From the Dayton Daily News: Ohio out of money for new road projects, prompting talk of gas tax hike

Chad LaRueNews

From the Dayton Daily News:

By Laura A. Bischoff Richard Wilson, Columbus Bureau

Within weeks, new Ohio Gov. Mike DeWine and state lawmakers will face a huge challenge that impacts every Ohioan every day: how to come up with hundreds of millions of dollars to pay for road and bridge building and maintenance projects.

Former governor John Kasich opted to issue $1.5 billion in bonds against future tolls collected by the Ohio Turnpike Commission to generate cash for construction projects. But that money, which started flowing in 2014, runs out later this year.

Fix Our Roads Ohio, a broad-based coalition that includes chambers of commerce and local government groups, is making the case for increasing the state gas tax for the first time since July 2005 and levying a fee against the 15,000 electric cars registered in Ohio.

Brian Martin, executive director of the Miami Valley Regional Planning Commission, said the lack of funding not only affects Ohio Department of Transportation projects, but also county engineers, Greater Dayton Regional Transit Authority and the MVRPC.

“We’re showing about a million-dollar loss starting in 2022 compared to what we have today,” Martin said. “If that continues we’ll be up to $1.8 million in terms of our own regional pot of federal funds. That’s two or three projects that are huge for our region.”

What local projects could be at risk?

Major construction projects are ranked in three tiers. Tier 1 projects already have funding lined up but lower ranked projects won’t move up the list until more funding is found, said ODOT spokeswoman Erica Hawkins.

Some projects in the Miami Valley that aren’t fully funded yet are at-risk of delays including:

* Improvements to U.S. 35 interchanges at Smithville Road and Woodman Drive, estimated at $30.6 million;

* Plan to create full interchanges along U.S. 35 at Factory and Trebein roads, currently estimated at approximately $146 million, according to ODOT records;

* Plans to to improve the I-70 interchange at Dayton Airport Access Road and U.S. 40, a $12 million project, is a Tier 2 priority project, but only about $200,000 for the right-of-way acquisition has been paid.

Tier 1 projects that have funding set include:

* U.S. 35 Super Street improvements near Xenia.

* Third lane from U.S. 68 to Ohio 73 in Clark County.

* Widening of U.S. 35 from Steve Whalen Blvd to I-675 in Montgomery County.

Transit officials, local leaders pushing for gas tax increase

“The most obvious thing to try to look at, because it raises money quickly, is to look at the motor fuel user fee,” said Curt Steiner, a well-connected Republican public relations consultant and spokesman for Fix Our Roads Ohio.

The Ohio gas tax is 28 cents per gallon while the federal fee — unchanged since 1993 — is 18.4 cents per gallon. Each penny of gas tax raises about $66 million a year in Ohio.

“The facts are overwhelming and disturbing,” said Dean Ringle, executive director of the County Engineers Association of Ohio. “Without decisive action by state policymakers, this problem will become a crisis that will cripple our economy. Reduced roadway construction will trigger worker layoffs. Businesses dependent upon trucking will be hurt by inadequate roads and bad bridges. Delays and congestion cost money, and that affects everyone.”

Ohio’s gas tax is lower than neighboring states, except for Kentucky where it’s 26 cents per gallon, according to the American Petroleum Institute. The gas tax is 58.7 cents in Pennsylvania, 44.1 cents in Michigan, 42.9 cents in Indiana and 35.7 cents in West Virginia.

Fix Our Roads Ohio says indexing the gas tax to highway construction inflation rates and aligning it with rates in neighboring states “would be a sensible guideline.”

Ringle, who is part of Fix Our Roads Ohio, said the gas tax is fair because it’s a user fee — if you don’t drive, you don’t pay it.

“What ever is proposed won’t be the solve all, fix all, because we can’t afford that. But we can afford something to make our ability to have our infrastructure work,” he said.

Waiting for the federal government to fix transportation funding hasn’t worked, he said. Ohio has fallen behind while surrounding states took matters into their own hands by increasing their gas taxes and registration fees, said Ringle, who served as Franklin County engineer for 17 years. “I think the states are starting to invest in themselves and that’s kind of key.”

Fix Our Roads Ohio is also advocating that Ohio identify a dedicated funding source for public transit. Ohio spends 63 cents per person on public transit, ranking it 41st among the 50 states and District of Columbia, according to the American Association of State Highway and Transportation Officials.

Ohio has been on a tax-cutting spree making gas tax hike questionable

The DeWine administration is expected to introduce a two-year transportation budget bill in February, which is typically adopted by March 31 so that it takes effect by July 1 when the new state fiscal year starts.

Still, selling Ohioans and its policymakers on a gas tax hike could be tough.

Over the past dozen years Ohio has been on a tax-cutting spree: reducing the personal income tax rates, eliminating some business taxes, adopting new tax breaks and wiping out the state estate tax.

Americans for Tax Reform State Projects Director Doug Kellogg said “We are extremely concerned about gas taxes because they hit everyone.”

Instead of raising taxes, some Ohio leaders believe the state should look at other ways to streamline government costs, such as criminal justice reforms, and raise other revenue, such as legalizing sports betting.

State Rep. Niraj Antani, R-Miamisburg, who says he has never met a tax he couldn’t cut, said the gas tax is regressive in that it isn’t tied to the payer’s income.

“Any increase in the gas tax would be a hammer on the working class people so I’d oppose it,” said Antani.

New state Rep. Jena Powell agrees.

“When I hear tax increase, I hear a larger burden on the people,” said Powell, R-Arcanum, one of the newest members of the state House of Representatives. She represents the 80th District which includes Miami County and part of Darke County.

“I’m going to do everything I can to fight for lower taxes overall,” Powell said.

Transportation budget expected to fall to $1.5 billion

The turnpike bond program boosted Ohio’s road and bridge construction budget to a peak of $2.4 billion in fiscal year 2015 but with the money depleted, the budget is expected to drop back to about $1.5 billion, plus an extra $200 million for change orders and other items.

On top of that, Ohio spends $200 million to $250 million each year on road maintenance, such as filling potholes, fixing guardrails and plowing snow.

Ohio has 262,350 road lane miles and 44,657 bridges and is sixth in the country for total vehicle miles traveled at 118.6 billion each year.

Traffic jams, potholes and lousy pavement costs motorists each year: 201 million wasted hours and $4.7 billion, according to the Texas Transportation Institute 2015 Urban Mobility Scorecard. On average, Dayton area commuters blow 25 hours a year sitting in traffic tie ups, which costs them $590, the scorecard said.

Mark Donaghy, CEO of the Greater Dayton Regional Transit Authority, called the financing of turnpike revenue “a BAND-AID on a cancer.”

“The problem was big before than and it was big even with it,” Donaghy said. “A great job has been done with prioritizing what gets funded, but it still pushes many things back that need to be taken care of.”

RTA relies on state transportation funds to maintain and replace its fleet of 270 buses. Donaghy said RTA’s five-year bus replacement plan is an estimated cost of nearly $100 million and plans to upgrade Dayton’s aging electric infrastructure for buses is estimated at $120 million.

“We know that’s something that’s going to have to be spread over a great period of time simply because there’s no way we can fund something that large in the current situation,” he said.

Montgomery County Engineer Paul Gruner said the lack of funding for major transportation projects is “a long-term problem.”

“ODOT has moved some projects back to farther years out because they didn’t have the money to build them when they thought they could,” Gruner said. “Their program this year will be $1.7 billion compared to $2.4 billion spent in 2014. That’s a pretty significant drop mainly because they’ve been propping it up with the turnpike bond program. But that’s ending.”

ODOT spokesman Matt Bruning said the funding just isn’t keeping up with the increase in costs. What cost a $1 in 2006 now costs $1.56, Bruning said.

“We also now have fuel-efficient electric vehicles. The costs of everything has gone up and revenue is the same, so borrowing power is reduced,” he said.

Bruning clarified that the lack of funding is just for major construction projects and does not impact routine snow removal or pothole repairs.

State motor fuel tax rates

Here’s how Ohio’s gas tax compares to neighboring states (cents per gallon)

  • Pennsylvania 58.7 cents
  • Michigan 44.1 cents
  • Indiana 42.9 cents
  • West Virginia 35.7 cents
  • Ohio 28 cents
  • Kentucky 26 cents

Source: American Petroleum Institute