ASK JEFF : A highway funding crossroads
Jeff Rea
Companies continue to find Indiana a good place to do business. Two key reasons are our location and our transportation network.
Indiana has been deemed the Crossroads of America; it's easy to move goods and services in and out of our state, with easy connections to most of the rest of the country. It's safe to say that no matter where your business goes, you can definitely get there from here.
But Indiana is at a crossroads when it comes to funding the transportation needs of the state in the future. Huge price tags await the completion of major projects like construction of I-69 between Indianapolis and Evansville, the completion of U.S. 31, the refurbishment of the Ohio River bridges and the Illiana Expressway.
In addition to those major projects, routine maintenance, upgrades and other needs have leaders wondering what the future holds.
Thanks the Major Moves program, Indiana has been fortunate to have a fully funded transportation plan in recent years. That has allowed Indiana to advance many projects long on the transportation agenda for the state.
Since October 2010, the state Department of Transportation has let about $1 billion in construction projects. In the near future, Indiana must address the post-Major Moves era with a plan to fund the next generation of transportation needs.
Indiana's challenges are not unlike that which the rest of the country also is facing as infrastructure is aging and as the need for new connections and upgrades continues to grow.
Nationally, as our nation continues to struggle with a growing debt and the impending fiscal cliff, transportation funds could be cut along with many other federal programs. For example, Taxpayers for Common Sense has recommended that the fiscal cliff and automatic budget cuts could be avoided by cutting $11.4 billion from federal transportation spending in 2013 and $187 billion over 10 years.
Without any cuts, current transportation funding will not keep up with need. The Congressional Budget Office estimates that current spending levels will exceed gas tax revenues by $110 billion between 2014 and 2022. Congress will have to either locate new revenue sources or reduce the federal highway program so that spending matches revenues.
In addition to those federal challenges, there is a severe shortage of funds to adequately maintain local systems. A needs study conducted by the Indiana Local Technical Assistance Program Center, Purdue University, reports that the annual shortfall is $715 million for local roads and streets, $117 million for bridges and culverts and $26 million for safety improvements for a total shortfall to local governments of $858 million annually. It is estimated that another $5 billion is needed to "catch up" on neglected projects over the next several years.
We haven't seen transportation coming up as a major issue in either the national or state races, though it will be one of the more pressing issues the president or governor will have to address.
There are no simple solutions. You'll hear more about public-private partnerships that would typically include tolling. You'll hear debate about the gas tax, whether it should be adjusted, and whether long term it's the right model to fund transportation needs.
Indiana has led the nation on proactive solutions to long-term problems. Time to lead again here and develop that plan to meet our future transportation needs.
Original Publication URL: http://www.southbendtribune.com/business/sbt-ask-jeff-a-highway-funding-crossroads-20121016,0,3055819.column
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