Road­work gas tax ahead?

The Columbus Dispatch - - Front Page - By Jim Siegel

Ohio’s money for new ma­jor projects is gone

Ohio leg­is­la­tors and the in­com­ing Dewine ad­min­is­tra­tion will start off the new year star­ing down a huge trans­porta­tion-bud­get prob­lem: The state has run out of money for ma­jor new road-con­struc­tion projects.

State rev­enue for road and bridge con­struc­tion is trend­ing in the wrong di­rec­tion, and the prospect of sig­nif­i­cant de­lays in ma­jor projects has prompted the for­ma­tion of a coali­tion that will push pol­i­cy­mak­ers to find new trans­porta­tion money, par­tic­u­larly through an in­crease in the state gaso­line tax.

The sta­tus quo means no money for ca­pac­i­ty­build­ing projects await­ing fund­ing. Those in­clude

im­prove­ments to the In­ter­state 270/In­ter­state 71/ Route 23 area on the South Side, im­prove­ments to In­ter­state 70 ramps at I-270 and at Brice Road on the Far East Side, the I-71 in­ter­change with Routes 36 /37, and re­con­struc­tion of I-70 and I-71 Down­town.

Parts of the I-71/I-70 work that is un­der­way will con­tinue, but fu­ture phases are not funded; those in­clude an east­bound in­ter­change, re­con­struc­tion of I-71 from Broad Street to Main Street, and work on the in­ter­change with Route 315.

The Ohio De­part­ment of Trans­porta­tion’s con­struc­tion con­tracts, which in­clude fund­ing for pot­holes, paving, snow plow­ing and bridge main­te­nance, to­taled $2.4 bil­lion in 2014 but are set to drop to $1.5 bil­lion in 2020. Local of­fi­cials also have been warned about a 14 per­cent cut in state dis­cre­tionary fund­ing for 2021.

“It hits cen­tral Ohio harder be­cause we’re grow­ing and a lot of the state is not, so we have more peo­ple we have to ac­com­mo­date,” said Wil­liam Mur­dock, ex­ec­u­tive di­rec­tor of the Mid-ohio Regional Plan­ning Com­mis­sion.

MORPC has about $25.8 mil­lion in fed­eral fund­ing but $180 mil­lion in re­quests around cen­tral Ohio that can­not be funded, Mur­dock said. Plus, it has $29 mil­lion in pub­lic-works dol­lars for Franklin County to ad­dress $50 mil­lion in re­quests. He called the pro­pos­als “bread and but­ter” projects.

With­out new rev­enue, MORPC re­ports, the re­gion will get $89 mil­lion less in trans­porta­tion fund­ing than ex­pected through 2025.

Cen­tral Ohio faces state road-fund­ing short­ages as it is work­ing on next-gen­er­a­tion projects such as smart mo­bil­ity in­fra­struc­ture and the Hyper­loop, Mur­dock said. The Hyper­loop is de­signed to move peo­ple or freight at hun­dreds of miles an hour through a vac­uum tube.

“We’re con­cerned that if we can’t take care of the ba­sics, then how are we go­ing to get to the more so­phis­ti­cated things we need to do to com­pete with other states and com­pete for busi­nesses?” he said.

The root of the prob­lem, coali­tion leaders say, is twofold: Ohio’s 28-cent gas tax has not in­creased since 2005, and $1.5 bil­lion in turn­pike bond fund­ing that was ap­proved in 2013 has run out.

Dean Rin­gle, ex­ec­u­tive di­rec­tor of the County En­gi­neers As­so­ci­a­tion of Ohio, said some of­fi­cials have wanted to wait for the fed­eral gov­ern­ment to come up with a trans­porta­tion so­lu­tion, “but that’s not very re­al­is­tic at this point.”

“Just about ev­ery state sur­round­ing Ohio has taken mat­ters into their own hands,” he said. “Ohio, just to be com­pet­i­tive, needs to do that.”

A coali­tion called Fix Our Roads Ohio (FOR Ohio) has formed to stress to law­mak­ers and the pub­lic the ur­gency of the prob­lem while push­ing po­ten­tial so­lu­tions, in­clud­ing a gas-tax in­crease. The group in­cludes local gov­ern­ments, local chambers of com­merce, con­trac­tors, county en­gi­neers and truck­ers.

“If some things aren’t done, and done rel­a­tively soon, Ohio’s go­ing to be fac­ing a real prob­lem here,” said Curt Steiner, a se­nior ad­viser to the coali­tion. As a for­mer chief of staff for Gov. Ge­orge V. Voinovich, he un­der­stands the po­lit­i­cal dif­fi­cul­ties that come with ask­ing elected of­fi­cials to in­crease taxes and fees.

“The big­gest con­se­quence is that while some main­te­nance will con­tinue to happen, many of the projects that are planned for new con­struc­tion are just not go­ing to be started,” he said. That, he ar­gued, will in­crease congestion and re­duce con­struc­tion em­ploy­ment.

The last time the state faced a trans­porta­tion-bud­get short­fall — a $1.6 bil­lion hole that threat­ened to push back by decades some of the state’s largest trans­porta­tion projects — Gov. John Ka­sich an­nounced in De­cem­ber 2012 a $1.5 bil­lion plan to is­sue bonds against fu­ture turn­pike toll rev­enue.

That in­fu­sion of money meant that fund­ing for ma­jor new road projects av­er­aged $555 mil­lion per year from 2014 to 2017.

But that bond­ing money is gone. And with­out new rev­enue, the Ohio De­part­ment of Trans­porta­tion ex­pects ma­jor-project fund­ing of just $20 mil­lion in 2020 and $15 mil­lion by 2021 — enough to cover po­ten­tial cost over­runs on current projects, but nothing else. That is on top of con­cerns that the state also will not keep up with main­te­nance costs.

“Our trans­porta­tion sys­tem doesn’t de­grade like turn­ing off a light switch. You need to stay on top of it,” said Christo­pher Run­yan, pres­i­dent of the Ohio Con­trac­tors As­so­ci­a­tion.

Gov.-elect Mike Dewine is aware of the prob­lem, and leg­is­la­tors cer­tainly shouldn’t be sur­prised.

In the two-year trans­porta­tion bud­get passed in 2013, GOP leg­isla­tive leaders in­cluded the cre­ation of a joint leg­isla­tive task force to study trans­porta­tion fund­ing. Two years later, when Repub­li­can Rep. Terry Boose of Norwalk called the turn­pike bond­ing a “Band-aid,” leg­is­la­tors again used the trans­porta­tion bud­get to cre­ate a joint leg­isla­tive task force to study trans­porta­tion fund­ing.

The sec­ond task force is­sued an un­der­whelm­ing nine-page re­port in De­cem­ber 2016 — one year past its dead­line — list­ing sug­ges­tions from a num­ber of groups and urg­ing that ideas be dis­cussed in fu­ture bud­gets.

That fu­ture is here. Dewine will in­tro­duce a trans­porta­tion bud­get in Fe­bru­ary.

But first, an­other study is likely. In July, Dewine told the Ohio As­so­ci­a­tion of Regional Coun­cils that he plans to ap­point a blue-rib­bon com­mis­sion to “come back with a quick as­sess­ment about where we are on in­fra­struc­ture and come back with rec­om­men­da­tions” on how to fund a fix.

“We’ll then open dis­cus­sion with the peo­ple of Ohio,” he told the group.

Al­though the FOR Ohio coali­tion is in­ter­ested in see­ing Dewine’s ideas, mem­bers say the ob­vi­ous and most likely an­swer, es­pe­cially in the short term, is well known: a gas-tax hike.

The coali­tion is push­ing for a not-yet-spec­i­fied in­crease in Ohio’s 28-cents-per­gal­lon tax, which was last in­creased in 2005 by 2 cents per gal­lon. Nearly 10 cents per gal­lon of that tax goes to local gov­ern­ments.

A num­ber of states have in­creased their gas taxes since that time. Penn­syl­va­nia in 2013 linked its tax to gaso­line prices, nearly dou­bling its tax per gal­lon.

Ohio’s 28-cent rate is about 6 cents lower than the na­tional av­er­age, and lower than that in four of the five neigh­bor­ing states: Penn­syl­va­nia (59 cents), Michi­gan (44), In­di­ana (43) and West Vir­ginia (36). Ken­tucky’s rate is 26 cents.

A 1-cent in­crease in Ohio raises about $70 mil­lion. As lower gas prices en­cour­age peo­ple to drive more miles, the gas tax is ex­pected to col­lect $1.2 bil­lion in 2021, a roughly 10 per­cent in­crease over 2014.

But in­dus­try ex­perts say the 28-cent rate to­day has 35 per­cent less value than it did in 2005 be­cause of in­fla­tion — a re­duc­tion masked by the short-term turn­pike bond­ing.

Keary Mccarthy, ex­ec­u­tive di­rec­tor of the Ohio May­ors Al­liance, said nearly half of Ohio’s largest cities al­ready have back­logs in their paving pro­grams, a prob­lem that started with the Great Re­ces­sion.

“If we don’t do any­thing go­ing for­ward, it’s go­ing to be a ma­jor set­back for the next gen­er­a­tion, and it’s go­ing to cre­ate huge set­backs in the growth curve we’ve seen in a lot of cities across the state.”

The coali­tion notes that ODOT, for the fis­cal year that ends July 1, de­layed 19 bridge-main­te­nance projects to­tal­ing $156 mil­lion. This, said Run­yan of the con­trac­tors’ as­so­ci­a­tion, com­pounds the prob­lem by adding even more projects next year to a list that al­ready was un­der­funded. Bridge re­pair and re­place­ment is set to go from $297 mil­lion in 2017 to $189 mil­lion in 2021, a de­cline of more than one-third.

“Ev­ery­one knew this prob­lem was com­ing up,” Run­yan said. “Po­lit­i­cally, it’s a very un­com­fort­able is­sue to have to dis­cuss be­cause of the rev­enue gen­er­a­tion that it man­dates. But we’re get­ting to a point where the rev­enue curve is so far be­low the needs curve that we’re never go­ing to catch up.”

The FOR Ohio coali­tion also would like to see fu­ture gas-tax in­creases in­dexed to in­fla­tion. Ohio’s gas tax rose with in­fla­tion from the early 1980s through 1993, when law­mak­ers put an end to that.

The coali­tion also would like to join 20 states, in­clud­ing Michi­gan, In­di­ana and West Vir­ginia, that have en­acted elec­tric-ve­hi­cle fees. Ohio has an es­ti­mated 15,000 elec­tric and hy­brid ve­hi­cles, and the coali­tion views im­pos­ing fees as a mat­ter of fair­ness, re­quir­ing all driv­ers to con­trib­ute to road main­te­nance.

The group also plans to ad­vo­cate for more pub­lic­tran­sit fund­ing. Ohio ranks 47th in per-capita pub­lic­trans­porta­tion fund­ing. Again, this is not a sur­prise prob­lem: ODOT re­leased a study four years ago say­ing that fund­ing needed to dou­ble to keep up with needs.

Out­go­ing state Bud­get Di­rec­tor Tim Keen said that count­ing state and fed­eral money, plus more than $300 mil­lion a year gen­er­ated by ve­hi­cle reg­is­tra­tions, local ju­ris­dic­tions have had sub­stan­tial road rev­enue — about $1.5 bil­lion in re­cent years.

“That is of­ten lost in this whole dis­cus­sion,” he said.

“Clearly, the turn­pike bond­ing has pro­vided for the abil­ity to fund a lot of projects over the last six years that we might not have been able to do,” Keen said. That op­tion prob­a­bly won’t be avail­able for Dewine un­less he raises turn­pike tolls.

Keen rec­og­nizes that with­out more rev­enue, there is no money for ad­di­tional ma­jor projects.

“This is a reg­u­lar story. We need more money to do these things.”

[email protected]­patch.com @phront­page

[FRED SQUILLANTE/DIS­PATCH]

Traf­fic heads south on In­ter­state 71, as seen from the Broad Street bridge on Fri­day. Re­con­struc­tion of I-71 from Broad Street south to Main Street is among the fu­ture phases of I-71/I-70 Down­town im­prove­ments that are not funded.

[DIS­PATCH FILE PHOTO]

Traf­fic heads north on In­ter­state 270 in Hil­liard in April, as seen from David­son Road bridge.

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