Federal funding uncertainty affects transportation planning, study finds

Abstract

States, metropolitan planning organizations and regional governments rely on federal money, but they don't know from year to year when the money will arrive, how much they'll get or what rules they'll have to live by. States vary in the use of their own funds to make up for shortfalls or delays in federal aid. The report points out that "The availability of non-federal transportation revenue, asset condition, and the size of the state roadway network have a fundamental influence over the extent to which states and regions are sensitive to federal funding uncertainty." States with more access to nonfederal dollars for transportation infrastructure, transportation assets in better condition, and a less extensive public highway network were less sensitive to the uncertainty. "States may need to manage federal revenue reductions if the current motor fuel tax rate remains unchanged, particularly if coupled with parallel revenue reductions in state fuel tax receipts," it states. Program researchers did in-depth case studies in six states after talking to staff from 17 state and regional transportation departments and planning agencies to see how states and regions cope with the funding uncertainty. Some 37 states have raised gasoline taxes in the last decade and, "While the price of gasoline goes up, the percentage of tax revenue doesn't go up" as taxes are usually a set rate per gallon, not a percentage of the purchase price, said Susan Howard, director of policy and government relations for the American Association of State Highway and Transportation Officials. As gas prices rise, "People are making different choices about how much they drive. How that will affect revenue will be interesting to see." Several states have recently declared gas tax holidays to help motorists cope with high prices, "But suspending a gas tax doesn't always get the savings passed on to consumers," she cautioned.