The road to a funding problem

Hank Hayes • Oct 29, 2015 at 6:00 PM

KINGSPORT — A three-member panel was like a pastor preaching to the choir Thursday by presenting the challenges of Tennessee’s transportation funding system to a room full of highway and local elected officials.

“The General Assembly is going to have to be convinced and the public is going to have to be convinced there’s a (funding) problem,” state Sen. Jim Tracy, the panel’s chair and chair of the Senate Transportation and Safety Committee, said at a field hearing held at the Kingsport Center for Higher Education.

Gov. Bill Haslam, during a similar series of hearings held across the state this year, has warned that state and federal revenues coming into the annual $1.8 billion Tennessee Department of Transportation budget aren’t keeping up with the state’s growth.

The Republican governor and others have pointed to a $6 billion backlog in unfunded state road projects.

A 2015 Tennessee Comptroller’s report on transportation funding agreed revenues are not expected to be sufficient to maintain current infrastructure, but made no recommendations.

Still, any moves to increase the state’s 21.4-cent gas tax or raise fees in the next legislative session might be political poison to lawmakers who face state elections in 2016.

That gas tax hasn’t gone up since 1989, but Tennessee has no road debt under its longtime pay-as-you-go policy.

Panel member Susan Mattson, principal legislative research analyst for the Comptroller’s Office, noted that as of 2010, Tennessee revenue per capita spent on highways was the lowest in the U.S., while its roads were rated as being of good quality.

A vehicle traveling 15,000 miles per year pays about $160 in state gas taxes, she said in her presentation.

“(But) under the federal fuel efficiency standards ... the average mileage for new vehicles is expected to go from about 30 miles per gallon to up to 50 miles per gallon in 10 years,” Mattson pointed out. “That’s going to reduce the fuel in use and, thus, our user revenue.”

The range of options to increase revenue, she said, includes a fuel tax increase, imposing a “user pays” system to include out-of-state vehicles, increasing motor vehicle registration fees, local option highway taxes, debt financing and applying the sales tax to fuel purchases.

Panel member Bill Moore, former TDOT chief engineer and chairman of the Tennessee Infrastructure Alliance, described the main unfunded Kingsport area needs, which included five road projects valued at a total of $147.7 million.

The biggest, said Moore, is the $48.6 million unfunded first phase of the State Route 126 upgrade project from East Center Street to east of Cooks Valley Road.

Compounding the problem, the panel argued, has been Congress’ inability to pass a long-term bill funding the Federal Highway Trust Fund.

Money from that fund comes to the states, but TDOT said it was forced to delay $400 million in road projects this year because of “funding uncertainty” from the Federal Highway Trust Fund.

This year, seven states — Georgia, Idaho, Iowa, Nebraska, South Dakota, Utah and Washington — passed legislation to increase gas taxes, while Kentucky and North Carolina altered the structure of their taxes in order to limit decreasing revenues, according to the National Conference of State Legislatures.

Tracy, R-Shelbyville, concluded lawmakers want to know how much time they have to reach a solution.

“We’re going to need your help if you’re a road superintendent or if you are citizens in the state of Tennessee and are concerned about safety,” Tracy told those assembled inside the Higher Education Center auditorium. “Anytime we have (road) congestion, it’s costing money to our citizens ... I think we’ll have to deal with the problem quickly. I don’t see us borrowing any money to do that.”

For more about Mattson’s presentation go to www.comptroller.tn.gov/OREA/.

For more about Moore’s presentation go to www.transportationcoalitiontn.org.

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