Transportation Budget Shortfall a Sign of Vermont’s Spending Problem

The latest sign that Vermont’s spending addiction may be leading us down a path of fiscal problems came in the form of a state transportation budget annual funding shortfall of $250 million.  This story was covered in a recent Vermont Digger article:

Maintaining and operating Vermont’s transportation infrastructure will cost the state $250 million more per year than it can afford, according to a draft report headed for legislators’ desks in January.

The yearly cost of maintaining the state’s transportation system, with its roads, highways and more than 4,000 bridges, is estimated at $705 million; but transportation revenues will peak at $486 million at most, leaving an annual shortfall of more than $250 million per year.

To get an idea of the magnitude of the problem, the shortfall amounts to roughly half of the Transportation Department’s budget: “This analysis of required funding to preserve the state’s existing transportation system doesn’t include expansion of rail or transit services, nor major roadway expansions. The typical amount budgeted for Vermont transportation is $450 million to $500 million, so the shortfall represents about half of the annual budget of the state’s Agency of Transportation.”  As the article points out, this is not a problem that was unforeseen:

“Unless we move to fix that revenue stream, we’re going to be looking at conditions in the transportation system that will deteriorate beyond where they are now,” said Brian Searles, secretary of the Agency of Transportation. “So we have some decisions to make.”

The gap has been there for some time, but this is the latest attempt to identify it, and understand it. … We need some serious federal involvement, as do other states, to make sure that this gap is filled.”

About 60 percent of the state’s transportation funding came from federal sources in state fiscal year 2013, with state funding accounting for 34 percent. Searles said that part of the pressure on state revenues is a growing trend towards gasoline and diesel efficiency, which lowers gas tax revenues, traditionally the most significant contributor to state transportation revenues.

There is a problem wit the revenue steam, but the attempt to “understand it” does not seem to be going so well.  There is also a largely unacknowledged problem with an unsustainable spending course that the state as a whole has been on.  The unbalance between a shrinking revenue stream, and a growing commitment to spending was explored by an Ethan Allen Institute  report entitled “Off the Rails”, which came out in 2006 and was updated in 2008.  Part of the problem with our “revenue stream” is that the ratio of those who are net tax payers to those dependent on tax dollars is decreasing.  Part of the problem is an aging population, but another part of the problem is a political economy that is stacked against producers.   We are quickly getting to the point where it will take all of our revenue stream just to fund our spending commitments to education and welfare programs.  This crowding out of other concerns by such programs is just beginning.  Wait until the bill comes due for the new single payer health care reform scheme.  In the meantime, the over reliance on money from our federal Santa Claus puts us on shaky grounds.  Yet, the answer proposed in the article by some political leaders is to double down on our reliance on the federal government: “During a meeting of the committee drafting the study, Rep. Diane Lampher, D-Vergennes, suggested that the Shumlin administration join together with other small states in a coalition, to lobby for a continued minimum of federal transportation now allocated to such states, which could be eliminated in 2014.”  One would have thought that these “leaders” would have learned their lesson when they failed to get the promised FEMA money.  The federal Santa Claus is practically bankrupt.  We have got to bring our spending priorities in line with our revenue stream or we will be joining the feds.

2 thoughts on “Transportation Budget Shortfall a Sign of Vermont’s Spending Problem

  1. I got the following reminder from David A. Mace, the External Affairs Writer/Media Relations Specialist for FEMA in Vermont, that the so-called “promise” from FEMA was a figment of Governor Shumlin’s imagination:

    Dear Mr. Maynard:

    Just a brief note regarding your recent posting entitled “Transportation budget shortfall a sign of Vermont’s spending problem.” The characterization of FEMA as “promising” a specific level of funding to the state for the replacement of the Vermont State Hospital and Waterbury State Office Complex is somewhat misleading (“One would have thought that these ‘leaders’ would have learned their lesson when they failed to get the promised FEMA money.”).

    In point of fact, there were no “promises” made to the state, as the Times Argus pointed out in their editorial of August 2, 2012 entitled “Wishful Thinking”: http://www.timesargus.com/article/20120802/OPINION01/708029933/1021

  2. this financial embarassment is good news to fiscal conservatives. To properly expose the left’s spendthrift policies Vermont has to plunge off the cliff. When autos fall into giant potholes, the electorate will act. They will vote da bums out.

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