Vermont officials say long-term fix needed for Highway Trust Fund
MONTPELIER -- Highway construction projects in Vermont will go on, thanks to an eleventh-hour vote in the U.S. Congress on Thursday. State officials are pleased with the emergency fix, but say long-term changes in the federal Highway Trust Fund are needed now.
Senate Democrats on Thursday agreed to an $11 billion Republican plan to extend federal transportation funding through May. The continuing resolution will allow Vermont, and every other state, to avoid making difficult choices on which road and bridge projects to fund, at least until next summer.
Had the funding been cut off, Vermont would be faced with putting 38 projects worth about $100 million on hold. Projects underway might also have been delayed because the federal government would stall reimbursements for construction payments.
"What we really need is a long-term funding solution for the Highway Trust Fund," said Chris Cole, director of policy planning and intermodal development for the state Agency of Transportation.
Gasoline taxes largely fund transportation spending in Vermont and on the federal level. Vermont effectively raised its tax on gas and diesel in 2013 to offset a loss in revenue caused by increased fuel efficiency. The Legislature tied a portion of the gas tax to the price of fuel by adding a 2 percent assessment on fuel purchases to the existing 19 cents-per-gallon tax. At $3.73 a gallon, Vermont's effective gas tax would be about 26.5 cents.
The federal gas tax of 18.4 cents per gallon has not been increased since 1993.
"What we need is a stable funding mechanism on the federal level," Cole said. "And we need a reauthorization bill of at least six years and not a series of continuing resolutions."
Cole said a lack of certainty on the federal share of funding Vermont highway projects makes it difficult to plan major reconstruction efforts and issue the necessary contracts.
"Interstate bridge replacements are a good example," he said. "We currently have two on I-91, in Brattleboro and Windsor. The Brattleboro bridge is $61 million and will take two construction seasons to fully complete. We get about $220 million a year in federal funds, but if we only get it in six-month increments you can't commit to the project. We need that six-year certainty."
Gov. Peter Shumlin also addressed the need for a long-term solution.
"It's disappointing that Congress did not address the long-term challenge of declining revenues going into the Highway Trust Fund," Shumlin said in a statement. "No amount of last-minute, short-term fixes will solve this long-term problem. Governing by crisis does not provide the certainty that states need to make smart investments in the future."
Associated General Contractors of America, a national trade organization that has a Vermont affiliate, has forwarded a plan it says would raise nearly $120 billion for the federal highway fund.
Its plan includes dedicating 15 percent of customs duties to the fund; instituting fees on driver's licenses, light duty truck tires, light duty truck registration; increasing the heavy vehicle use tax; increasing the tax on diesel; and indexing gas taxes for inflation. Increasing the tax on gas and diesel by 10 cents, alone, would raise $106 billion, the group said in a statement.
Cole pointed to a series of bridge replacements planned for state highways as potential casualties had federal funding been suspended. He cited two critical bridge replacements in Rutland City that might have been delayed to slow the state's highway fund "burn rate."
"They stopped a catastrophe," Cole said of Congress, adding that he lacks confidence that Washington will find a long-term solution anytime soon.
Rep. Peter Welch, D-Vt., who voted against the bill in the House because of the GOP's short-term funding mechanism known as pension-smoothing, said it was good that projects would not be disrupted, but said Congress should have done more to secure highway funding before embarking on its five-week summer break.
"The hallmark of a great nation is the recognition of the need to invest in its future," Welch said in a statement Friday. "America's roads and bridges are crumbling. A Band-Aid approach to replenishing the Highway Trust Fund won't get the job done. Congress needs to do its job and stop dodging tough decisions on this issue."
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