A few weeks ago we wrote about transportation funding, gently chiding those wanting to increase funding without a related discussion about how taxpayer’s dollars were being spent. In case you haven’t heard, the National Highway Trust Fund is teetering on the brink of insolvency due to the lack of comprehensive congressional reauthorization legislation (and an abhorrent lack of overall congressional leadership).
In light of recent events, we’re revisiting the topic because it’s now obvious that the transportation fund isn’t just broke; it’s flat out broken.
The National Highway Trust Fund was established in 1956. Today, 18.4 cents from every gallon of gas (24.4 cents on diesel) sold in the U.S. is shipped to Washington, D.C. and deposited into the fund. Complex formulas are applied and, in return, each state receives federal funding for roads, transit and (for some reason) underground storage tank removals.
Federal funds in our state are distributed to the Michigan Department of Transportation (MDOT), and every county and city based on the region’s Transportation Improvement Plan (TIP). In southeast Michigan the TIP is created and overseen by the Southeast Michigan Council of Governments (SEMCOG), and the funds are administered by MDOT.
While this may seem straight forward, it has become anything but. Many local governments, which have followed the usual process of submitting construction plans to MDOT, have now been told that they will not receive funding, despite having previously received approval from SEMCOG. These communities were told that Federal funds have been exhausted and no additional funding is available.
That’s an estimated $11 million dollar shortfall in southeast Michigan alone. This speaks nothing of the sizeable investments made by communities in preparation for what they believed to be funded construction.
SEMCOG and several county road commissions have stepped up and requested that the Federal Aid Committees move these newly denied projects from fiscal year 2014 to 2015. This move will mitigate the loss for some communities that have already spent money on construction preparation. But in other cases, projects could be delayed until 2016.
This begs the question: Why are we in this mess to begin with?
While it would be easy to blame MDOT or SEMCOG for mismanagement, the real culprit is the out-of-date federal legislation governing the program. Because of the punitive funding structure, most states do whatever they can to use federal dollars for fear that unused funds will revert back to Washington. Projects are therefore allowed to go over budget with the underlying goal of exhausting federal funds. When added to the significant increases in construction material and labor costs, the shortfall was all but inevitable.
The result: Local governments are left holding the bag.
A long-term solution is obviously needed, and we’ll explore that in the coming days. Until then we urge our readers to contact their state and federal representatives, voice their opinions and request a remedy for this arcane process.