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Thursday, October 16, 2008 - 10:33
Transportation secretary announces decreasing revenues in Virginia

State and federal revenue will decrease at least $2.1 billion over 6 years

State and federal transportation revenues are projected to decrease between $2.1 and $2.6 billion over the next six years, Virginia’s Secretary of Transportation Pierce R. Homer said at a Commonwealth Transportation Board meeting on Oct. 15.

“We must make fundamental structural changes to our transportation administration, services, programs and projects to address this long-term change to our revenue base,” Homer said. ”The weak economy and reduced state and federal transportation revenues require that the existing transportation budgets and the Board’s Six–Year Improvement Program be further reduced.”

The program was last reduced in June by $1.1 billion.

The $2.1 to $2.6 billion in reductions includes both federal and state transportation revenues. The Commonwealth’s chief economist, John Layman, outlined to the board the formal revenue forecasting process that determines the magnitude of the state transportation revenue reductions. The presentation also outlined the structural changes in the economy that will impact both gasoline and auto sale tax collections for the long term.

Adding to the revenue decline is the uncertainty of the federal transportation funding—legislation that governs these funding levels expires this year. Congress took one-time action in September to offset declining federal gas taxes for one year. “As AASHTO shared in September, the one-time congressional action was a very short-term solution to a long-term issue. We will be working over the next several weeks with experts to determine the best approach to forecasting future federal transportation funding,” Homer said.

During the meeting, Virginia Department of Transportation Commissioner David S. Ekern presented a plan outlining how VDOT will respond to the 6-year revenue forecast and position itself to address long-term economic changes to transportation revenues.

“In the future, VDOT will be a smaller agency. We cannot afford to administer and deliver our services, programs and projects the same way we have in the past,” Ekern said. “Safety, emergency response and maintenance of existing roadways will be our top priorities, but we will have to make some difficult decisions to live within our means.”

Commonwealth Transportation Board

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