Local county road and bridge maintenance projects could see delays as gas tax revenues that help fund those projects are declining.
Most counties rely on gas tax revenues to help fund public works and maintain the local roads and bridges producers use to take their product to market. With social distancing and a boom in teleworking and homeschooling, people are driving less, resulting in decreased gas purchases.
Matthew Chase, executive director of the National Association of Counties, said the organization is hearing from rural counties about transportation budgets.
“When it comes to roads and bridges there are several sources of funding — gas tax is typically number one and we are obviously seeing massive declines,” Chase said.
He said some counties also rely on oil production and new or used vehicle sales.
“For our transportation infrastructure, between the gas tax, the new and used vehicle tax in some states, and the oil and gas bust, we are seeing incredible pressures on our infrastructure budgets,” Chase noted.
Soy Transportation Coalition Executive Director Mike Steenhoek said the loss of revenue will have a significant impact at the state and county level if COVID-19 continues to keep people off the roads.
Mike Steenhoek, Soy Transportation Coalition
“The fact that you are just having fewer gallons purchased is really going to have a major impact on the amount of work that is going to be able to occur in the foreseeable future,” Steenhoek said.
Douglas County, Neb., Commissioner and NACo President Mary Ann Borgeson said her county’s gas tax revenue, reported around April 10, dropped 15% from the March report and roughly 6% from the average of the previous 12 months. The county encompasses Omaha, stretching west to the Platte River.
“We will definitely see impacts on being able to get road projects completed that were on the books,” Borgeson said.
Thomas Nelson, county executive for Outagamie County, Wisconsin, in the northeast part of the state, told Agri-Pulse road projects must get done eventually, and delays only make them more costly.
“If you look at construction inflation, that is going up 3 or 4%," he said. "If you delay something by five years, soon before you know it, costs have gone up 25% and you’ve lost five years of life.”
Nelson boasts the county he represents has one of the largest dairy producers in the state of Wisconsin. “You’ve got the milk trucks lumbering down a road that really eats away at it and we’ve got to keep those fixed,” he said.
Missouri Department of Transportation officials already notified Lafayette County Presiding Commissioner Harold Hoflander they would delay repaving a rural stretch of highway in his county, which is located roughly an hour east of Kansas City.
“That’s on hold, that is not going to happen this year,” Hoflander told Agri-Pulse. “That is getting pushed down because (officials) know the income is not going to be there for the state to do that.”
Hoflander said since the gas tax revenues are released each quarter, he did not have numbers immediately available but he expects a significant decline.
Ed Hassinger, deputy director and chief engineer for the Missouri Department of Transportation (MoDot), told Agri-Pulse the state has already had to reduce the number of contracts it is putting out for bid next month by $40 million, or 30%.
He stated average passenger traffic volumes have dropped 35% in the state since mid-March.
“Our red flag goes up because you can pretty well tie traffic volumes to gas tax revenue, and Missouri is really dependent on fuel tax revenue both at the federal and state level,” he said.
Missouri’s fuel tax rate is 17 cents per gallon. MoDot’s director, whom Hassinger works under, is president of the American Association of State Highway and Transportation officials.
Hassinger said AASHTO is projecting a 30% drop in revenue for as much as a year to 18 months which, according to AASHTO, is a loss of about $925 million.
“State DOTs are forecasting a significant reduction in state transportation revenues that will challenge their ability to maintain and operate our transportation system in a way that can support the COVID-19 response,” Jim Tymon, AASHTO’s executive director, said in a statement.
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The decline in transportation across the country pushed state DOT’s earlier this month to call for roughly $50 billion in direct emergency assistance from Congress.
AASHTO is requesting backstop funding for State DOT’s based on a formula that would distribute $16.7 billion for the rest of fiscal year 2020, which equals a 30% state revenue cut over six months. About $33.3 billion would go toward fiscal year 2021, also a 30% state revenue cut.
The organization also is worried about the expiration of the Fixing America’s Surface Transportation (FAST) Act, which will expire in six months with no clear path for a renewal of funding.
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