Missouri road projects at risk if federal spending plan not renewed

Alex Smith uses a pump sprayer to apply a release agent to the form where concrete will soon be poured. Behind him is co-worker John Lewis. They are part of a crew from GC Paving in Montreal, Missouri, working on constructing the concrete barrier between U.S. 54 and Christy Drive.
Alex Smith uses a pump sprayer to apply a release agent to the form where concrete will soon be poured. Behind him is co-worker John Lewis. They are part of a crew from GC Paving in Montreal, Missouri, working on constructing the concrete barrier between U.S. 54 and Christy Drive.

As Congress works to renew a long-term transportation spending plan, nearly $800 million in planned projects in Missouri is at risk if a deal doesn't come through by September.

Congress passed the Fixing America's Surface Transportation Act in 2015, approving spending through September 2020. It has until then to pass a new authorization. If it doesn't, the Missouri Department of Transportation will have to start eliminating planned projects, MoDOT Director Patrick McKenna said.

MoDOT has worked with regional planning groups to identify which projects would be cut in the event federal funding isn't reauthorized in time. Nearly 300 of the 1,437 projects planned through 2024 would be off the table, including the $3.5 million resurfacing of 7 miles of U.S. 50 in Cole County.

Federal surface transportation funding accounts for a majority of Missouri's road and bridge funds, with state user fees like the fuels tax and registration fees covering the other 44 percent.

Most of that federal money is matching funds, with the federal government reimbursing Missouri for about 80 percent of the cost of authorized projects. Reimbursement is quick, so it doesn't create cash flow issues for the department, McKenna said.

Still, timing is everything. Major projects like rebuilding bridges and interchanges take years to plan for, as the department has to account for everything from acquiring easements to the project's impact on the environment.

Knowing what funding the state will have years in the future is vital to planning those large projects, McKenna said. MoDOT already does most of its work trying to replace aging infrastructure, not build new projects. If federal funding was uncertain, it would have to plan even more conservatively.

One option Congress has is to temporarily extend the FAST Act a few months at a time until it's able to come up with a full reauthorization. That would complicate projects like the $278 million for new interchanges and overpasses and additional lanes on I-270 north of St. Louis, McKenna said.

If they get through the planning process to the point a crew is starting to work, then the federal government says it doesn't have the funds to reimburse MoDOT because they're going through short-term extensions with limited funding, Missouri would be in a tough spot.

"We'd have to front the money out-of-state resources to pay the contractors, or we could have a suspension of work, which when that happens in the middle of a contract, the taxpayers really lose," McKenna said. "The contractor has economic damages, and sometimes those are played out in court, so you end up paying them anyway and you don't get the project."

MoDOT was in that uncertain situation before the current FAST Act was approved in 2015. After the 2005 transportation spending bill ended in 2009, Congress approved 36 short-term authorizations over several years before finalizing a long-term plan.

McKenna took over as MoDOT director in December 2015, the same month the FAST Act was authorized. The department's five-year plan at the time totaled $1.6 billion in projects for a $125 billion system "in pretty dramatic need of replacement," he said. The plan was to maintain the primary network of highways and abandon maintenance on 26,000 miles of road, he said.

"That's like having $300 to operate, maintain and improve a run-down, $125,000 home," he said. "The house would get in worse condition because you'd barely be able to pay the light bill with that money."

If that were to happen again, MoDOT would have to cut 299 projects totaling $785.7 million over 2.2 million miles of road planned over the next four years in Missouri.

That's about 15 percent of the planned projects by dollar value and 20 percent by miles of road.

If Congress doesn't reauthorize spending by September, MoDOT will have to start changing its plans as early as October, McKenna said.

In MoDOT's Central Region, 38 projects totaling $85.7 million over 606.7 miles of road are at risk.

In Cole County, two projects would be at risk:

$3.5 million to resurface 7 miles of U.S. 50 between West Truman Boulevard and Kaylor Bridge Road and eastbound lanes from Route M to Stoney Gap Road.

$569,000 for preventive maintenance and to upgrade guardrails on the U.S. 50 bridge over the Osage River.

In Callaway County, three projects would be at risk:

Pavement and guardrail improvements and rumble stripes on 18.4 miles of Route D, from I-70 to Missouri 94.

$1.8 million for pavement improvement and rumble stripes on 12.9 miles of Route UU, from Route O to Route JJ.

$3.6 million for pavement improvements on 7.2 miles of U.S. 54, from the Audrain County line to County Road 143.

In Moniteau County, a $522,000 project to make pavement and ADA improvements and add guardrails on 2 miles of Missouri 87 from Business Loop 50 to U.S. 50 in California would be at risk.

Also at risk would be a $349,000 project to resurface 4.3 miles of Route A from U.S. 63 toward Hartsburg in Boone County.

With the FAST Act authorized, the five-year plan has grown from $1.6 billion to near $6 billion, and MoDOT still has about $8 billion in unfunded priorities even with the federal funds, McKenna said. That's because of the lagging purchasing power of the 17-cent fuels tax voters last increased in 1996, he added.

It's been a common refrain of transportation officials and proponents of a fuels tax increase, which Missouri voters most recently rejected in 2018. It takes about 28 cents to buy today what 17 cents could have bought in 1996. That inflation alone nearly accounts for MoDOT's unfunded priorities, McKenna said.

MoDOT has been deficit spending by taking more out of the state road fund than is coming in for the last several years. By 2024, the department will get to the point where it can't draw on those reserve funds anymore because it needs some left over in case of emergencies like a flood, McKenna said. At that point, MoDOT will have to pull back spending regardless of the federal funds.

"That doesn't mean that all things stop - because you still have gas tax revenue coming in, and there's still a federal program coming in at a certain level - it's just, can we do the work that we've planned or not?" he said.

There are currently three reauthorization plans being floated in Washington. The Senate Environment and Public Works committee started working on a plan last July, and lawmakers on the committee agreed on a five-year, $287 billion plan for surface transportation. House Democrats have proposed a six-year, $760 billion plan with $329 billion for surface transportation, and President Donald Trump's administration has proposed a 10-year, $1 billion plan with $810 billion for surface transportation.

"If we could wave a magic wand, we'd take the authorization ideas from the Senate EPW, we'd take the annual amount from the House Democrats, and we'd take the years from the administration," said McKenna, who is also serving as this year's president of the American Association of State Highway and Transportation Officials.

They won't get that dream deal, but the final plan will be some compromise between these plans and any others that come out. Coming to an agreement across political parties, chambers of Congress and branches of government will get more difficult as the November election nears.

Even tougher than authorizing it is finding a way to pay for it, McKenna said. The federal transportation fund has the same problem as Missouri's - the 18.4-cent federal gas tax it relies on hasn't increased since 1993. Since 2008, Congress has had to transfer funds almost every year to keep the Highway Trust Fund solvent, amounting to more than $140 billion, or about 20 percent of its spending, with the bailouts coming largely from general revenue.

The Congressional Budget Office projects the gap between revenue and spending will average $19 billion a year from 2021-26. That assumes spending doesn't increase, which every plan put forward so far would do. None of the groups that have put forward authorization plans have yet addressed how to pay for the trust fund's deficit.

One option is to continue transferring funds to cover the deficit. Another is to impose a fee on vehicle miles traveled, which would make up for the increasing fuel efficiency of vehicles, which has contributed to lagging gas tax revenues. That idea has the support of Rep. Sam Graves, R- Missouri, who serves as the ranking Republican on the House Transportation and Infrastructure Committee.