The Missouri Highway Commission says it’s being forced to halt all new projects because of a lack of funding. Jessica Machetta reports.
MoDOT Director Dave Nichols says because of declining fuel tax revenues added to the rising costs for materials, labor and employee benefits, the department will have to focus on maintenance and preservation.
Nichols says Missouri’s budget for road and bridge construction was $1.3 billion just five years ago, is nearly half that this year, and is expected to fall to a projected $325 million in 2017 if revenue streams aren’t increased.
“We won’t be able to do as much as we would like to do but the work you would see is resurfacing type projects and bridge repair type projects,” Nichols says, adding that those projects will be done “at a very small level.”
There has been talk of a one-cent sales tax proposal in the legislature, but nothing has been proposed yet. A sales tax or a fuel tax increase would have to be approved by voters.
Highway Commission Chairman Joe Carmichael says he and other commissioners have no choice but to scale back on road and bridge projects, some of which are safety initiatives.
“But when considering the financial forecast for the rest of this decade, we had no choice,” Charmichael says. “We aren’t even going to have enough money to maintain the system we have today.”
Carmichael says inflation has decreased MoDOT’s purchasing power by more than 50 percent. What was 17 cents (state fuel tax per gallon) of purchasing power in 1992, the last time fuel taxes were increased, is now about eight cents and decreasing each year. The cost of asphalt, concrete and steel – the staples of the industry – are as much as 200 percent more than they were in 1992. And employee healthcare and retirement costs have also steadily risen.
The commission reports the looming insolvency of the Federal Highway Trust Fund — expected in the fall — is a big reason, too.
“It makes no sense to be adding projects that eventually increase our maintenance responsibility when we won’t be able to maintain what we have today,” Carmichael says.
Cost-share program that has sped up the construction of local projects have also been suspended.