States scramble as federal highway funding erodes

By one measure, Maryland's federal highway funding fell 9 percent since 2008.

As drivers travel aging roads and crumbling bridges, federal highway funding is failing to keep pace with inflation in nearly every state — and some such as Maryland are suffering a sharper decline than others, according to an analysis of transportation spending.

By one measure, the amount of federal highway money available to Maryland has fallen nearly 9 percent since 2008, to $587 million last year, the sixth-steepest decline in the nation. State officials and independent analysts note that other metrics show the state is faring better.

Transportation professionals and policymakers who follow the issue closely say federal highway funding is not keeping up with the costs of maintaining the nation's infrastructure, forcing states to fill the gap with taxes and tolls. Nearly a quarter of Maryland's highways and major roads require resurfacing or reconstruction — a greater share than the national average.

Highway funding will soon be a leading issue in Washington, where lawmakers face a May 31 deadline to reauthorize the federal highway trust fund. In Annapolis, meanwhile, Republican Gov. Larry Hogan plans to roll back part of the state gas tax increase enacted by his Democratic predecessor.

"The funding mechanism we have is clearly inadequate and the whole system is flawed," said Rep. John Delaney, a Democrat from Potomac who has emerged as a leading voice in Congress on infrastructure. "Maryland, in particular, is getting a bad deal."

Funding from the 60-year-old federal highway trust fund fell to $39.8 billion in 2013, a 3.5 percent decline from five years earlier, according to an analysis by the Associated Press. Adjusted for inflation, the amount of available highway dollars dropped in every state but New York and Alaska.

The primary source of revenue for the federal fund is the 18.4-cents-per-gallon federal gas tax.

For Maryland, available highway funding fell by $57 million over that five-year period, according to the Associated Press. Per capita spending also dropped — from about $113 in 2008 to $99 in 2013 — leaving the state ranked among the lowest by that measure in the nation.

State officials say those numbers are skewed by several factors. A single project — the $2.4 billion expansion of the Woodrow Wilson Memorial Bridge over the Potomac River near Washington — inflated the state's federal funding in the mid-2000s, they say. The federal government, which managed the bridge, paid a larger share of the cost than it would have on other projects.

The Associated Press analysis considers the amount of federal dollars apportioned by formula along with special allocations such as the Wilson bridge project. But by another measure — the amount of money obligated for contracts — the state's federal funding increased over the period.

There is nevertheless broad consensus that the highway trust fund is not keeping pace with the growing demands of an aging highway system. About 24 percent of Maryland's major roads and highways are due for resurfacing, according to the American Road & Transportation Builders Association, and 27 percent of its bridges are structurally deficient or obsolete.

Those percentages are slightly higher than the national average.

"We need to spend pretty much double," said Alison Premo Black, senior vice president and chief economist at the Washington-based association.

Maryland's infrastructure woes drew attention this month when a chunk of concrete fell from the bottom of the Interstate 495 overpass in Morningside onto the car of a Prince George's County woman. She was not hurt, but the incident prompted the state's acting transportation secretary, Pete K. Rahn, to order an immediate inspection of 27 state-owned bridges.

Total state and federal road funding exceeded the rate of inflation over the past decade, but the pace has tapered off in recent years as the amount coming from the federal government declined. The American Association of State Highway and Transportation Officials estimates that annual road and bridge spending by all levels of government is falling $32 billion short of what is needed.

Gasoline tax revenue has grown little since 2007 — and has actually declined on an inflation-adjusted basis, according to some analysts — as vehicles have become more fuel efficient and people cut back on driving.

"The method that we use to fund transportation — the primary method, the motor fuels tax — is a model that doesn't work anymore," said David Ellis, the top infrastructure investment analyst at the Texas A&M Transportation Institute.

Most states are simply looking to maintain their current highway systems rather than add to them, said Jim Tymon, director of policy and management at the association of highway officials.

"A lot of those facilities are in need of really massive rehab, almost reconstruction from the ground up," he said.

Hogan ran for governor last year in part on a pledge to roll back tax increases enacted by Gov. Martin O'Malley. Among Hogan's top targets was an increase in the state's gas tax, which is also used for transportation projects. O'Malley and the General Assembly approved legislation to raise Maryland's 23.5-cents-a gallon tax by 20 cents by July 2016.

Hogan has proposed to repeal the automatic increases indexed to inflation that were approved by the legislature. Removing the automatic increases could prove dicey politically if federal funding slips, or if Congress approves a short-term funding bill that kicks difficult choices down the road.

Hogan spokeswoman Shareese Churchill, reiterating a theme from last year's campaign, said the O'Malley administration raided the state's transportation fund to balance the budget.

"A tax that grows each year without a single vote from the legislature is just plain wrong, regardless of the timing or results of this report," Churchill said in a statement. "Maintaining and growing our transportation infrastructure is essential to the health of our state's economy, but we must look for greater efficiencies as we balance our transportation and fiscal priorities."

With prices at the pump well below what they were a year ago, some advocates say this year might offer a rare opportunity to raise the federal gas tax — a move Congress last made under President Bill Clinton in 1993 — to shore up the solvency of the federal trust fund. Some Senate Republicans have hinted that they might be open to such an increase.

"If there was ever a time to address the gas tax, if there was ever a time to really have this discussion, I think now may be it," said Casey Dinges of the American Society of Civil Engineers.

But Dinges acknowledged that such a move would be a tough sell. Key House Republicans, including Bill Shuster, chairman of the Transportation and Infrastructure Committee, have said repeatedly that raising the gas tax is not a realistic option this year.

"I know the popular thing that a lot of people are talking about is the gas tax," Shuster, who represents central and southwestern Pennsylvania, said in a recent speech. "But I just don't believe the votes are there in the Congress at this point to do that."

Instead, many lawmakers are focusing on a proposal pushed by Delaney to tax the overseas holdings of U.S. corporations.

Delaney's legislation, which has attracted bipartisan support, would tax money parked overseas at 8.75 percent to raise $120 billion for the trust fund. The bill also would create a separate fund that Delaney said could leverage another $750 billion in infrastructure projects.

The idea, along with versions similar to it, has popped up in several pieces of legislation on Capitol Hill. President Barack Obama endorsed a similar plan, albeit at a higher, 14 percent tax rate, in his federal budget proposal this month.

"At precisely the moment when we need more money in infrastructure, we have reduced funding," Delaney said in an interview. "In many ways that's just a national tragedy."

The Associated Press contributed to this article.

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