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Anticipated Federal Funding Shortfall Makes for Bumpy Ride at TDOT

Bickering in DC may mean rough road ahead in TN’s transportation dept budget

Tennessee is said to be on relatively solid financial footing as a result of having no highway-construction debt.

But federal budget bickering is causing uncertainty for state Department of Transportation officials trying to map out spending on projects down the road.  New transportation projects may have to be shelved until more cash gets routed to the state through Washington, TDOT Commissioner John Schroer said this week.

The possible shortfall comes as a result of the most recent transportation bill passed by Congress, MAP21 –- Moving Ahead for Progress in the 21st Century – which went into effect Oct. 1, 2012, and is only currently funded through October of 2014, he said.

According to Schroer, the state could lose about $850 million in the first year, and $300 million in the years “thereafter.”

“We don’t know we’re going to lose it,” Schroer told reporters after a budget hearing before Republican Gov. Bill Haslam Monday.

“They could come and pass a new authorization for MAP21 and funding could be in place,” Schroer added. “If that’s the case, we’d be tickled to death. But there’s a possibility that that won’t happen, and so I felt the governor needed to be aware of that.”

However, the quality of the roads in Tennessee won’t likely diminish as a result of lost funding, Schroer predicted. The state is planning enough money for road-infrastructure upkeep to continue maintenance of existing thoroughfares for the year, though new projects are not likely to get funded.

Part of the reason Tennessee will not face more trouble with the loss of federal funding is that the state is one of only five in the nation operating in the black when it comes to transportation finances. That means all of the state’s transportation funds go to road building and road upkeep rather than bondholders, Schroer said.

Haslam said the state’s transportation budget will be among the “trickiest” for the administration, both because it isn’t funded through the state’s general fund like most agencies and also because a “huge falloff” in federal dollars will leave a significant hole.

But the state has for some time been taking a frugal approach to transportation financing, and it will pay off if lean times are indeed ahead, said the governor.

“The good news for Tennessee is because we don’t have road debt, and because we’ve been responsibly managed for years and years — as the commissioner said, before any of us got here –- we’re in a much better situation to make certain that we can do basic road maintenance and address safety issues,” Haslam said to reporters after the hearing.

“That being said, it is a very difficult time for the department obviously because they don’t know what will happen next year,” Haslam added. “This situation is more out of our hands than any of the other department budgets.”

TDOT’s proposed budget is $1,807,285,800, about $10 million less than the previous year’s funding request, with approximately $975 million coming from the feds, $794 million from the state and $38 million from localities, according to budget documents.

Construction projects, maintenance and preservation of existing infrastructure and transportation grants make up 91 percent of the TDOT budget, Schroer said. The department also has a “backlog” of “projects which have been funded in some form of development,” that comes in at a projected cost of just under $8.5 billion.

Because federal funding is often tied to specific spending, TDOT has a limited amount of money to address the backlog, and therefore the department prioritizes projects based on safety, congestion, economic development, and other factors, Schroer said.

However, Schroer told reporters that it was “premature” to discuss any changes to funding the department within the state — such as an increase to the state’s gas tax – until there was a better idea of how federal dollars would be passed out to the states in the future.

In order to address the large backlog of transportation projects, the department has adopted an “Expedited Project Delivery” system, under which teams of safety experts and planners are sent to analyze project sites to “see if there’s a way that we can do what we need to do to solve the problem without putting all the bells and whistles on a project,” Schroer said.

While cities may want to add more aesthetic qualities to their road projects, such as bike-paths or brick walkways, TDOT’s job is specifically to produce the transportation side of the road, Schroer said.

“With a backlog (of $8.5 Billion) how is it fair that we can spend that money for enhancements to a road, when other cities and communities don’t get a road at all,” Schroer said.

The EPD program for 2015 fiscal year will reduce the cost of five projects to $9,236,700 from an expected cost of $180,385,000, and TDOT will analyze another 25 transportation projects this year to consider for the program, Schroer said.

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