Tag Archives: transportation funding

Fixing The Massive Leak In America’s Transportation Funding System

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Imagine you discovered your salary was going to be steadily declining in the coming years, making it impossible for you to fund future needs. Would you shrug off this news, and passively accept the associated damage, or shift to a more stable source of income?

When it comes to the funding needed to build and maintain the nation’s roads and bridges, policymakers are facing a similar threat, and most of them are shrugging it off.

The Problem

Currently, we finance much of our transportation infrastructure with a state and federal gasoline tax, where the more gasoline we use, the more we contribute to building and maintaining the transportation infrastructure.  For a long time, the gas tax has served us well.

Cursor_and_hqdefault_jpg__480×360_But the gas tax is becoming obsolete. Here’s why:  Between 2008 and 2014, the average fuel efficiency of new cars increased by 22%. In coming years, new fuel efficiency regulations and technological improvements will accelerate that progress. As as result, by 2040 the U.S. Energy Information Administration (EIA) projects that fuel sales will decrease by between 34% and 45%.  The less gasoline we use, the less we have for building and maintaining our transportation infrastructure.

“Just raise the gas tax,” you say?  Well, a paper recently written by transportation finance expert Ed Regan estimates:

“If governments want to still generate equivalent revenue to keep up with future travel levels, gas tax rates will need to be increased to as much as $1.16 per gallon to overcome the effect of future fuel efficiency.”

Given how politically difficult it has proven over the years to increase the gas tax by even a few pennies, an increase of that magnitude would seem to be politically impossible.

Even if passing such a huge increase were somehow politically feasible, we would be left with a grossly unfair system where some can avoid, quite legally, paying their fair share for funding roads and bridges.  (By the way, as someone who has driven a gas-electric hybrid for a decade, I’m one of those people unfairly benefiting from the gas tax status quo.)

If we don’t enact a steep gas tax, Regan has alarming numbers for policymakers and citizens to ponder:

By 2025, just 8 years from now, increasing fuel efficiency may cost state and federal coffers as much as $20.8 billion per year in fuel tax revenues.

Twenty-one billion dollars is a lot of road and bridge projects.  Clearly, stubbornly clinging to the gasoline tax status quo would dramatically impact our safety, global competitiveness and quality-of-life.

Yes, the Trump administration is proposing to roll back fuel efficiency standards. But many experts believe this will have only a limited effect on the trend toward greater fuel efficiency and use of non-gasoline powered vehicles. CNBC reports:

Trump’s bid to ease fuel efficiency rules will be tough and likely limited, experts say:

The White House’s attempts to alter the Obama administration’s plan to raise federal automobile fuel standards could be a slog and ultimately yield little change, experts say.

The Department of Transportation and the Environmental Protection Agency will revisit rules finalized under President Barack Obama that would keep automakers on pace to manufacture vehicles that get more miles per gallon. But experts say it will be difficult for President Donald Trump to meaningfully relax the rules under the Corporate Average Fuel Economy standards, or CAFE.

Whether driven by consumer demand, regulations or both, the march towards greater fuel efficiency seems inevitable.  The Trump fuel efficiency changes may slow the march, but they won’t stop or reverse it.

The Solution

The most logical solution to this increasingly urgent problem is to charge users based on distance traveled rather than gasoline used. Under such an approach, transportation funding would be much more adequate and stable than it is with the gas tax.

Cursor_and_410132__1600×1067_But in the stodgy world of transportation finance, old habits die hard. Charging based on distance requires a very different type of revenue collection system, and such a change is proving to be mind-bending for many policymakers.

Fortunately, at the state level various approaches are being piloted, evaluated and refined. For instance, one approach being tested with 5,000 volunteers in California gives users a range of choices for collecting a “Road User Charge.”  Volunteers can choose to track distance by using 1) a small electronic device, called a “dongle,” plugged into their vehicle, 2) a smart phone photo of their odometer sent to authorities on a monthly basis, or 3) other more low-tech tracking methods.

Moving to this type of distance-based system won’t come without headaches or expense. But everything is relative, and accepting the hassles associated with this transition is a small price to pay for avoiding a transportation infrastructure meltdown.  With as much as $21 billion in transportation funding about to disappear over just the next eight years, and much more about to disappear in the coming decades, policymakers can no longer afford to shrug off this problem.

Note:  I have done public relations work on this issue for an academic client, but the views expressed are my own.

Dirty Job Dayton Dusts Himself Off

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Dayton_dirty_2Governor Mark Dayton is Minnesota’s political version of Mike Rowe, the star of the Discovery Channel television show “Dirty Jobs.” Rowe’s show is all about him taking on difficult, disrespected and grotesque jobs that others avoid, such as being a sewer inspector, road kill scavenger, worm dung farmer, shark repellent tester, maggot farmer, and sea lamprey exterminator.  Who knew that worm dung needed farming?

Dirty Job Dayton

Governor Mark Dayton may not be farming worm dung, but consider just a few of the filthy tasks Dirty Job Dayton has already embraced in his five year’s in office.

Taxing Most Powerful Minnesotans.  Before Dayton, non-partisan analyses were showing that the wealthiest Minnesotans were not paying their fair share of taxes.  So Dayton ran for Governor unabashedly championing tax increases on the state’s most wealthy citizens, which earned him some very powerful enemies. At the time, progressive political consultants considered advocating almost any kind of tax increase political suicide for candidates. But Dayton ran on a platform of large tax increases, won a razar thin victory at the polls, and then promptly passed the tax increases into law as promised.

Implementing Unpopular Obamacare.  Dayton wasn’t done there. One of his very first acts of Governor was to champion Obamacare, which many politicians were extremely nervous about at the time. In contrast to his fellow Governors in neighboring Wisconsin, Iowa and South Dakota, Dayton embraced Obamacare’s Medicare expansion to cover 35,000 of the most vulnerable Minnesotans.   The Governor had Obamacare protesters shouting him down in his announcement news conference, but he let them have their say and stuck to his principles without looking back.  As a result of taking on a number of controversial Obamacare implementation tasks, Minnesota now has the second best rate of health insurance coverage of any state (95%).

Resolving Vikings Stadium Quagmire.  Then there was the Vikings Stadium debate that had been festering for almost a decade before Dayton came to office. Despite polls showing that subsidizing the stadium was unpopular, Dayton provided active backing for legislation to publicly subsidize the Vikings Stadium.  While noting that he is “not one to defend the economics of the NFL,” he plugged his nose and embraced a job he didn’t welcome, but felt was necessary to keep the Vikings in Minnesota and boost a then-suffering construction sector.

Cutting Coveted Social Safety Net.  Early in Dayton’s tenure as Governor, he even made significant cuts in state safety net programs, which is one of the very worst jobs any progressive can ever get.  Faced with a large budget shortfall, he proposed cutting $950 million in planned spending, told agencies to cut their budgets by up to 10 percent, and cut the state workforce by 6 percent.  That work had to leave even Dirty Job Dayton feeing grimy.

Love these positions or hate them — and Dayton himself didn’t relish many of them — no one can accuse Dayton of political timidity.

Dirtiest Job Yet

But this winter, Dirty Job Dayton finally met his Waterloo. With no political allies in sight, he attempted to push through salary increases for state agency commissioners, who are making less than their peers in many other states.   Dayton said he “knew there would be negative reaction,” but, as is his habit, he plugged his nose and pushed forward anyway.

How did that go for him?  Well, in the last few weeks Dayton learned that attempting to raise bureaucrats’ pay makes shark repellent testing look like a walk in the park.

Fresh off that experience, one might expect that Dayton would now stick to clean, safe, and easy jobs for the remainder of his time in office.  But if you believe that, you obviously don’t know Dirty Job Dayton very well.

Next Up:  Slinging Asphalt

After the salary increase shellacking Dayton endured, he has already found a new thankless task to champion – fixing Minnesota’s deteriorating roads and bridges.  While Republicans want a modest short-term fix funded out of the current budget surplus, that would be much too easy for Dirty Job Dayton. Dayton is attempting to put in place an ambitious decade-long $11 billion solution. Such a long-term fix necessitates a 16 cent per gallon (at current prices) increase in the gas tax. Not surprisingly, the polls are looking a little rough at the moment.

But Dirty Job Dayton doesn’t care. Like Mike Rowe, if the assignment stinks, scares, or stings, he’s in!

MN GOP Beware:  Biking and Pedestrian Improvements Have Broad Appeal

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rura_bikingMinnesota Republicans captured control of the Minnesota House of Representatives in part by fueling urban versus rural resentment:  “Those metro-centric DFLers give everything to Minneapolis and St. Paul.”  The truth is, turnout trends associated with non-presidential year elections were a much bigger reason why the DFL lost control of the Minnesota House. But this “core cities versus the rest of us” theme was definitely a big part of the  Minnesota GOP’s 2014 campaign, and a lot of analysts are convinced that is why Republicans won.  For instance, MinnPost’s excellent reporter Briana Bierschbach noted:

“…Republicans had a potent message, too, and it was a simple one: Rural Democrats had left their constituents behind by voting with their Minneapolis and St. Paul leadership.”

Exhibit A in the Republican’s rural victimization case was funding for pedestrian and bike infrastructure, something Republican’s often characterize as “metrocentric.”  In other words, they maintain it isn’t of interest to suburban, exurban or rural citizens.  For instance, GOP gubernatorial candidate Jeff Johnson tried to appeal to non-urban votes with this riff:

“We have spent billions of dollars on trains, trollies, bike paths, and sidewalks, but not nearly enough on the basic infrastructure most Minnesotans use every day: our roads and bridges.”

Beyond the campaign trail, that theme also has sometimes been a battle cry during Met Council transportation planning discussions.  Finance and Commerce reports that:

“The suburban counties argue that the Met Council’s transportation investment plan emphasizes urban transit, bike and pedestrian options at the expense of highways, which they say could cause further congestion and safety issues.”

However, a survey released today calls the Republicans’ assumption into question. The poll found majority support in every region of the state for additional funding for pedestrian and bicycle infrastructure.  The random sample of 1,000 Minnesotans sponsored by the Minnesotans for Healthy Kids Coalition found that the strongest support was in St. Paul and Minneapolis (71% support).  However, there was roughly the same high level of support in the suburbs, which are key political battlegrounds because that’s where population is growing most rapidly:

  • Western metro suburbs:  69% support.
  • East metro suburbs:  70% support.

Even in rural areas, a strong majority support funding bike and pedestrian infrastructure improvements:

  • Central Minnesota:  64% support.
  • Southern Minnesota:   57% support.
  • Northern Minnesota:  56% support.

In other words, if a politician mentions the DFL’s support of bike and pedestrian infrastructure funding in rural Minnesota they’re more likely to help the DFLer than hurt them.

The moral of the story is that the appeal of pedestrian and biking infrastructure improvements is hardly limited to the hipsters and fitness freaks in the core cities.  Politicians who campaign or govern based on that false assumption may have a rude awakening.

– Loveland

Note:  This also was published on streets.mn, Twin Cities Daily Planet, and MinnPost.