Why Are New Transportation Investments Needed?

One of AGCs top policy goals this year is passage of a transportation investment package. With coalition partners from business labor and the environmental community AGC has urged Governor Inslee and the Legislature to develop and pass during the 2013 legislative session a comprehensive statewide transportation investment and funding package that makes a significant down payment on the $50 billion need identified by the Connecting Washington Task Force.

Why the need for a transportation investment package?

Its a worthwhile investment...

While any discussion of why the need? regarding transportation funding includes discussion of current and future unmet needs its important to start with some of the positive reasons for investing in our transportation system:

  • Results: Just a few recent examples of positive results from transportation investments -- Highway improvements have led to the lowest fatality rates since the 1950s. New technology like weigh-in-motion keeps freight moving saving the trucking industry $12 million in 2011 alone. Through transportation projects nearly 300 fish passages have been restored improving access to 900 miles of stream habitat. More than 80 mobility projects in recent years have reduced congestion and removed chokepoints.
  • Stewardship: WSDOT and the construction industry are good stewards of funds. With the 2003 and 2005 gas tax increases the state promised to build 421 specific projects. Nearly all are done with 90% completed on-time and on-budget. Plus WSDOT is a recognized national leader with regard to transparency and performance management measures.
  • Job creation: A transportation investment package would boost the construction industry that is still experiencing an unemployment rate twice the general rate and facilitate private economic growth throughout the state.

Funds are diminishing...

Check out this graph from WSDOT -- state transportation funding is on its way down a steep fiscal cliff.

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The reasons for diminished spending include--

  • Inflation: In 2001 the 8 cents of the gas tax that funds maintenance generated $252 million per year; by 2012 it generated $134 million in constant dollars. This is a 47% decline in value due to inflation.
  • Fuel efficiency: More fuel efficient cars are great in many ways but the downside is that the state is expected to lose $5 billion in projected revenue through 2023 as fuel consumption is reduced. Keep in mind that the gas tax funds 76 percent of all state transportation investments.
  • Keeping commitments: 9.5 cents of the gas tax enacted in 2003 and 2005 with the promise to build 421 specific projects will be used for several more years to pay off the bonds that allowed rapid construction of those projects.
  • Declining federal support: WSDOT anticipates a 20% reduction in federal support for at least the next few years.

Of the 37.5 cents per gallon state gas tax WSDOT has only 8 cents for maintenance and congestion relief projects. This chart tells the story:

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The needs are great...

Our states population is projected to grow by more than 28 percent during the next decade. Annual freight volumes are expected to triple by 2035. Washington ranks #6 on Forbes’ new list of states that will boom in next ten years. Transportation improvements will be critical to fostering that boom. Meanwhile...

  • $10 billion maintenance operations and preservation shortfall: While needs are growing WSDOT cannot preserve the states existing highways bridges and ferry system at current levels. Cities and counties which rely significantly on state funding via the gas tax are in similar straits. Meanwhile public transit systems have had to cut services while demand is increasing. According to the Connecting Washington report the combined ten-year maintenance operations and preservation shortfall to maintain state and local roads at a 90% fair or good condition is $10 billion.
  • Incomplete mega-projects: Mega projects under construction to reduce congestion accommodate growth and improve safety that are not fully funded include SR 520 I-90 Snoqualmie Pass US 395 North Spokane Corridor I-405 Corridor.
  • Unfunded projects: Projects needed to reduce congestion accommodate growth and improve safety but without the funding to proceed include SR 167 extension SR 509 extension I-5 Columbia River Crossing SR 522/US 2 Corridor.

It is unlikely in this political and economic environment that the Legislature will pass an investment package sufficient to meet all of these needs. But AGC believes it is vital that a significant plan be passed this year.