Panel considers how to pay for transportation projects
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By Louis Porter Vermont Press Bureau - Published: December 4, 2008
MONTPELIER — The discussion Wednesday at the first and last meeting of a special committee considering how transportation infrastructure is paid for in an era of declining revenues may prove to be a preview of many such hearings in the coming months.
Some members of the committee leaned toward effectively increasing the gasoline tax, while others suggested reducing the amount of money transferred out of the Transportation Fund, which could necessitate cuts in other programs.
But they all agreed the state needs to figure out a way to spend more on bridges and culverts if it is going to even begin to catch up with the demands.
The conclusion of a report on the problem by State Treasurer Jeb Spaulding that "your current revenue stream is not going to allow you to catch up," was undisputed by the members of the committee, including lawmakers and members of the Douglas administration.
But other than agreeing that every possible solution should be examined, there was no definitive direction stipulated by the committee.
Spaulding has proposed a "Motor Fuels Distributor Infrastructure Assessment" on those distributing gasoline that would effectively raise the gasoline and diesel tax. The name is more than mere semantics, Spaulding said. But by calling it an assessment on distributors rather than a simple increase in fuel taxes, bonding agencies may consider such revenue a new source of money that can support revenue bonds separate from the state's other debt, therefore helping the state maintain its bond rating.
"It is intended to allow us to structure it as a revenue bond," Spaulding said.
However, to Gov. James Douglas and some lawmakers, the proposal is not welcome.
"We don't need to increase the tax burden at this point on the people of Vermont," the governor said recently about the proposal.
Sen. Richard Mazza, a Grand Isle Democrat, head of the Senate Transportation Committee and a member of the special committee that met Wednesday, said he prefers the idea of reducing the amount of transportation money that goes to the Education Fund and to public safety. He will, however, consider all alternatives, including Spaulding's recommendation.
"It is very difficult to ask Vermonters for a gas tax increase when we have $26 million going into the Education Fund, and about $33 million going into other services," Mazza said. "If we are going to have a dedicated fund, let's maintain its integrity."
But other lawmakers, including appropriations head Rep. Martha Heath, D-Westford, pointed out that simply eliminating the amount redirected to other funds is not realistic. That is because that will leave other programs and services short and demand cuts — or new revenue — in those areas.
Spaulding's proposal — effectively a 5 cent increase on the state's 20-cent-a-gallon gas tax that has stayed the same since 1997 — would raise about $20 million a year to help fund the transportation project backlog.
Ultimately the fate and shape of a federal stimulus package — which could include transportation money for states — needs to be understood before anything substantially different happens in Vermont about funding of road and bridge work, Mazza said.
"I want to see what the feds have to offer," he said.
Contact Louis Porter at louis.porter@rutlandherald.com.
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