against the turnpike’s revenue to a potential lease.
No matter what happens, there will be contractual guidelines on tolls and maintenance that will keep the road as strong as we know it today—or better. I welcome the upcoming debate and want to engage in the conversation with policy-makers at the federal, state and local levels that is long overdue.
Gone is pretending we don’t have a problem. We must take this opportunity to bring leaders to the table and work together to solve this problem.
Without a good transportation system we lose jobs and Ohio fades. By applying the same creative spirit for which Ohio is known, we can solve this problem and keep Ohio moving in the right direction.
For more information, contact: Steve Faulkner, ODOT Press Secretary, at 614-644-7101,
or your local ODOT District Communications Office
Contract to study Ohio Turnpike options worth $2.8 million for KPMG
The Columbus Dispatch
by David Eggert
Gov. John Kasich’s administration plans to pay KPMG Corporate Finance $2.85 million this year to study the possibility of leasing the Ohio Turnpike.
The consultant — which beat out 13 other proposals for the contract — will identify and evaluate a number of options, ranging from keeping the status quo to leasing the 241-mile toll road to a private company.
The contract was disclosed today in a request to the state Controlling Board, which will vote next Monday.
Fifty-seven percent of KPMG’s work will be done by four subcontractors, including the University of Toledo.
KPMG was chosen to do the first phase of what could be a three-phase project, depending on how state officials choose to proceed. Other KPMG tasks include assessing the physical condition of the turnpike, traffic data, rest-area concessions and parallel routes.
Ohio Department of Transportation Director Jerry Wray has said leasing the turnpike in northern Ohio could "dramatically boost" transportation funding in the state at a time when federal dollars appear unstable.
Critics of privatizing the turnpike have concerns about toll hikes, upkeep of the highway and how and where the proceeds of any lease would be distributed for local road projects.
State's roadwork delay will cost drivers
The Columbus Dispatch
by Robert Vitale
State government will spend less money in the short term by taking four times as long to rebuild overburdened highways in central Ohio.
You, however, will pay. Drivers will lose more time, waste more gas and face more hazards in coming years because the Ohio Department of Transportation is pushing back more than $840 million in roadwork that’s scheduled for the region.
What ODOT had planned to tackle between 2014 and 2016 now is to start in 2019 and at dates as far off as 2033.
Agency leaders say their list of major projects statewide is $11.6 billion too big for upcoming budgets, and they’ve ruled out raising Ohio’s gasoline tax of 28 cents per gallon to keep work on track.
The delays will cost Ohioans in other ways, experts say.
A study last year by TRIP, a transportation-research group based in Washington, D.C., estimated that Columbus-area drivers already spend an extra $835 a year because of inadequate roads. Almost $400 of that additional cost is the gas burned while stuck in traffic.
Central Ohioans waste twice as many hours in rush-hour backups as they did 20 years ago, another 2011 report said.
It is to be an additional 21 years before ODOT gets to the last scheduled phase of rebuilding the I-70/71 corridor through Downtown, if the agency’s Transportation Review Advisory Council approves the delays this spring.
Robert Lawler, transportation director for the Mid-Ohio Regional Planning Commission, said that will cost us, our businesses and the regional economy.
ODOT planned to rebuild Downtown highways because they handle twice as much traffic as they were engineered for and average more than two crashes per day. By the time future phases begin, traffic between the I-71/670 interchange and the I-70/71 split on the southwestern edge of Downtown will increase 21 percent or more, according to MORPC projections.
“We’re going to see more crashes and more delays,” Lawler said. “It’s an issue of capacity, but it’s also an issue of safety.”
It’s an issue around the country, too.
A congressional commission estimated in 2009 that state, local and federal governments spent less than half what was needed to maintain the nation’s transportation infrastructure and about a third of what it would take to improve it.
“When you have a system that’s 40 to 50 years old, it pretty much needs to be replaced,” said John Horsley, executive director of the American Association of State Highway and Transportation Officials. “There’s a huge backlog of replacement, maintenance and repairs that need to be done.”
However, ODOT Director Jerry Wray said past administrations in Ohio have promised too much.
ODOT placed $318 million in work on the calendar and put $2.4 billion in projects into the planning pipeline in 1997. By last year, $862 million in work was ready to go, and $10.2 billion was planned.
Wray said the state can afford just $100 million a year for major projects. He vowed to continue road maintenance, though.
How did ODOT get in such a bind? In the middle of the last decade, state officials and national experts say, trends began to turn bad.
“We were quite open about over-programming,” said Gordon Proctor, who ran ODOT from 1999 to 2007 under then-Gov. Bob Taft.
Projects are planned as much as a decade in advance, so estimates of the income needed to pay for them must be made well ahead of time, too, Proctor said. That makes over-programming necessary, in case more money becomes available than expected, and it makes delays part of the process.
Even as Wray criticized past planning, ODOT’s policy still is to pencil in up to 35 percent more construction spending than its budget allows.
Ohio pays for the work with the state gas taxes that drivers pay and with money that comes from Washington through the federal gas tax of 18.4 cents per gallon. As gas prices jumped and the economy declined in 2008, Americans bought less fuel. Gas-tax collections fell, and they haven’t recovered, in part because people also are buying more fuel-efficient vehicles.
In 2006, construction costs spiked 12 percent because of increasing demand for materials in China and India. Congress passed its last reauthorization of a federal highway-spending bill in 2005, and funding levels are frozen because lawmakers can’t agree on an update.
Governors and legislators in only a few states have broached the subject of raising gas taxes, said Horsley, of the transportation officials’ organization. Ohio’s last increase was approved in 2003.
No one is much in the mood to spend more, either, he said. In Washington, “you almost get thrown out of the room” when you bring up the gap between highway spending and infrastructure needs.
State Rep. Ross McGregor, R-Springfield, handles transportation-funding issues at the Statehouse for the House Finance and Appropriations Committee. He agrees with Gov. John Kasich’s call for the state to explore partnerships with private road builders and to consider using tolls for some new projects.
He also said that Ohio needs to join the discussion — after this election year is over, most likely — about finding ways other than the gas tax to pay for roadwork. email@example.com
State Falls Short on Roadwork $$
Bucyrun Telegraph Forum
by Jessica Alaimo
The Ohio Department of Transportation needs more money if it's going to put a dent in the list of necessary construction projects around Ohio, state officials say.
On Tuesday the department issued a list of projects that it currently has the means to fund -- and it painted a dismal picture, with some projects delayed for nearly a generation.
"If Ohioans are saying, 'We can't live with that,' we have to come up with additional revenue for construction projects," said state Rep. Jay Hottinger, R-Newark.
One of the areas receiving bad news Tuesday was Fairfield County, which found out that one interchange along U.S. 33 was delayed for 19 years, and another project was knocked off the list.
"Absolutely more revenue is needed to ensure long-term viability," said Holly Mattei, executive director of the Fairfield County Regional Planning Commission. "But how do we get there? It's a challenge everyone is trying to figure out."
The most talked about option thus far is to lease the Ohio Turnpike to a private entity.
In 2006, Indiana leased its toll road for 75 years to a Spanish-Australian investor group for $3.8 billion in cash up front. Gov. Mitch Daniels' administration is using that money to finance highway construction projects across the state.
"If we can generate billions of dollars in upfront money that we can use toward construction, that is something that will at least be considered," Hottinger said.
Rob Nichols, spokesman for Gov. John Kasich, said it is an issue that the administration is studying, but no decisions have been made.
"If it doesn't make financial sense, we're not going to do it," Nichols said.
Another option is to raise the state's fuel tax, which has been at 28 cents per gallon since 2005.
Ohioans used 29 million fewer gallons of fuel in 2011 than they did in 2001, according to the Ohio Department of Taxation.
"The money for these projects is a product of the gas tax...," said state Rep. Ross McGregor, R-Springfield. "The consumption of gas is declining, but you also are incurring an increase in the materials used for infrastructure projects."
McGregor chairs the Transportation Subcommittee within the House Finance and Appropriations Committee.
He says he would not support a hike in the fuel tax, nor would Kasich.
McGregor said one option may be to find a way for people driving alternative-fuel vehicles to pay their share, too.
However two other Republican lawmakers didn't completely dismiss the idea of raising the gas tax.
Hottinger said that while he has supported the gas tax in the past, "I clearly wasn't comfortable with the amount of revenue being spent on road construction in Ohio," he said.
But he doesn't see it flying in the current legislature.
"Gas prices are already ridiculously high, and have significant sways," Hottinger said.
State Rep. Rex Damschroder, R-Fremont, isn't ruling it out. He said the fuel tax is a use tax -- a way of paying for the roads you use.
Yet another option for the state is to enlist the help of private businesses to help build the roads.
But Nichols said businesses will expect a return on their investment.
This could mean more toll roads and bridges throughout the state, he said.
However, Damschroder said that could be an inequity to people who live along those toll roads, whereas with a fuel tax hike, "the whole state would share equally."
Ohio's construction projects may benefit from privatizing
Dayton Daily News
by Laura A Bischoff
COLUMBUS — Some of Ohio's largest road and bridge construction projects wouldn't have to wait decades if state leaders considered using private companies to build and operate transportation venues normally controlled by government, Ohio Department of Transportation officials said Wednesday.
ODOT got the green light in a transportation budget bill last year to use public-private partnerships to finance big projects. And the agency is considering privatizing 59 noninterstate rest stops and examining other ways to leverage state assets to generate cash, including leasing the Ohio Turnpike to a private operator.
Without an infusion of new funding, ODOT said this week, dozens of worthy projects would have to be delayed, including a year-long delay for the final phase of the Interstate 75 construction project in downtown Dayton and a two-decade-long delay for widening I-70 in Clark County. ODOT officials say there is no support for increasing gas taxes, which currently fund ODOT's
$2 billion budget.
"I think you're going to see things like P3 (public-private partnerships) initiatives pop up all across the state," said Dayton Area Chamber of Commerce Vice President Chris Kershner, who was appointed by Gov. John Kasich to the Transportation Review Advisory Council (TRAC), which is responsible for approving transportation project funding.
ODOT is paying Halcrow Group, an international consulting company, $750,000 to deliver a report on potential options later this year.
TRAC member Jack Marchbanks, a former ODOT deputy director, said public-private partnerships have been used in Great Britain, Canada and other U.S. states. Some deals have worked out well while others have not, Marchbanks said.
Dale Butland, spokesman for Innovation Ohio, a left leaning think tank in Columbus, said that the state needs to look at alternative funding but cautioned against deals that might lead to more tolls.
"There may be something to the public-private idea but it all depends on the way it is done," Butland said. "Ohioans don't want to be another New Jersey, New York or New England where you pay a toll every few miles to get almost anywhere."
The Kasich administration has embraced privatization of government assets as a way to get upfront cash for other projects. Last year, the state shifted its job creation duties to a new nonprofit organization, turned the keys to three prisons over to contractors, and gave the go-ahead to cities and universities to sell or lease their parking operations and other buildings to private companies.
Contact this reporter at lbischoff@ DaytonDailyNews.com.
ODOT Scraps I-76 Project
Akron Beacon Journal
by Rick Armon
A proposed, massive highway reconstruction along Interstate 76 in Barberton and Akron will be scrapped because there isn’t enough money available for transportation projects throughout Ohio, state officials say.
The Ohio Department of Transportation on Tuesday released a list of recommended construction work, noting that many significant and sought-after highway, bridge and road projects should be delayed years or, in some cases, more than 15 years because of a lack of cash. Some projects were dumped altogether.
The recommendations were made to the Transportation Review Advisory Council, a bipartisan group that approves funding for the state’s biggest transportation projects.
One of the largest casualties in the Akron area is the reconstruction of I-76 from State Road in Barberton to state Route 59 in Akron. That stretch includes the Kenmore leg.
The work, broken into three projects, also involved rebuilding the State Road interchange.
ODOT recommended abandoning that overall $305.2 million effort. Local leaders have been talking about the project for years.
“Unfortunately, this is Ohio’s new reality,” Ohio Department of Transportation Director and TRAC Chairman Jerry Wray said in a prepared statement. “For far too long, previous administrations have added more and more to the list of TRAC projects knowing that there were more projects than funds available.
“Their poor planning has put us in the position of making the tough decisions and delivering the bad news to many communities throughout the state that there simply is not enough money to fund their projects.”
The council received 72 applications last year for new transportation projects totaling nearly $10 billion. And there is already about $2 billion worth of planning and construction under way on other projects.
But, ODOT said, there is only about $100 million per year available to spend on new construction. The state agency must use the rest of its cash for ongoing maintenance of roads and bridges, officials said.
In addition to dumping the I-76 work, the council also recommending scrapping a proposed $22.7 million reconstruction of state Route 94 in Medina County.
The only Akron-area project still slated for construction involves rebuilding Mahoning Road in Stark County. That effort, however, has been delayed at least 14 years.
Several Akron-area projects were included on a “Tier 2” list, meaning they will receive some money for planning or engineering over the next couple of years. But they won’t see construction until 2036 at the earliest.
Those projects include the long-talked-about reconstruction of the I-76/Interstate 77/Main Street/Broadway interchange in Akron; rebuilding I-76/I-77 from the Central Interchange to Route 59 in Akron; adding lanes to state Route 18 in Medina Township; widening state Route 42 in Medina Township; and relocating U.S. Route 30 from Trump Avenue to state Route 44 in Stark County.
Other local projects affected were the proposed widening of I-76 from state Route 21 to State Street and modifying the I-76/Route 21 interchange. Local officials didn’t resubmit applications for those projects to be considered.
The Akron Metropolitan Area Transportation Study, which oversees transportation planning in the region, could not be reached for comment Tuesday.
ODOT, which is funded through gas taxes, is looking at other ways to increase its funding to pursue more projects, spokesman Steve Faulkner said.
Those options include adding tolls to highways, leasing the Ohio Turnpike and pushing more public-private partnerships, he said.
Rick Armon can be reached at 330-996-3569 or firstname.lastname@example.org.