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December 12, 2016 10:45 AM, EST

Louisiana Transportation Secretary Aims Big to Fix Huge Funding Shortfall

Shawn Wilson
Louisiana refines nearly one-fifth of the nation’s oil. Interstate 10, one of the nation’s busiest freight corridors, runs horizontally through the state although it’s just one lane eastbound for a stretch near Baton Rouge. But Louisiana is in the midst of a longstanding transportation funding crisis, in part because its fuel taxes haven’t been raised since 1989.

In response, Gov. John Bel Edwards, who took office last January, and Shawn Wilson, his Department of Transportation and Development Secretary, have called for a $700 million annual revenue infusion. A transportation taskforce assembled by Edwards approved that level of funding Dec. 14.

“We have an all-time high of congestion,” Wilson told Transport Topics. “We’ve closed more bridges. We can choose to complain about the infrastructure or we can say enough is enough and recognize that [fuel taxes are] the purest user fee that you get. We should ensure that those dollars are spent on the right projects in the right fashion, [but] the people who choose to use the roads should pay for their fair share. If you can find $700 million from some other source than a tax increase, go for it. But the [fuel] tax is proven. It’s predictable. It’s easily collected.”

Except that tax has lost 49% of its value during the last 27 years and it will have to more than double to 43.3 cents per gallon to reach $700 million.

“I believe there is momentum to do something for transportation,” Wilson said. “The question isn’t should we increase investment in transportation? The question is how much. When I hear folks say, ‘I’m willing to do 5 cents,’ I appreciate that and that may be what we end up with, but that would get me [only] $150 million.”

Cathy Gautreaux, the long-time executive director of the Louisiana Motor Transport Association, is skeptical that Edwards and Wilson have that much support for their bold plans.

“I’m not sure I would refer to it as momentum,” said Gautreaux, who strongly opposes the task force’s proposed hike in truck registration fees. “It’s more a recognition that we need to take highway funding seriously. But $700 million? I don’t see that happening. [Maybe] $200 million or $300 million. The great flood of 2016 is still impacting our budget. We still have people living in FEMA trailers. We have some serious challenges after the biggest disaster we’ve had other than [Hurricane] Katrina. And Gov. Edwards is still grappling with the budget deficit that was handed to him in January.”

However, Wilson said that transportation has a much bigger deficit, one that has been accumulating for nearly three decades.

“Our unmet needs have gone up from $12.7 billion to $13.1 billion this year,” he said. “Had we indexed the [fuel] tax in 1989, I wouldn’t be asking for new money today.”

Rep. Kenny Havard, the chairman of Louisiana’s House Transportation Committee, will have a big voice in how much, if any, new money Wilson gets.

“I commend the Governor and Secretary Wilson for talking about the issue,” Havard told Transport Topics. “Before, no one really wanted to talk about it. We’re hearing the truth. We know what the numbers are. We have a 20-cent gas tax now. To ask people to pay another 23 cents is a stretch. In Louisiana, we have a trust issue because for the last 20 years we haven’t used our transportation dollars only for transportation. People just don’t trust that we’ll put the money where we say it’s going. The need is tremendous, but we need other options other than just a [fuel] tax [hike]. I’ve asked my staff to look at a gross receipts tax on every gallon that’s produced at refineries.”

Ken Perret, president of Louisiana’s Good Roads and Transportation Association, thinks Louisianans are finally ready for “some major investment in transportation,” but that some might want to wait to see what the incoming Trump Administration does on the federal level before deciding what to support in Baton Rouge or in a possible voters’ referendum on a fuel tax increase.

“If we’re going to go for a [funding] increase, let’s go for something significant and really accomplish something in the next 4-8 years,” said Perret, who predicted that Senate Transportation Committee Chairman Page Cortez will be more supportive than relative newcomer Havard. “Let’s not just piddle around so we have to come back again later on with a request for additional money.”