Battles lines are being drawn in two states over infrastructure funding. In Utah, the state House and the Senate defied the governor’s veto and pushed through a billthat would earmark 30% of the growth in sales tax revenues for road construction. In Nebraska, the governor is considering a veto as well. Meanwhile, the new rail plans in some states are coming under scrutiny.
The Utah governor had argued that the bill would elevate roads above all other state funding. Although the legislature mustered the votes to override the veto, many legislators said they felt strong-armed into doing so, according to the Utah News report. The governor was opposed to earmarking funds and tying the government’s hands when there are so many additional needs in the state and so little money.
A similar showdown is underway in Nebraska, according to Stateline’s Transportation beat. “In Nebraska, Governor Dave Heineman has until today to decide whether to veto a similar law there, writes the Omaha World-Herald. Heineman has called the move a ‘risky financial strategy’ given the lingering uncertainty about the recovery of state tax revenue, but the bill’s sponsor says she thinks she has enough support to override a veto.” The bill would earmark a portion of state sales tax revenue for roads. The earmark would start in 2013 and continue for the next 20 years, adding about $70 million a year to the funds available for highway construction.
The governor may not have to worry about state tax revenue if Nebraska follows the path of California, which today reported a surprise $6.6 billion windfall in state revenue. Both Michigan and New Jersey are projecting significant increases in tax collections over the coming months as well, although serious fiscal problems remain.
In rail news, additional states are beginning to raise questions about the new railway plans. The federal government recently redistributed $2 billion in funds that Florida gave up when Governor Rick Scott rejected plans for a new route between Orlando and Tampa. Some have criticized the Orlando to Tampa route for the fact that once there, most rail passengers would be stranded, since public transport is minimal, and the time it takes to travel between these two cities by rail is not that much shorter than by car. In California, according to Stateline, an auditor’s report raises questions about relying on unrealistic funding assumptions and for starting construction far from the line’s most populous stops. “Beginning work between Fresno and Bakersfield,” Stateline reports, “was intended to start construction in time to fall under federal stimulus guidelines, but the report calls that choice a ‘risky decision’ and a ‘big gamble.’
Are these debates short-sighted or realistic? What do you think?
For more reading on transportation, check out these BRR publications:
Restricting New Infrastructure: Bad for Business in California? by By Karen Chapple and Carrie Makarewicz