Congress may have avoided a debt default, but Georgia and other states face a “fiscal cliff” on transportation projects if Congress doesn’t act by Sept. 30, 2014. That’s the date when the two-year federal transportation funding bill expires.
Without a new one, there will be no new highway interchanges or road widenings in 2015 to help frustrated commuters get around metro Atlanta, which is perennially among the most traffic-congested cities in America.
The state would not be able to start any design work or buy any right-of-way for future construction in 2015, Joshua Waller, GDOT’s director of government relations, told the state transportation board at a meeting Wednesday.
Considering the stalemate that just occurred in Washington, state officials are increasingly worried that political dysfunction could stymie a transportation bill next year.
“Most people say that will never happen, but we saw what just happened and what’s going on right now,” Georgia Department of Transportation Commissioner Keith Golden said in a phone interview. “Our job is to make sure they know we need a long-term transportation bill.”
About half of GDOT’s $2.2 billion annual budget is federally funded.
Projects already under construction like the Atlanta Streetcar or the optional toll lanes along I-75 in Henry and Clayton counties would be unaffected because the money to pay for them has been allocated.
“We would be able to sustain active projects that are out there, but we wouldn’t be able to fund any new projects,” said Golden. “It’s a potential disaster for a state that is very dependent on the federal transportation dollar.”
If no bill is passed, money for new construction would become available again in 2016, but it would be reduced from prior levels by about a third.
Tax collections down
Drivers pay an 18.4 cent-per-gallon federal tax at the gas pump, money which flows into the federal Highway Trust Fund and back out to states. However, that revenue stream has narrowed to a trickle because people are buying more fuel-efficient and alternative fuel-powered vehicles.
Congress has been chipping in cash from the general fund, to the tune of about $12 billion to $15 billion a year. Usually, these transportation funding bills expire after five or six years. But the current one passed in 2012 was set to expire in just two.
New roads, bridges and travel lanes can take years if not decades to get off the ground. Uncertainty about future funding makes long-term planning a guessing game.
Right now, GDOT is putting together a four-year Surface Transportation Program. Planners are proceeding under the assumption that federal funding will increase by 1 percent. But those plans would have to be reworked if funding levels changed, according to Toby Carr, the state transportation planning director.
The U.S. Department of Transportation has said it needs $70 billion a year to significantly improve roads, a huge increase from the current $38 billion for the nation.
That’s because more than a quarter of major urban roadways are in poor condition, according to TRIP, a national transportation research group.
Part of the concern is that even if a new transportation bill is authorized, shifting $15 billion a year from the general fund into the Highway Trust Fund is not going to be a sustainable strategy in the long term. Benita Dodd, vice president of the conservative think tank Georgia Public Policy Foundation, said it’s clear that the federal government will never be able to fully shoulder the nation’s growing transportation infrastructure costs.
“We have to start looking at alternatives,” Dodd said. “One of the biggest things we have to look at is public-private partnerships, and the other is managed lanes [like optional toll lanes] and congestion pricing.”
House Transportation and Infrastructure Committee Chairman Bill Shuster, R-Pa., was in Atlanta last month to meet with local transportation officials and industry representatives. Asked about the federal gas tax, Shuster told The Atlanta Journal-Constitution that the current gas tax works well because consumers feel it’s “painless” to pay at the pump.
“That 18.3 cents — people don’t feel it,” Shuster said. “I’ve never had anybody come up to me and say that 18.3 cents is outrageous.”
However, lawmakers will have to consider tolling, public-private partnership and other funding options if they want to keep the nation’s transportation grid from crumbling, Shuster said. He said Congress also could look at boosting the Highway Trust Fund with lease and royalty payments from offshore oil drilling in federal lands.
Last month, Waller of GDOT met with representatives for about 9 of the 14 congressional delegates from Georgia during a visit to Washington as part of an ongoing attempt to nudge them into action. Georgia has no representatives on the House or Senate transportation committees, so its delegates can’t even begin working to pass a bill until one reaches the floor.
U.S. Sen. Johnny Isakson serves on the Senate Finance Committee, which is looking at a complete overhaul of the tax code. He said there have been some discussions about protecting the gas-tax revenue so it can’t be used for anything else. But the transportation bill is not on Congress’ front burner, especially given the budget crises of recent weeks.
“It is a year away and obviously we’ve been dealing with 90-day threats, so that seems like a lifetime,” Isakson said.
Some projects that could be held up if Congress does not pass a transportation bill by Sept. 30, 2014.
• I-75 at I-16 interchange in Macon
• I-95 at I-16 interchange in Savannah
• I-285 at I-85 South interchange in Atlanta
• I-285 at I-20 West interchange in Atlanta
• Macon-LaGrange bypass on U.S. 27
*According to state Transportation Planning Director Toby Carr.