If revenues go down… should we spend more?

The Federal Highway Administration Traffic Volume Trends report for October, 2008 says we are driving less.  Traffic (“vehicle miles traveled” or VMT) on all roads in Virginia dropped over 4% in October, compared to October 2007.

We’re driving less.  We’re using more fuel-efficient cars.  Therefore, we are not generating the gas taxes used by Federal and state agencies to fund highway maintenance and new construction. 

When your income goes down and it’s looking like a trend, do you borrow money to add a new room onto the house?  When tax revenues for transportation projects go down… should Prince William County go on a road-building spree?  

State officials in Virginia are cutting back – again.  Last June, the Commonwealth Transportation Board (CTB) cut 10% ($1.1 billion) from the 2009-2014 Six Year Plan.  Virginia is required by law to fund maintenance before construction, so state officials are predicting that we will run out of funding for any (any) new construction projects in less than 10 years 

Last June’s reduction was not enough.  The CTB is preparing to cut another 10% without waiting for next June’s annual revision.  CTB is scheduling a mid-year “eek, we’re going to run even lower on revenues than predicted”  cut of perhaps $1.6 billion more against the current $10.1 billion plan. 

(In Northern Virginia, VDOT will hold a public hearing  on Jan. 13,  at 7:00pm at the Fairfax County Board Room, 12000 Government Center Parkway in Fairfax.)

At the national level, Federal officials are pessimistic about long-term funding.  

The Federal Highway Administration (FHWA) announced in a December 12, 2008 news release that as “a result of the continued decline in VMT and the use of more fuel efficient cars, the Highway Trust Fund, which is primarily funded through federal gas tax receipts, collected $31 billion in revenue between October 2007 and September 2008 – $3 billion less than it collected in Fiscal Year 2007, while federal transportation spending increased by $2 billion.”

Three months ago, Congress approved a short-term bailout for the Highway Trust Fund.  They transferred $8 billion in general revenues to make up for the current shortfall in gas taxes. 

However, FHWA did not assume this was a long-term solution.  There may be a short-term surge in funding for infrastructure… but in the long run, it looks like the gas tax will generate too little money.

FWHA announced in a September 19, 2008 news release “While the Highway Account has been temporarily replenished, we should not delude ourselves into thinking the fundamental problems of transportation funding are somehow resolved. It is imperative that the debate begin now as to the most effective means to finance and improve highways and transit infrastructure in the U.S. Clearly, the current tax and spend model is both unsustainable and unresponsive to the country’s needs.” 

So the trend is clear – there is too little money now, and there will be less $$$ than needed in the future for all the proposed projects.

So what are Prince William County officials doing?  Why, they’re planning to approve a significant increase in road building. 

The Planning Commission and Board of County Supervisors will vote on a new Transportation Chapter in the Comprehensive Plan next year.   In Table 2 of that plan, they propose to build over 700 lane miles of new roads before the year 2030.  

That Table 2 proposal would require a substantial (25-50%) increase in road construction funding from the average amount generated over the last few years.  Think that’s realistic, or pie-in-the-sky?


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