MoDOT: Funding shortfall will mean system-maintenance problems

Last week's rejection of Amendment 7, the ¾-cent sales tax increase proposal to provide more money for transportation projects, was the latest effort to provide more money for the Transportation department's efforts to build, repair and maintain Missouri's more than 32,000 miles of roads and 10,400 bridges - the nation's seventh largest highway system.

But the state's main revenue source - a 17.4 cents-per-gallon tax on the sale of gasoline and diesel fuel - hasn't changed since 1996. And the federal government's contributions to highway funding also have been dropping in recent years, leaving Missouri (and other states) facing increasing costs for materials like steel and concrete, without also having increasing revenues.

"We're going to keep pushing really, really hard to keep our highway system and our bridges in good condition for as long as we can, with the dollars that we have," Transportation director Dave Nichols told reporters - and, later, the Highways and Transportation Commission, that oversees the department's work - last week.

"But we're not going to be able to do that for long."

Amendment 7 would have added about $540 million a year to MoDOT's revenue stream.

But voters said No.

Overwhelmingly - 407,532 (40.82 percent) for the increase, and 590,963 (59.18 percent) against it.

"Everybody acknowledges the need for transportation - there are just different views as to how that gets accomplished," Steven R. Miller, chairman of the six-member Highways and Transportation Commission said. "What we can see as the consequences of a lack of funding may be more difficult for the public to see, now.

"But they're real. And they're here."

Seven years ago, Pete Rahn - who then was Missouri's Transportation director - warned that the state was facing a "perfect storm" for transportation funding, with "cataclysmic" results likely.

"We are in the midst of a bubble for funding of highway construction," Rahn told lawmakers in his Feb. 7, 2007, State of Transportation speech. "From the top of this peak we can observe a very low valley.

"Our current construction program of $1.23 billion - the largest in Missouri history - drops off a cliff in 2010 and plummets to $569 million."

Rahn's speech - one of many times he warned of state highway funding falling off that cliff - came more than two years after Missouri voters' November 2004 approval of Amendment 3, which allowed MoDOT to keep fuels tax money that, by previous state law, was being distributed to other state agencies for their highway related work.

That constitutional amendment also required the department to sell bonds so it could get a large pile of money quickly, then work to resurface more than 2,200 miles of the state's busiest highways, as well as repairing or replacing some of the state's bridges in the most critical condition.

But the continuing transfer of money to MoDOT under that amendment now must be used to pay off those bonds - making the money unavailable for new road projects for at least another decade, until the bonded debt is gone.

While Rahn predicted seven years ago that MoDOT's available money for construction and maintenance would drop to $569 million by four years ago, current Director Nichols told commissioners last week the funding level still is around $700 million.

But some of that higher-than-Rahn-predicted level is because the more recent "Bolder 5-Year Direction" plan, launched after Rahn left Missouri government, cut more than 1,200 jobs from MoDOT's payroll, closed three district offices, consolidated some maintenance operations and locations and sold off a lot of equipment.

Without the additional money that passing the sales tax last week would have provided - and with no other increased-funding plans on the horizon - Nichols said the department can expect to see a drop in money available for road building and maintenance projects from the current $700 million a year to about $325 million a year, including matches with federal government funding.

But the state needs at least $485 million a year just to maintain the current infrastructure in good repair - so a lower funding level means something will have to give, he said.

Rahn noted the system improvements that began in 2005 were targeted on roads carrying 60 percent of all traffic in the state and were within 10 miles of the homes of 86 percent of Missouri's residents.

Now, in 2014, current MoDOT leaders say that program was a success in improving road conditions.

But, while Rahn's financial crisis predictions might have been delayed, they still will come true.

"We made a significant improvement on the condition of our system and, I think, that has helped tremendously with the credibility of MoDOT and the Highway Commission, that we can deliver projects on time and ahead of schedule, and within budget," Nichols said last week.

Miller said the department's leaders and other transportation supporters must continue educating the public on MoDOT's situation.

"It's just reality. Our roads age every day. Our demands in the state increase every day," he explained. "So, it's just going to be a practical pressure, that's going to be on all of us as Missourians, to find a solution.

"We're going to work that out as a state (and) ultimately, Missourians are going to set those priorities.

"We don't."

Miller said the department isn't trying to compete with other state needs, like education funding, which he said is what Missourians' top priority should be.

"We are trying to carry forth our job, to deal with transportation," he said.

Nichols said it's not MoDOT's job to come up with a new funding plan.

"That's for others to discuss," he said, mentioning lawmakers, government and business leaders and, ultimately, Missouri voters.

Without additional funding, he added: "It is inevitable that the system will begin to deteriorate over time."

State Sen. Mike Kehoe, R-Jefferson City, and others want Gov. Jay Nixon to be more active in future discussions about transportation funding.

But the governor hasn't offered any suggestions, so far.

Nixon spokesman Scott Holste offered a reaction to Tuesday's vote: "As the Governor has said from the onset - and as the voters said on Tuesday - Missourians should not have to shoulder a $6 billion tax hike while special interests are being showered with special tax breaks, and the heaviest users of our roads are given a free pass."

Nixon's battle with lawmakers over tax breaks will continue through the Sept. 10 veto session.

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