State spending on transportation up after several down years

News AASHTO Journal December 13, 2005
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State governments—strapped in recent years by tight budgets—are expected to make record level investments in transportation this year—some $66 billion, according to USA Today.

Data from the Bureau of the Census indicates that many state governments are putting large sums into road construction after years of modest spending. For three years running, USA Today reported, road construction spending has been flat and has not kept up with inflation.

“We’re beginning to see a renaissance in highway construction, but we need a major push over the next few years to make a difference,” said AASHTO Executive Director John Horsley.

According to the Census Bureau, spending by all levels of U.S. governments—federal, state and local—rose by 12% during the first nine months of this year, and is likely to reach a record sum at that rate--$66.3 billion in 2005. That spending will speed up long-term projects by paying for both new construction and upgrades.

State officials announcing such projects are able to in part because of robust growth in state revenue since about 2001. Many proposed projects will be up for consideration by state legislatures when they begin meeting in January.

Recent yes votes by citizens in Washington State—for a 9.5-cent gasoline tax increase—and New York—for a $2.9 million roads bond issue—have fueled a sense of more public support for transportation infrastructure. New York voters had rejected a similar bond issue five years ago. Further, more than 75% of transportation bond issues have gotten voter approval since November 2004; only half of all those on the ballot were backed by voters in November 2002.

During a nationwide recession from 2001-2003, many states were obliged to move money from their transportation trust funds into their general funds, to avoid violating their constitutions by spending in deficit. As a result, highway construction went up at an annual average of 4.7% between 1994 and 2004, compared with 11.5% average annual growth in capital spending for schools and 10% for public hospitals.

But over that same decade, according to the Texas Transportation Institute, the number of hours drivers spend unmoving in traffic rose by 17% in 85 large American cities.

Several transportation finance questions are pending before state officials and voters around the nation. Ambitious construction plans are on the drawing board in New York, Texas and Ohio, while voters in Arkansas will decide on Dec. 13 whether to clear the way for barrowing $575 million for road work.

Experts say some of the public support for transportation finance stems from the fact many recent proposals have relied on sources other than gasoline-tax increases—such as increased tolls, private construction of toll roads or barrowed funds—to cover the cost of the work.

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