This interim, North Dakota lawmakers serving on the
Government Finance Committee are discussing how to fund state and local roads
in the future. Part of that discussion, includes exploring possible increases
to the state’s gas tax and registration fees as well as alternative revenue
ideas. The committee meet December 7th to discuss transportation
funding and the future.
“The current funding
formula is inadequate,” said NDACo Assistant Director Terry Traynor. “The
federal funds have essentially been flat over that same time period, clearly,
our foundational revenues have not been keeping up with the costs. It is time
to explore other funding options to support our transportation system in the
near future and long-term.”
County road funding has consisted of property tax, highway
distribution funds, and federal highway formula funds and in the most recent
years, a great deal of one-time state funding. That one-time funding has been the
salvation for county roads with the injection of close to $1 Billion in both
oil producing and non-oil producing counties. For about four years, counties
have made great strides in addressing the backlog of road and bridge improvement
projects.
Traynor highlighted how the one-time investments have made a
profound difference across our state. 413 major projects in every county were
completed with the one-time funding. The most recent Upper Great Plains
Transportation Institute (UGPTI) study shows dramatic improvement in road
conditions because of this. The miles of “poor” pavement have been cut in half
and the miles of “good” have increased by at least a third.
“But more than the chart, you can see it in the results, and
hear it from our local officials,” said Traynor.
Traynor showed committee members examples of what the funding
as done from a $1.32 million bridge in Barnes County to a $2.2 million gravel
truck route in Ramsey County to a $3.7 million bridge replacement in Stark
County.
“The UGPTI study says we should be spending $450-$500 million
a biennium on local roads if we want to maintain the improvements made and
provide the transportation system necessary for our ag, energy and other
industries,” said Traynor. “We are actually spending about 60% of that need,
and much of that is on things like snow and ice removal that contribute little
to the long-term maintenance of roadways. So obviously we have a challenge.”
North Dakota Department of Transportation officials pointed out
that because there was no appropriation for a state funded construction program
during the 2017 Legislative Session; North Dakota is solely dependent on
federal funds (and the minimal state match) for any road improvements this
biennium. Federal funds can only be used on federal roads; which make up 17.65%
of all the roads in the state. This makes the state very reliant on federal
funds for any construction work.
Traynor pointed out that the Highway Distribution Fund is
supplied by motor vehicle taxes and fees. Two-thirds of the revenue is fuel
taxes, and one-third vehicle registrations. And unlike in some states, the
motor vehicle excise tax does not go into funding roads but into the State’s
General Fund.
It has been a number of years since any increases have been
made. In 2005, lawmakers approved a 2-cent fuel tax and an across-the-board
registration fee increase of $10. In 2009, a $3 registration increase was
approved. A 1-cent increase in the gas tax would generate $7.4 million for
state, county, city and township roads.
Comparing registration fees with other states in our region,
North Dakota is significantly less. Wyoming for example is three times higher,
Montana twice as much and South Dakota is similar but has a local option as
well, which makes their fees higher than North Dakota. North Dakota is surrounded by states with
higher fuel taxes with the exception of Montana which is similar.
Transportation officials at all levels across the country are
exploring additional ways beyond the traditional methods to provide funding for
transportation programs as revenue generated by fuel taxes have dropped due to
greater vehicle fuel efficiency.
