State officials search for transportation funding fixes

In the lead-up to legislative work that will commence early next year, a mix of transportation funding solutions are being pursued in states across the country.

Possible methods to address transportation funding crunches include borrowing, increasing existing revenue sources and creating new sources of revenue.

Connecticut

Connecticut Gov. Ned Lamont last week announced plans to increase borrowing to help get work done to rebuild the state’s transportation infrastructure.

The governor’s administration has projected the state will sell $1.3 billion in bonds to pay for transportation work over the next year. Another $1.4 billion in bonds are expected to be sold the following year.

The projections are at least 30% higher than the $1 billion in bonds the state is expected to issue this year.

Connecticut regularly uses bonds and federal grants to pay for nearly all highway, bridge and rail work.

The announcement comes as the state faces a $6.7 billion transportation bonding backlog.

Outside of bonding, the governor’s plans to benefit transportation work have been met with resistance. Early in his term, Lamont attempted to implement a truck-only toll. He dropped his campaign pledge to toll trucks after state lawmakers refused to get on board.

The state later adopted a highway use tax. Since January 2023, the tax has applied to class 8 and above commercial vehicles.

Oregon

Oregon officials have said something needs to be done during the 2025 regular session to address transportation funding.

Inflation has resulted in rising road costs, and the gas tax rate – the main source of money for state and local roads – is not indexed to inflation. As a result, the excise tax is hard pressed to keep pace with funding needs.

Factors further complicating the decline of road revenue include more fuel-efficient vehicles and electric vehicles.

Early this year, the Oregon Department of Transportation warned that without a radical funding fix in place by 2027, the state will be forced to go without repairs to any roads that are not a federal interstate. The agency said an extra $1.8 billion yearly is necessary just to make repairs.

To compound matters, a new study from the Association of Oregon Counties shows that the state needs $834 million annually to maintain local roads and bridges.

The Legislature’s Joint Transportation Committee received the bad news during a fall presentation.

Counties are responsible for the largest share of the upkeep for the state’s road system. The federal government covers the second-largest share, while cities come in third and the state is responsible for the remainder of Oregon roads.

Another revenue source for the state is in question. A weight-mile tax levied on commercial drivers is the subject of a lawsuit filed by the Oregon Trucking Association and three motor carriers.

Tennessee

A flat transportation revenue stream from fuel tax collection is also receiving attention from the Tennessee Department of Transportation.

The agency has requested more than $300 million from the state budget just to keep up with rising costs for maintenance and construction. One-third of the revenue would come from existing expenses, and the rest would come from non-recurring costs.

TDOT’s plea follows a 2023 transportation law to tackle transportation needs throughout the state. The $3.3 billion bill included authorization for the agency to pursue public-private partnerships.

A plan later unveiled by TDOT allows the state to put money into four toll lane projects that would be separate from general lanes.

Tabbed as “choice lanes,” the state would permit vendors to construct and operate new lanes and collect tolls from travelers who choose to use them. Existing lanes would continue to be available for free.

A toll project on Interstate 24 between Nashville and Murfreesboro is under environmental review. The next step is to get additional public input before a design plan is finalized and bids for the project are accepted. LL

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