Vermonters aren’t buying as much gasoline these days. And Deputy Secretary of Sue Minter says that’s not necessarily a bad thing. The proliferation of more fuel-efficient automobiles, and the use of other gas-saving transportation strategies are, after all, things Minter’s agency has sought to encourage.
“But unfortunately with our current revenue stream, that has a negative impact on our ability to invest in improving the roads and bridges on which they drive,” Minter says.
An unexpected revenue downgrade has prompted a round of budget cuts at the Agency of Transportation. And officials say the fiscal problems now could signal more trouble down the road.
Economists for the state say revenue from the gas tax will come in about $2.5 million under previous projections.
The downgrade amounts to less than 1 percent of a nearly $700 million transportation budget. And Secretary of Transportation Brian Searles says the cuts won’t impact any road projects.
“It’s not a huge deal, but it’s one we must respond to, and immediately go to thinking about the long term, and what sort of model replaces the gas tax over time,” Searles says.
The gasoline tax is the chief source of funding for road and bridge upkeep both for Vermont and the federal government. And a steady decline in gas sales has begun to sap funding capacity here and in Washington, D.C.
The Federal Highway Trust Fund – the pool of money that supports more than half of highway funding here – was going to run dry at the beginning of this month, until Congress approved a temporary funding stopgap that will keep highway project schedules on track through next May.
But federal lawmakers’ solution – borrowing from the general fund – only ensures funding through next spring. And Searles says the future of transportation funding is anything but secure.
“And we have the harsh reality of May through September of 2015, for which there is no Band-Aid yet,” Searles says. “And nobody’s really talking about a different approach.”
The Federal Highway Trust Fund is scheduled to hit a zero balance at the beginning of Vermont’s busy summer construction season. Searles says federal lawmakers aren’t close to uniting behind a plan that would restore long-term stability to transportation revenues.
“The fact is that this is a continuation of an old story,” he says.
Searles says the revenue problems aren’t unique to Vermont. He says Congress will need to adopt an alternative revenue structure – something based on tolls or vehicle-miles traveled, for instance – if it hopes to raise enough money to maintain a vast road and bridge infrastructure.
“It’s going to be a long national conversation before we ever get to the point where people are willing to submit their driving habits to scrutiny by the government in order to pay for the transportation system,” Searles says.
Searles says unavoidable delays in some highway projects will allow the state to absorb most of the $2.5 million reduction without postponing previously scheduled projects. The agency will also delay the purchase of new equipment.