On December 4, 2015, President Obama signed into law, the Fixing America’s Surface Transportation, or “FAST” Act. After ten years and dozens of extensions and delays, Congress finally had provided long term funding for new surface transportation projects and improvements. While Congress and DOT praised the legislation, Congress had continued to take a hard line on raising the fuel tax which had remained unchanged since 1993. As a result, funding for repairing the infrastructure and other projects will be available for only the first three years of the legislation. While the bill was certainly an improvement over what we had, the funding (or lack thereof) could become an issue. Typically, the government spends about $50 billion annually on transportation projects and the gas tax yields about $35 billion per year. In addition to this shortfall, motorists are driving less and/or have switched to more fuel efficient automobiles, further reducing revenues.
Over the past few years, individual states that had projects underway or on the drawing board, having lost confidence in the ability of the Federal government to provide necessary funding, have increased their own fuel taxes. Last year, at least seven states raised their taxes by a range of $.035 to $.10 per gallon. Other states, such as Wyoming and Virginia had acted even earlier. Iowa, for example, with a $.10 increase, hopes to raise $215 million annually for their network of roads and bridges, an attractive supplement to federal funding. It is interesting that Congress has considered increasing fuel taxes political suicide, but apparently, state legislators feel no such inhibitions. There are many in Congress however, that support the states funding their own improvements. This of course, takes the pressure off Washington to find a satisfactory funding solution.
One interesting and unexpected scenario is currently unfolding in Tennessee where the governor is encouraging an increase in that state’s fuel tax, unchanged since 1989. For the past several years, all the federal legislation has included some kind of provision for funding bicycle and pedestrian facilities. In Tennessee however, the legislature is considering a bill that would prohibit the state from spending gas tax revenue on such projects. The proponents of the bill are suggesting that a tax increase bill is less likely to gain support if some of the money is diverted from the highways. In Tennessee, less than 1% of the state’s DOT budget is spent on bicycle and pedestrian facilities. Obviously, this bill is controversial, and supporters and opponents are taking strong positions, some rather extreme.
The larger concern of many is that if such a bill passes, it could spread to other states. Bill opponents say this could be devastating to the development of bicycle transportation infrastructure. Before this is over, expect to see strong lobbying on both sides.