Governors May Request Fuel-Tax Hikes to Ease Severe Road-Funding Shortfalls

This story appears in the Dec. 3 print edition of Transport Topics.

Four governors facing worsening transportation shortfalls are set to present funding plans to their state legislatures early next year, and at least two may call for higher fuel taxes.

Massachusetts Gov. Deval Patrick, a Democrat, and Virginia Gov. Bob McDonnell, a Republican, have not ruled out raising gasoline and diesel taxes to alleviate severe strains on transportation spending.

“The bottom line is we have a math problem, and the math problem is that we’ve got dramatically less gas-tax revenue coming in than we did five or 10 or 15 years ago, and the cost of asphalt’s gone up 300%, and the demands of our citizens have gone up as well,” McDonnell said.

He responded to news media questions about some legislators’ proposals for higher fuel taxes.

The commonwealth faces a $500 million deficit in its highway maintenance fund in coming years, McDonnell said.

The governor said he was considering all proposals to address the funding problem as fuel revenues dwindle and vehicles become more fuel-efficient. Transport Topics obtained a recording of the meeting from McDonnell’s office.

The governor said he will send a “significant” funding proposal to the Virginia General Assembly and “be fairly adamant” with lawmakers that “we’ve got to stop kicking the can down the road.”

The situation in Massachusetts is equally dire.

Under a measure passed last year by the state legislature, Patrick is to send a long-term transportation funding plan to lawmakers by Jan. 7. The Boston Globe recently reported that the plan contains hefty tax hikes that could include higher fuel taxes.

A spokeswoman for the governor took issue with the Globe report. 

“There are no specific proposals at this point determined for the plan,” said Cyndi Roy, director of communications for the Massachusetts Department of Transportation.

“Everything is on the table,” Roy said in answer to questions about whether Patrick would raise gasoline and diesel taxes.

The state’s transportation system carries annual shortfalls that in the highway department alone next year will be $240 million, according to a recent report from the Dukakis Center for Urban and Regional Policy at Northeastern University.

In 2009, Patrick proposed raising gasoline and diesel taxes by 19 cents a gallon. The same year, a business coalition looked at the funding and debt problems and said the situation was so bleak the increase should be 25 cents.

Boston’s Metropolitan Area Planning Council said the crisis called for a 29-cent increase in fuel taxes. Lawmakers declined to address any of the proposals.

In Pennsylvania, Republican Gov. Tom Corbett said during an address before the Pennsylvania Press Club that he too will present a plan to legislators to pay for billions of dollars in backlogged road and bridge repairs.

“We’re not releasing details of the transportation plan,” Corbett spokeswoman Janet Kelley told TT last week.

Kelley declined to say whether Corbett would consider higher gasoline and diesel taxes.

Corbett never acted on a 2011 special commission report that laid out revenue sources for solving the state’s transportation funding problem, which includes a $7.8 billion debt at the Pennsylvania Turnpike.

Part of that debt is due to a 2007 state law requiring the turnpike to give $450 million a year in toll revenue to help pay for badly needed road and bridge repairs in other parts of the state.

The 2011 report said two ways to increase revenue would be to raise the state’s wholesale oil tax and increase vehicle registration fees that have not changed since 1997.

Meanwhile, Wisconsin’s Republican governor, Scott Walker, said he will not propose higher fuel taxes in the transportation funding plan that he is to present to the legislature in February with his budget.

The Associated Press reported last week that Walker was “downplaying” the possibility of higher fuel taxes even as the state announced it put several highway construction projects on hold because it could not pay for them. Two years ago, Walker suggested using sales tax money to help pay for transportation.

“I wouldn’t be surprised if there is something along those lines [in the upcoming plan],” said Tom Howells, president of the Wisconsin Motor Carriers Association. “He even talked about that when he was in the legislature.”

Walker’s office did not respond to a request for comment.

Wisconsin legislators two years ago created a special commission to address long-term transportation funding, and it is to report to Walker in January. the governor appointed six of the 10 voting members. The commission put Wisconsin’s 10-year transportation funding shortfall at

$3 billion to $18.4 billion, the Associated Press recently reported.

Howells said the commission has done a good job of documenting the problem as fuel tax revenue declines and inflation diminishes purchasing power.