Friday, June 07, 2002

Ohio faces crunch in highway funds

By James Pilcher,
The Cincinnati Enquirer

        Ohio could be without new highway construction money by 2005 if the federal funding program doesn't change soon, the state's top transportation official said Thursday.

        Gordon Proctor, director of the Ohio Department of Transportation, also said that without new construction money, projects such as the proposed light rail line along Interstate 71 or the widening of U.S. 22/ Ohio 3 (Montgomery Road) in northern Hamilton and southern Warren counties would not get off the drawing board.

        “We've already gotten to the point where we are not recommending any new projects at all four years out,” said Mr. Proctor. “The crunch is here.”

        Congress is to take up the transportation authorization bill early next year. The current law expires in fall 2003.

        The implications are huge not only for Greater Cincinnati, but for the entire state, which has the nation's 10th-largest highway system overall, and the nation's fourth-largest interstate system.

        Mr. Proctor said only 11 percent of Ohio's interstate system has been replaced since its original construction 40 to 50 years ago, and that the region and state are facing a capacity crisis, thanks to an explosion in truck traffic.

        Interstate 75 between the Ohio River and Interstate 275 is 50 percent over capacity, ODOT officials say.

        Ohio receives about $1 billion annually for highways, mainly from federal gasoline excise taxes. The state's new-construction budget is about $400 million this year.

        Mr. Proctor said ODOT is being squeezed by several things:

        • Higher costs associated with maintaining an aging system.

        • Increased labor costs, despite the fact that the department cut 2,000 jobs over the last six years.

        • A continued disparity in the amount the state gets back from the federal gas tax, which Mr. Proctor wants to fix. The federal funding formula gives the state back only 88 percent of what it puts in, because it is a “donor” state, he said, and helps defray the cost of interstate maintenance in smaller states.

        That's $144 million a year that Ohio would otherwise receive.

        Mr. Proctor also said Ohio is losing out on about $160 million annually in potential allocations because of its high use of the corn-based fuel additive ethanol, which receives many federal tax breaks.

        “Gasahol” receives a federal tax break of 5.4 cents off the normal 18 cents of federal taxes per gallon, and 2.5 cents of the tax collected on ethanol is put into the general fund, and not into the highway trust fund.

        He said the state would be seeking to get back 95 percent of its federal fuel tax contributions, and to somehow ease the burden of tax breaks for ethanol. He added that state officials realize that Ohio is a major corn producer and is not looking to do away with what many farmers feel is a necessary subsidy.

        Gov. Bob Taft has met with the state's congressional delegation to stress the issue. Rep. Rob Portman, R-Terrace Park, has introduced a House bill that would put the ethanol taxes now diverted to the federal general fund back into the highway trust fund. A similar bill passed the Senate in April.

        “People ask us why the roads can't last longer. Well, it's surprising that they've lasted as long as they have,” Mr. Proctor said.

        Local planners said that while the potential loss of funding is disconcerting, it won't stop their long-term outlook on projects such as the light rail proposal — which is counting on 20 percent state funding for an $800 million total bill.

        “The money is there in good times, and not there in bad times — and we're in an economic downturn right now,” said Judi Craig, director of corridor studies for the Ohio-Kentucky-Indiana Council of Governments, which oversees transportation planning for the Tristate, including the light rail study. “We're not going to discontinue our planning; we need to have the plans in place so when the money becomes available, we're ready to go.”


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