Gas Taxes Aren’t Keeping Up With Highway Funding Needs

In Perspectives by Joe Sullivanleave a COMMENT

OPINION_0903_GasTax1With the price of gas heading below $2 a gallon, it’s hard to fathom why Congress and the state aren’t seizing the moment to tack a few pennies onto gasoline taxes to cover an ever-mounting shortfall in highway and other transportation funding.

Both the federal and state gas tax have sat still for more than 20 years. And while there a lot more motorists on the road driving a lot more miles, revenues have barely increased because of increased fuel efficiency. Over that same span, highway construction and maintenance costs have doubled and then some, according to TDOT’s deputy commissioner and chief engineer, Paul Degges. “Where you used to be able to repave a two-lane road for about $35,000 a mile, it will probably cost about $100,000 now,” he says.

While the state remains totally dependent on fuel-tax revenues for its roughly $800 million a year in highway outlays, Congress has at least attempted to address the inadequacy of the $35 billion a year going into the Highway Trust Fund. By hook and crook, it’s managed to come up with some $15 billion a year in supplemental funding from a motley array of unrelated sources, typically for the very short run. Indeed, the last thing Congress did before recessing for the month of August was to authorize a three-month extension to prevent all funding from coming to a halt.

But with nothing approaching an agreement on any longer-term funding source anywhere in sight, uncertainties abound about whether and when the state will get any more money from Washington come fall. Tennessee’s annual allotment of about $900 million in federal money typically pays for 80 percent of construction costs on state as well as national highways (with a 20 percent state matching requirement).

As Degges explains it, once work is underway on a project that could take three years to complete, TDOT gets its reimbursements from the Federal Highway Administration in arrears and thus runs the risk of stoppages.

“Every month the contractor turns in an invoice to us, and we turn around and bill the FHWA,” he says. “So if the FHWA quits paying me, I would have to tell my contractors to go home, and they will be able to sue me because I’ve delayed their work.”

While TDOT has managed to build up cash reserves that minimize this risk on the 540 contracts totaling $2.7 billion that are presently underway, it’s meant delaying work on some $400 million in new projects that were due to start this year. Among them: $28 million for safer access and widening of Alcoa Highway between Woodson and Maloney and $9 million for improvements to the I-640/Broadway interchange.

Barring a debacle in Washington, Degges believes work on these two projects can begin next year. But projects on which construction had been due to start in 2016, such as the widening of a constricted section of Western Avenue between Major and Texas avenues, is due to get pushed back at least another year. So will other sections of Alcoa Highway work that’s due to extend from Cherokee Trail to the airport. Much-needed safety improvements to Chapman Highway don’t even have a timetable.

To be sure, a number of construction projects in Knox County are moving ahead or nearing completion. These include work on Oak Ridge Highway, Emory Road, Maynardville Highway, Tazewell Pike, and the Halls Connector. And let me be clear that I’m not someone who favors building brand-new highways that cut a swath through the remaining countryside. I cheered when the billion-dollar I-275 bypass through Hardin Valley and the $100 million extension of James White Parkway through South Knox got nixed.

A majority of the state’s roughly $800 million in highway funding goes for maintenance, including a 40 percent share that’s distributed to cities and counties.

The state is responsible for maintaining “any highway with a number on it” as Degges puts it; the localities are responsible for their local streets. Bridge replacements can get state and federal assists wherever they are situated.

Speaking as someone who’s become acutely conscious of all the bump and grind on I-40 as well as local streets since last winter’s ice storm, an acceleration of repaving can’t come soon enough. “Bumpy roads are not only a nuisance, if not a hazard, they also increase the wear and tear on automobiles. So you have a diminished quality of life issue,” Degges says.

Our Sen. Bob Corker and Gov. Bill Haslam have been out front in calling for gasoline tax increases that can rectify these shortcomings—though Haslam hasn’t quite said so yet. Unfortunately, they don’t yet appear to have much of a following either in Washington or Nashville.

While there’s near-universal agreement that more highway funding is needed, state legislator calls for tapping this past fiscal year’s $386 million state surplus is just a short-term fix, akin to the kick-the-can-down-the-road approach that Congress has taken for the past several years.

What’s needed is a long-term solution. Raising the 18.4-cent federal and 21.4-cent state tax rates by 10 cents each would provide one. And it would cost motorists less than a fifth of what they are saving at the pump as the price of gas has dropped by more than a dollar a gallon over the past year.

Joe Sullivan is the former owner and publisher of Metro Pulse (1992-2003) as well as a longtime columnist covering local politics, education, development, business, and tennis. His new column, Perspectives, covers much of the same terrain.

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