Transportation Funding Challenges

In recent years, the uncertainty regarding federal funding for transportation has continued to rise. This pressure to keep funding for transportation stable has caused some states to implement other solutions. States such as Wyoming, Virginia, Maryland, and Vermont are increasing their excise or sales taxes on fuel in an effort to boost revenue for transportation needs. This newfound movement could prompt other states to follow suit through the willingness on the part of lawmakers to raise taxes related to transportation.

In an article recently published by Civil Engineering magazine, the authors examine why the funding for transportation has declined. It’s no surprise that because of the difficult economic conditions in recent years, many states have faced a series of challenges regarding transportation funding, including chronic gaps between investment needs and outlays, a growing need for transportation services, and less revenue from gas prices as motorists switch to vehicles offering greater fuel efficiency. As the article states, these factors combined have put states in a real bind, in terms of paying for their transportation needs.

Another contributing reason why transportation funding has become an issue is because of the stopgap of funding from legislation (known as the MAP-21 law) that occurred between the years of 2009 to 2012, therefore complicating efforts by the states to conduct long-range planning.  MAP-21 will provide stable funding through the fiscal year of 2014, but after that any certainty for states begins to fade.

Therefore, states are seeking to boost the transportation funding they receive from the federal government. The federal program has some stability right now in terms of being able to fund at the MAP-21 levels through the end of the next fiscal year.  However, there is a lot of uncertainty about how to keep the program going thereafter, so states are focusing on ways to go above and beyond what they can expect to receive from the federal government.

An example of this is shown as Wyoming has increased its taxes on gasoline and diesel fuels by 10 cents per gallon. The state has also enforced a law which also increases taxes on snowmobiles, off-road vehicles, and motorboats, which is expected to generate nearly $72 million additional revenue for the Wyoming Department of Transportation.

As other states have moved forward with enacting legislation to vamp their approach to funding transportation infrastructure, leadership by governors has proved crucial in increasing the overall goal in expanding transportation funding. As we examine our own state’s revenues dedicated toward transportation funding, following the examples led by Wyoming and other states could be necessary. The full article, “Transportation Funding Challenges Prompt States to Consider Gas, Sale Tax Increases” can be read in its entirety in the June 2013 issue of Civil Engineering magazine.

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