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WASHINGTON – One of the many side effects of stay-at-home orders during the coronavirus pandemic is a catastrophic decline in state and local transportation funding, which officials said threatens to bring road and bridge construction to a screeching halt for the next year and a half.
“It’s a very large concern,” Patrick McKenna, director of the Missouri Department of Transportation and president of the American Association of State Highway and Transportation Officials (AASHTO), said of a projected 30% decline in transportation revenue nationwide. “This is a pressing, immediate issue.”
The financial crisis that resulted from shuttering much of the economy forced governments big and small to postpone construction, even as roads, bridges and tunnels crumble. Collections of gas taxes and tolls that fuel construction have plummeted as motorists stay home. Despite historically low interest rates, voters and their governments are leery of borrowing because of uncertainty about repaying the debt.
In Ohio, an interstate project in downtown Columbus was punted for a year because of reduced fuel taxes. Missouri delayed a handful of projects valued at $40 million slated for May. North Carolina postponed more than 100 transportation projects valued at $2.2 billion during the next year because of concerns that reductions in traffic volume would translate into steep reductions in fuel and motor-vehicle taxes.
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Tolls plunged 50% to 90% at facilities nationwide because of fewer vehicles on the road, according to the International Bridge, Tunnel and Turnpike Association (IBTTA), a trade group for 342 toll facilities in 34 states. The facilities generate $20 billion in tolls per year to maintain and upgrade 6,300 miles of highways, bridges and tunnels.
Matt Chase, executive director of the National Association of Counties, said officials have been told to cut their budgets because the federal government wouldn’t bail them out.
“We are very disappointed that Congress left us behind,” Chase said April 22. “Our gas taxes have essentially stopped in the last six weeks. How are we going to repair our roads and bridges?”
Transportation advocates hope to hitch a ride on the next federal aid package. AASHTO asked Congress for nearly $50 billion for operations and construction during the next 18 months. IBTTA asked congressional leaders for $9.2 billion to offset lost revenue projected over the next year.
“I think everyone is thinking about infrastructure as part of the next phase,” said Patrick Jones, CEO of IBTTA. “We are hopeful that there will be some type of assistance.”
States lose fuel for construction
State transportation officials are trying to get their arms around the prospect that one-third of their budgets is evaporating through the lack of driving that provides state fuel tax, vehicle registration fees and highway user fees.
The state-level losses are compounded by the lack of matching funds from the federal government, which typically quintuples how much states can build.
In Missouri, McKenna projected about $1 billion in lower transportation revenue during the next 18 months. He said it was worse than that because half that amount – about $530 million – would have been matched by $2.1 billion in federal revenue that would also be lost.
“So our construction program could take a $2.6 billion haircut” during the next 18 months, McKenna said. “If that were to play out, in our current program, you’re looking at 400 bridge projects and 20,000 lanes of roadwork. It’s significant.”
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In North Carolina, Transportation Secretary Eric Boyette warned that traffic volume was down 30% to 50%, depending on the road, leading to a projected loss of $300 million in the fiscal year ending June 30.
Four projects valued at a combined $648 million to widen Interstate 95 to eight lanes were deleted from the state’s 12-month spending plan, which had anticipated start dates for sections in July and December. Two projects worth a combined $280 million to upgrade two sections of U.S. 70 were dropped from planned starts in November and January.
“This loss of revenue will require significant reductions in expenditures,” Boyette told state legislative leaders April 7. “Modeling indicates it will take months to bring suspended projects back.”
Bridging support for transportation
Transportation funding typically enjoys broad, bipartisan support in Congress, but emergency requests for funding come at an awkward time because they overlap with the routine highway bill that lawmakers must debate.
The five-year highway bill expires Sept. 30. Congress needs to negotiate an extension to provide hundreds of billions of dollars to state and local governments for as long as the next six years.
President Donald Trump said he would like to provide money for infrastructure in the next spending package to combat coronavirus because roads, tunnels, highways and bridges need help.
“They have to be fixed,” Trump said. “So hopefully, we’ll get an infrastructure bill.”
House Speaker Nancy Pelosi, D-Calif., has repeatedly called infrastructure a priority.
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“As we fight the virus day to day, we must work on an infrastructure package for recovery that addresses some of the critical impacts and vulnerabilities in America that have been laid bare by the coronavirus,” Pelosi said.
After Congress approved several coronavirus relief packages worth trillions of dollars, conservative lawmakers may balk at sending federal funding to state and local governments.
“We’re not interested in revenue replacement for state governments,” Senate Majority Leader Mitch McConnell, R-Ky., told Fox News last month. “We’re interested in trying to help them with anything related to coronarivus.”
Tolls curbed by fewer cars on road
Bridge, tunnel and turnpike traffic has suffered nationwide as fewer vehicles are on the road.
Massachusetts projected a $38 million loss in tolls this year along the Massachusetts Turnpike and other facilities.
Some toll bridges, including Maryland’s Chesapeake Bay Bridge and those operated by the Delaware River Joint Toll Bridge Commission in Pennsylvania and New Jersey, stopped collecting cash tolls in March to avoid spreading the virus between motorists and collectors. About three-quarters of Delaware River motorists have automated E-ZPass, and those without it are mailed bills. Maryland suspended sending notices for Bay Bridge tolls due until 30 days after the emergency ends.
Jones, of the International Bridge, Tunnel and Turnpike Association, said some agencies tap reserves to pay for operating costs such as paying toll collectors, even though they no longer staff booths, or maintenance workers on reduced schedules. Even if no federal assistance is provided, tolling facilities will operate while perhaps reducing staff at service plazas or postponing major projects such as adding traffic lanes, he said.
“The day-to-day operation is going to happen,” Jones said.
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The Ogdensburg-Prescott International Bridge in upstate New York saw a significant drop in traffic after Trump and Canadian Prime Minister Justin Trudeau decided March 18 to close the northern border to nonessential traffic to hinder the spread of the virus.
The bridge carried 24,000 cars and 4,800 trucks in March 2019, according to Steve Lawrence, the Ogdensburg Bridge and Port Authority’s interim executive director. Car traffic was down 95%, and truck traffic was down 24% from those rates last week, he said.
Lawrence estimated April revenue could be down $150,000. The authority hasn’t had layoffs, but routine maintenance will be postponed until finances improve.
“We’ve really taken a hit,” Lawrence said. “What you’re trying to do is reduce your costs and hold on the best you can.”
Spurning debt despite low interest
Despite historically low interest rates during the economic crisis, transportation officials have been cautious about borrowing for construction projects. Agencies might have trouble justifying their creditworthiness without knowing when traffic will rebound, and taxpayers worried about losing their jobs might oppose raising taxes to pay the debt.
In the San Francisco Bay Area, officials in nine counties have worked for years on a referendum to better coordinate rail, bus and ferry transit systems that are spread across 27 agencies. The goal of making transit more reliable and affordable is to relieve commuting where motorists average two hours a day in traffic.
A proposal intended for the November ballot sought to raise the sales tax 1 cent to generate $100 billion over 40 years. Similar measures have been approved in Los Angeles and Seattle.
“I think there was a lot of consensus around elected officials and residents because nobody wanted to sit in traffic,” said Gwendolyn Litvak, senior vice president of the Bay Area Council, an advocacy group that works on regional economic development.
A public referendum in November needed to clear several hurdles first, including approvals from the state Legislature and local governments. Sheltering for the coronavirus hindered the sort of meetings needed to win approval of the measure, Litvak said. Instead, the advocates decided to postpone the vote and aim for the 2022 ballot.
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“We are continuing to work on this as a coalition,” Litvak said. “We’re still focused on making a seamless and integrated transit system here in the Bay Area.”
In Bend, Oregon, the City Council scheduled a referendum for this month on a $190 million bond issue for improvements to roads, sidewalks and transit. But the council voted unanimously March 18 to postpone the effort because of economic uncertainty in a community dependent on tourism.
Councilors said residents relayed fears about layoffs when the new debt would have added an average of $170 to each household’s tax bill. Hotels and restaurants were already hurting. Councilor Barb Campbell said she temporarily closed her own retail shop and laid off workers the day before the council vote.
“This is a really difficult decision,” Mayor Sally Russell said. “We don’t know how long this COVID-19 pandemic is going to last.”
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