We are now
six weeks into the legislative session.
Governor Shumlin delivered his budget priorities, the legislature passed a Budget Adjustment
Bill that brought last year’s budget, based on projected revenues, in line with
revenues actually realized, and now the work to come up with a budget for the
2014 fiscal year is being addressed.
Separate
from the general state budget is the Transportation Budget. 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, one more immediate and
another reaching far into the future, that have an impact on the Transportation
Fund.
The Long
Term challenge: As Vermonters drive less and shift to more fuel-efficient
vehicles, state revenues from gas taxes have steadily declined. These state
fund reductions are combined with federal uncertainties such as highway trust
funding and possible federal transportation reauthorization reduction. With
this in mind, one can begin to see that 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. They have reported the 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.
The Short term challenge: The $657 million, FY2014
transportation budget presented by the Governor assumes the Legislature is able
to identify a revenue package that enables Vermont to maximize all of its
available federal funds. Federal formula funds require a state dollar match. If
Vermont is unable to provide this match, then federal formula funds must be
returned and projects would be 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 which would require
cutting $123 million dollars in projects from this coming year’s budget.
The
Proposed Solutions: The Agency of Transportation has proposed the following steps to
achieve the immediate funding gap:
· Utilize transportation Infrastructure bonds providing yielding
$8.3 million after issuance costs and debt reserves;
· Decrease the current
per gallon gas tax by 4.7 cents, from 19 cents to 14.3 cents per gallon. This
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% assessment on retail
sales price, yielding $43.56 million.
This assumes $10.89 million for each one percent 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 is in the process of discussing, hearing testimony and
evaluating all options.
I am indebted to Rep. Diane Lanphere
(D-Vergennes) for the information in this article. I
have heard from many of you on a variety of topics and continue to welcome your
input. If you would like to get in touch with me
about this issue or any other issue before the legislature, you can email
me at myantachka.dfa@gmail.com or call me at 425-3960.
