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Tennessee may be on the brink of even greater pressure on funding for state highway maintenance and construction.
As it stands today, our state is 50th among all states in per capita spending on state highways - this is not related to spending on county roads or city streets.
We wondered why every state is complaining about a decline in adequate highway funding from the state and federal gasoline taxes.
There has even been talk in the legislature of the possibility of construction of new toll roads in the state. That brought back unpleasant memories of earlier days when the state had numerous toll bridges, built from money obtained from the sale of state bonds. At Niles Ferry across the Little Tennessee just south of Blount County one could pay a toll and use the new bridge, built about 1930, or pay a toll and continue usage of the much slower, privately operated ferry just below the bridge.
Of course, times have changed but we would think the state might want to think twice a couple of times before getting into building and operating or leasing toll highways.
It seemed to us that with consumers buying more gasoline than ever, and thus paying more taxes than ever, we should at least be holding our own in funding.
A number of years ago, Tennessee wisely established a state road trust fund to support its construction of highways. Adopting a pay-as-you-go policy, it discontinued the issuance of bonds against the state’s credit to pay for highway construction. The state receives 80 cents from the federal gasoline tax for every 20 cents on the dollar that it spends on state highway construction.
Unfortunately, the highway trust fund was not legally bound to use all its money on highways. So, the last two state administrations have borrowed a total of $280 million from the fund to balance the state budget. We understand that a strong effort is being made in the closing days of this legislative session to repay $50 million of that money. That will help, but the borrowed money is not the basic cause of the problem.
Tennessee has not had a state gasoline tax increase since 1989. While it ranks at the bottom in per capita spending, the 21.4 cents per gallon of state gasoline tax ranks 26th highest nationally and is below the national average of 27.4 cents per gallon. The federal tax is an additional 18.4 cents per gallon. Thus Tennesseans pay 45.8 cents per gallon tax on gasoline.
There have been numerous increases in construction costs from that of state employee increases to that of actual construction. Over the years hedges have been taken to compensate for increased costs.
Matching federal funds have been used to repair existing state roads, not just build new ones. Today, most roads are built to last eight to 10 years without resurfacing instead of 18. A thinner asphalt surface is added, and quicker fixes are added to deteriorating road base. Generally, these shorter-life roads are being built at all levels of government.
A major added new cost factor has been that of more recently required environmental impact studies for new roads and significant improvements of existing roads.
All of the cost reductions have not taken care of the funding problem. Within the past two years, road construction costs have increased about 15 percent. Asphalt comes from the same source as our higher-priced gasoline. In addition, petroleum products are widely used in other related materials such as the dynamite needed in blasting for new highways and production of crushed stone. And the equipment used in road construction and repair consumes large quantities of diesel fuel.
In other words, the petroleum products which are in such high demand for the operation of the motor vehicles which use the highways are also in great demand for the construction and repair of our roads.
So, it appears to us that while states are running short of highway funding now, the situation is likely to get worse when we begin to reap the results of roads built to last shorter periods without resurfacing and often lacking adequate attention to sub-grade deterioration.
The matter deserves some serious thought and action before we get into a disaster situation.