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Douglas: The Transportation Fund

A recent survey reported that the condition of Vermont’s roads and bridges improved dramatically in 2009 and published comments have graciously acknowledged the contribution my administration made to that progress.

I could see how the deterioration of our transportation infrastructure would adversely affect public safety and our economy, so I made upgrading it a priority.

Early in my tenure, I proposed a 55% increase in our paving budget, which had declined significantly. In the next few years we streamlined the process for new projects to ‘Just in Time Delivery,’ because too many had been delayed or even canceled after major investment in planning and design. If the funds for construction weren’t identified, we didn’t begin to plan. I also insisted that the state would finance only the basics: for example, if a community wanted a marble facade on a bridge or century-old lampposts, the town could pay. We launched ‘Operation Smooth Ride,’ to redirect dollars to needed repair. All this was accomplished in spite of huge cost increases in steel & paving material, the latter a consequence of spiking oil prices.

Some coverage of our improved ranking cites the increased revenue from higher gas taxes approved in 2009, but that hadn’t taken effect by the time the survey was conducted, nor had we received the infusion of funds from the Federal Recovery Act yet. This ranking reflects our earlier efforts to re-prioritize precious resources. Perhaps subsequent surveys will report still greater progress.

But frankly we could be doing even better. For some time, the state has diverted revenues from the Transportation Fund to other purposes. The theory is that certain expenditures can justify using Transportation Funds for what might logically be deemed General Fund purposes. For instance, soon after being elected state treasurer in 1994, I looked at the office’s budget. I was surprised to see that it was funded in part by the Transportation Fund. ‘Why?’ I asked. ‘Because,’ I was told, ‘the treasurer’s office writes checks for the Transportation Agency.’ Well, we don’t budget that way anymore, but the legislature used more than $25 million this year from the Transportation Fund for the State Police. And while I’ll concede that they patrol the roads, they do a lot of other things too. We had begun to reduce this transfer over the past decade, but lately the progress seems to have stopped.

Now consider this: when you buy a new car, you probably assume that the purchase and use tax goes into maintaining the roads on which you drive. In fact, one-third of the 6% tax is deposited into the Education Fund – for no good reason I can see, except perhaps to mask the true cost of running our schools. This year, that diversion will likely exceed $30 million. More fuel-efficient cars generate less gas tax receipts. That’s laudable, but it means we must confront the sustainability of transportation funding.

Imagine how much better our roads and bridges might be  if we’d kept that 55 million dollars in the Transportation Fund where it belongs. We might not have needed those higher taxes.

Jim Douglas, a former governor of Vermont, is an executive in residence at Middlebury College.
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