Folks at the Minnesota Department of Transportation and Met Council are keeping a close watch on how the federal government is going to fund transportation in the wake of the recent predictions that the Highway Trust Fund will go broke by August.
It's understandable that they are nervous, especially in light of a new report put out Wednesday by the pro-transportation investment group Transportation For America that said the Minnesota Department of Transportation stands to lose nearly $740 million in highway and transit funding if the fund goes dry.
The The End of the Road? The looming fiscal disaster for transportation report said the state would have $113 million less to mitigate traffic problems in the Twin Cities metro area when the federal government's new fiscal year begins Oct. 1.
That is a worst-case scenario, but the looming shortfall and to what extent leaders in Washington will commit to a steady and reliable source of funding down the road will play a significant role in what gets fixed and built or not in the coming years in Minnesota. Federal dollars make up 60 percent of state's transportation budget.
"As an agency, we are able to manage a short-term problem," said MnDOT spokesman Kevin Gutknecht. "It's difficult for the long term. We need something stable."
Gutknecht said many projects in the state's 20-year highway improvement plan are tied to federal dollars. Transit initiatives also would be affected.
MnDOT is slated to get $18 billion over the next 20 years for road projects, but a report put out late last year by the Transportation Finance Advisory Committee said that the agency will need $30 billion “to keep pace with Minnesota’s growing population and aging infrastructure.”
The state has the fifth-largest highway system in the nation with 140,000 miles of roads. More than half of those miles along with 35 percent of the state's bridges are more than 50 years old.
Zelle and other leaders have been advocating for a metro-wide half-cent sales tax to be dedicated to transit investment.
A main reason for the Highway Fund's deficit is that revenue from the national gas tax of 18.4 cents per gallon last hiked in 1993 has not kept pace with rising construction costs. The Congressional Budget Office said that without new money dedicated to transportation, all money collected from the gas tax starting this fall will be needed to cover the federal share of projects already promised to states and transit agencies. There would be no money for new projects, the office said.
"America is at a crucial decision point for transportation," said James Corless director of Transportation for America.
Even if funding remains at the current level, Transportation for America said that states and cities nationwide collectively face a $46.8 billion deficit. Already 10 states have raised their own tax to create money for transportation, according to the Center for Transportation Excellence.
Congress still has time to act and find a way to replenish the fund, which the U.S. Department of Transportation uses to reimburse states for road construction and mass transit projects. This week the Obama administration sent Congress a four-year, $302 billion transportation bill that would keep the fund solvent.
Like past federal budget crises, it's likely that something will get worked out before the fund runs dry, but there is a lot riding on the decisions that will be made or not in Washington.
"The state and region very much depend upon reliable federal transportation funding to help ensure adequate investment, as roads and transit are so critical to the state and region’s economic well-being, livability and quality of life," the Met Council said in a statement.