WASHINGTON — State and local transportation decision-making fits no pattern and varies widely cross the country as governments try to cope with needs that overwhelm their available financing, according to a first-of-a-kind report released Wednesday.
The report, issued by the National Council of State Legislatures and the American Association of State Highway and Transportation Officials, contains the results of a 50-state review of state legislatures and departments of transportation.
“Each state must address the transportation funding crisis within its unique balance of governmental powers,” the report concluded. “Overlap and tension between the executive branch and the legislature are nowhere more apparent than in the power of the purse.”
“A key theme in the NCSL-AASHTO survey data was the tension between legislatures and DOTs about the appropriate level of legislative involvement or oversight in transportation planning,” the report said.
The two groups found that federal government aid accounts for about 20% of transit and highway funding. But there are differences in how that money is handled.
“Although some legislatures can significantly influence [state department of transportation] spending levels, others have only a limited ability to do so,” the report said.
At least 15 states have minimal legislative involvement with federal transportation funds, allowing at least some of the funds to flow directly to their DOTs without legislative appropriations, the report found.
Most states, however, reported that they allocated federal funds to the DOT through legislative approval or appropriations at the agency, program, category or even project level.
Joung Lee, associate director of AASHTO, says that given the sheer variety, “it’s quite telling that each state shows that they’ve kind of figured out a way to suit their own needs.”
States provide almost half of surface transportation funding. Most of that comes from state fuel taxes, which seven states have indexed to inflation. The rest rely on federal funds, motor vehicle and motor carrier taxes, or bond proceeds.
Twenty-three states have constitutional provisions — and three have statutory provisions — that require state fuel tax revenue to be used exclusively for highways and roads.
At least six states explicitly bar the diversion or transfer of revenues to other purposes. But such restrictions are not always effective, the report warned.
Local governments pay about 30% of the nation’s transportation infrastructure bill. In 46 states, much local revenue comes from state sharing of fuel tax or other income. At least 27 states distribute funds primarily by statutory formulas based on equal distribution, population, road mileages or other criteria.
“A variety of factors have negatively affected the ability of traditional transportation revenues to provide needed transportation infrastructure and maintenance,” the report said. “In this environment, states are turning to a host of innovative finance mechanisms — such as bonding and debt instruments, federal debt financing, credit assistance and fund management tools, and public-private partnerships — to help leverage traditional funding sources.”
But state legislation may be needed. For example, of the 31 states and Puerto Rico that had enabling statutes for P3s as of April, nine required some form of legislative approval for projects. P3s themselves can differ in the projects, the procedures and the timing when approval is required.
The use of grant anticipation revenue vehicles also differs. Twenty-nine states and Puerto Rico have issued Garvees. But four states require further legislative approval or appropriation before Garvees can be issued. Colorado and California place limits on Garvee issuance.
The variety and complexity of transportation financing found in the NCSL-AASHTO survey parallel research from the Pew Center for the States released last month, which found that too many state legislators and officials lack basic information about what their spending accomplishes.
AASHTO’s Lee said he hopes the new survey of how other states are managing transportation may lead to recognition and adoption of better practices.