Delaware Legislators Lock Themselves Out of Transportation Bucks

The best way to keep someone from spending money is to make sure they can’t get their hands on it.

It’s a tried-and-true philosophy, put into practice recently in the hope of keeping Delaware’s roads and byways in good repair.

With no fanfare, the General Assembly on May 18 approved an amendment to Delaware’s constitution that should preserve financial support for the state’s roads, bridges, and highways. The amendment freezes the income so it can’t be spent for anything else.

The so-called “lockbox” legislation was at the top of Transportation Secretary Jennifer Cohan’s list of things to get done when she was appointed in January 2015.

“It was part of a bigger picture,” Cohan said. “The priority was to get a sustainable revenue package passed, a responsible one that was not aimed at just increasing revenue but protecting the Transportation Trust Fund.”

It was the most pressing need DelDOT faced at the time, Cohan added.

An ongoing problem

Established by legislators in 1987, the fund was “… to be the funding mechanism for transportation projects in our state,” DelDOT Director of Community Relations Charles “CR” McLeod said.

But it didn’t work out that way.

“There were instances in the past where, to help balance the general fund budget, it was easy to transfer money out of the TTF and use it for nontransportation expenses,” McLeod said. “There was no prohibitive measure to keep funds from being transferred in or out.”

Rep. Greg Lavelle (R-Sharpley) spearheaded the effort to amend the constitution. The idea the General Assembly was balancing the state budget by siphoning cash from infrastructure projects grated on him.

“Expenses were put into the trust fund that weren’t intended to be there in the first place,” he said. “It all snowballed. Eventually, all of DelDOT’s expenses came out of the trust fund.”

The impetus behind the lockbox was that any revenue put into the trust fund absolutely, positively had to be used for construction.

The fund receives revenue from the federal government, and state road tolls, Delaware’s gas tax and Department of Motor Vehicles fees. With the economic boom of the late 1990s and early 2000s, things were going well, but as the recession hit and the state spending began outstripping revenues, legislators tapped it for DelDOT’s everyday operating expenses.

A task force condemnation

In 2011, a 24-member task force found Delaware might be unable to build roads or pay for upkeep. Looking to 2023, the group concluded total spending for transportation expenses would total about $12.4 billion over that decade.

As it stood, the trust fund would meet 70% of that figure, the group said.

“The result of that imbalance, if not corrected, will be either the elimination of all new capital projects by 2017 or severe reductions in DelDOT’s Core Program, resulting in an accelerated deterioration of Delaware’s transportation infrastructure,” according to a press release issued with the report.

The report noted the poor condition of roads and highways could drive potential new businesses and investors to other states.

Over the next three years, however, little was done. Gov. Jack Markell’s 2014 proposal to increase the state’s gas tax by 10 cents — a suggestion made by the task force — ran full force into an election-year wall.

Speaking during his State of the State address in January 2015, Markell then announced his support for the “lockbox” idea.

By late June 2015, political squabbling threatened 45 project proposals and funding to maintain existing roads. Cohan warned then that legislative indecision was hampering DelDOT’s ability to plan for the future.

However, as the General Assembly was barreling toward a midnight June 30, 2015, budget deadline, legislators approved a last-minute package of additional borrowing and toll and fee increases intended to raise an additional $55 million.

In a show of bipartisan bonhomie before they went home for the year, Republicans and Democrats took up a Lavelle-sponsored bill that would make the TTF almost invulnerable to legislative meddling.

The legislation, SB 166, was a constitutional amendment. It expressly forbade using TTF money for anything other than transportation projects. Overcoming that restriction would require a supermajority vote in both houses of the Legislature. The override would have to be proposed in legislation outside the state budget process.

Both houses suspended the normal rules of conduct and in a matter of minutes unanimously passed the bill through the Senate during an early morning July 1 special session. It made it through the House equally as fast that morning, garnering only one no vote.

Changes still needed

The rules for amending Delaware’s Constitution of 1897 mandates the proposal pass two separate General Assembly sessions. It requires two separate bills, but with the exact same wording, and it must pass each chamber by a two-thirds vote.

Efforts to pass the second bill were not nearly as frenetic as the first.

Lavelle introduced SB 20 on Jan. 24; in April, it garnered 19 of 21 Senate votes and passed 37-4 in the House on May 18.

The amendment went into effect the same day; amending the state constitution does not require gubernatorial approval.

Currently, the TTF has a $908 million reserve, but even though the money cannot be touched by legislators, about one-third still is earmarked for noncapital spending.

“We hope that will change,” Cohan said. “Every dollar we spend on operations is a dollar we can’t spend on capital.”

Lavelle hopes to see that happen as well, but with his fellow legislators deadlocked on the fiscal 2018 budget and only nine days to work out a compromise plan, he doesn’t expect that to occur anytime soon.

Still, Lavelle’s constitutional change has given Cohan some hope when it comes to keeping her department in front of needed improvements to highways and roads.

“I think that the lock box is a beautiful thing, and I think it will help protect us going forward,” she said.