States Act to Fix Transportation Infrastructure While Federal Funding Bill Remains Elusive

By Nathan Devers | March 20, 2015


Federal lawmakers are again struggling to find consensus on a long-term transportation funding bill, with the current version set to expire on May 31. Another temporary patch is being considered, even as both parties continue to express the desire to pass a multi-year bill. This comes as Transportation Secretary Anthony Foxx continues to warn that temporary patches are not adequate solutions to keeping the Highway Trust Fund solvent. The uncertainty caused by Federal inaction may require states to delay, postpone or even cancel infrastructure projects.

In light of continued Congressional gridlock, many states are looking for their own transportation funding solutions. The 2015 legislative calendar has seen states introduce and debate funding proposals that raise vehicle fees, increase fuel and excise fuel taxes, and even dedicate a portion of marijuana taxes to the state transportation trust fund.

Iowa found early success this session, already passing a bill that garnered Governor Terry Branstad’s signature. The bill increases fuel taxes by ten cents-per-gallon and raises vehicle permit fees. These measures are projected to raise $215 million annually for roads and highways. The Des Moines Register broke down the math articulating how this will affect Iowans’ pocketbooks. The paper stated that “for a person who drives 15,000 miles a year in a vehicle that gets 25 miles-per-gallon, the higher fuel tax would cost an additional $60 annually, or an average of $5 a month.”

South Dakota passed its own funding fix with a comprehensive bill. One measure increases the fuel tax on gas and diesel by six cents-per-gallon, raising an estimated $40.5 million annually. Another measure increases the state's motor vehicle excise tax by one percent, which will generate $27-$30 million annually. Additional measures include increasing license plate fees by 20 percent and allowing counties and townships to impose additional property taxes on roads and bridges. This effort will produce more than $80 million for road and bridge funding in the first year alone.

Some state lawmakers are introducing unique proposals for raising money outside of the usual taxes and fees imposed on fuels and vehicles. New Jersey State Senator Nicholas P Scutari introduced a bill that seeks to legalize marijuana as a way to help pay for transportation projects. The bill would levy a sales tax on marijuana purchases, and dedicate 70 percent of the revenue to the Transportation Trust Fund Account. The funds are to be used for construction of transportation projects during the fiscal year in which the funds are received. While this particular bill appears to be at a standstill, it highlights the fact that creative and alternative solutions are being pursued at the state level. As transportation planners anxiously await a long-term bill from the U.S. Congress before the looming deadline, states continue to churn out – and actually pass – legislation designed to enhance our transportation infrastructure.

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