Transportation Budget Gap Could Mean Loss Of Federal Funds

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It’s estimated that the state will need to raise roughly $30 million in new transportation revenue in order to pull down the maximum amount of federal funds and there are several revenue options being considered at the Statehouse.

The state finds itself with a transportation revenue hole for several reasons. Federal stimulus money for infrastructure projects has dried up  and money from the gas tax has been declining for several years as more people drive fuel efficient cars. This is a problem because the state gas tax is based on per gallon sales.

Transportation Secretary Brian Searles says there’s another key factor – a significant rise in construction costs for many projects.

"We’ve had a 40 percent increase in the cost of running the transportation system since the last time the per gallon gas tax was raised in Vermont in 1997 and that really cuts in."

Colchester Rep. Pat Brennan is the chair of the House Transportation committee. He says most federal programs require a 20 percent state match and he says there isn’t enough money in the Transportation Fund to take full advantage of the federal funds that are available.

"The figure I’m hearing is around in state money a $30 million hole that leverages upwards of $100 million totally with federal funds figured in," said Brennan. "And that is the reality that we face immediately so yes there’s no doubt that we will have to address revenues this year."

Lawmakers are expected to consider several options. They could raise the gas tax that’s now pegged at 20 cents a gallon, they could apply the sales tax to the price of gas or they could index the state gas tax to inflation.  Brennan says he’s willing to look at all of them.

"Everything is on the table but that will be part of the discussion," said Brennan. "Or a total revamping of the way we tax gas and diesel in Vermont. I think that’s a real possibility."

Grand Isle Senator Dick Mazza is the chair of the Senate Transportation committee. He says he’s open to raising new revenue as along as the money is dedicated to transportation projects.

"If we’re going to make a commitment to the folks of Vermont that we’re going to do better and get our roads up to par and we hear this that we’re not in line with other states," said Mazza. "Before you ask for an increase you better have a plan that’s going to justify that increase."

Mazza says raising the gas tax is often a politically difficult thing to do but he says the alternative is worse:

"So we have a clear choice, I believe. You can cut back on spending you can cut back on projects you can postpone projects you can postpone paving, cut it back but do Vermonters want that? That’s the choice we have to live with."

Governor Peter Shumlin will unveil his plan to increase transportation revenue in his budget speech next week.  Then the House and Senate Transportation committees will spend several weeks reviewing the governor’s proposal.



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