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Legislative Report: Transportation needs hard for state to fund

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Posted on February 4, 2013 |
By Rep. Diane Lanpher



Rep. Diane Lanpher, Addison-3, is a member of the House Transportation Committee.

Vermont’s transportation system has faced some extraordinary challenges in recent years, with four federally declared disasters in 2011, including spring floods followed by Tropical Storm Irene. This year we face different transportation challenges — both challenge the Transportation Fund. One more immediate and another reaching far into the future.

Long Term challenge:

As Vermonters drive less and shift to more fuel efficient vehicles, state revenues from gas taxes have declined steadily. Combined these state fund reductions with federal uncertainties — highway trust funding and federal transportation reauthorization reduction possibilities — you can begin to understand Vermont’s long-term transportation funding stability is seriously at risk.

A summer funding study committee worked to determine the annual gap between available state transportation revenue and the cost to meet basic transportation needs. The reported Vermont gap is estimated at more than $240 million per year, each and every year. The needs estimate includes the cost to preserve the state’s existing transportation system in a state of good repair. It assumes that preserving the functionality of the road network is fundamental to meeting basic travel needs of people and goods. It does not include major roadway expansion beyond projects already in the pipeline.

Short term challenge:

The $657 million fiscal year 2014 transportation budget presented by the governor assumes the Legislature is able to identify a revenue package that enables Vermont at maximize all it’s available federal funds. Federal formula funds require a state dollar match. If Vermont is unable to provide its match, then federal formula funds must be returned and projects delayed and/or suspended.

The additional funding needed to fully fund the proposed FY2014 transportation budget program is $36.53 million in state funds. Without action, we place at risk our ability to match all the available federal transportation dollars and would require cutting $123 million in projects from this coming years budget.

The agency has proposed the following to achieve the immediate funding gap :

•  Float a TIB (Transportation Infrastructure Bond). Bond proceeds of $9 million, after issuance costs and debt reserve, yields $8.3 million.

•  Decrease current per gallon gas tax by 4.7 cents from 19 cents to 14.3 cents per gallon. (Reduces the transportation fund by $15.32 million)

•  Index per gallon gas tax to inflation (revenue neutral first year). This action assists in a small way with the long-term structural funding problems mentioned earlier.

•  Sustain gas tax revenues by adding a 4 percent assessment on retail sales price (yields $43.56 million). This assumes $10.89 million for each 1percent based on $3.79/gallon price estimate.

Combining all the recommended funding options obtains the $36.54 million needed to fully access and maximize Vermont’s federal funds. They are a starting point, and the House Transportation Committee will be discussing, hearing testimony and evaluating all options. 

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