Shortchanging our infrastructure

According to state and local estimates, road and transit needs over the next 20 years exceed $8 billion.

Will we be seeing less of this? Construction continues along I-25 for the Rail Runner extension to Santa Fe. But if funding doesn't keep pace with the state's needs, many future projects could come to a screeching halt. (Photo by Denise Avila)

By Joel Gay 05/13/2008

ALBUQUERQUE — State Transportation Department officials told legislators last week that New Mexico is shortchanging its road maintenance and construction needs by nearly $350 million a year.

But more than six months after a state task force identified a dozen potential funding sources to pay for pavement, highway overpasses and mass transit, there are no new revenues in the pipeline and none on the horizon — and probably won't be until the 2008 elections are over and the national economy turns around, the task force's chairwoman, Lt. Gov. Diane Denish, told the New Mexico Independent on Monday.

"An election year is probably not a year anyone is going to put a tax hike forward," she said.

Meanwhile, an Arizona group is moving ahead with a plan to ask voters there to fund transportation improvements and mass transit, bypassing the legislative process entirely. If the measure passes in November, it would pump nearly $43 billion into Arizona's roads and railroads over the next 30 years.

Rough roads ahead, it appears

New Mexico transportation officials recited a litany of needs to state lawmakers at a hearing in Santa Fe last week: Road maintenance funding is short about $80 million a year; highway interchanges and other construction projects need an additional $245 million a year; the Rail Runner Express commuter train is running in the red by about $15 million a year.

The New Mexico Transportation Infrastructure Futures Task Force, headed by Denish, traveled around New Mexico last fall and heard similar concerns from local government officials, businesses, residents and others. In its final report, issued in November, the task force painted this bleak assessment:

· The condition of New Mexico’s transportation infrastructure has been deteriorating over the past 20 years.

· Traditional funding has been well below the actual system needs.

· The total purchasing power of state transportation revenue in New Mexico is 23 percent lower now than it was in 1987.

· Construction unit costs rose 34 percent from 2003 to 2007.

· Of the $615.7 million in annual revenue from transportation sector sources, only 64 percent is allocated to NMDOT for transportation purposes.

· The state’s gasoline tax — 17 cents per gallon — is 44th lowest among the states and is unchanged since 1995.

· NMDOT projects $10.6 billion in needs for the state system for the next 20 years, while metro and regional areas in the state have estimated $8.9 billion in capital, operating and maintenance needs in the same period.

The task force cited 12 potential revenue sources that could raise an additional $750 million to $1 billion a year. While the recommendations were sent to Gov. Bill Richardson and state lawmakers, none of the potential revenue measures was enacted by legislation in the 30-day session that started in January. Bills that would have raised $19 million for transportation projects died in their respective houses.

Maybe something will happen next year, Denish said. "I think we'll have to sit down and look at all the potential transportation revenue" and see which ones might be possible, she said. "It would be worth getting started."

The best bets for raising new transportation funding come from redirecting existing revenue, the task force reported. For example, the Department of Transportation could get an extra $136 million a year if the Legislature mandated that 100 percent of the state excise tax on vehicle sales went to transportation projects. But that would require cutting $136 million elsewhere in the budget, and that's not likely in an election year, Denish said.

To reinforce that point, state lawmakers last week pointed out that the revenue from the state excise tax helps to fund education and health care in the general fund.

"How can we re-direct it without affecting education, health care? We need to look at both sides," Rep. Luciano "Lucky" Varela, D-Santa Fe, asked state transportation officials during a legislative hearing at the Capitol in Santa Fe.

Another $19 million a year could come from better enforcement of weight-distance fees charged to transportation companies, the task force found.

But if the state wants to raise big bucks for its transportation system, it will require higher taxes and fees, the task force found. For example, raising the statewide gross receipts tax by one-quarter cent — to 5.25 percent — would yield $121 million annually. Extending the existing tax to gasoline and diesel would bring in another $194 million per year. Raising vehicle registration fees would generate about $122 million annually, the task force said. And indexing all those taxes and fees to inflation would eventually be worth $100 million or more per year.

Denish said her task force talked to people all over the state and believes that eventually — after the national economy improves — residents could support higher taxes to pay for roads, bridges and mass transit. "People will support taxes if they think there's accountability and they know what they're paying for," she said.

It will take someone to champion such an effort, however, and Denish said she couldn't speculate on who might step forward. But as politically sensitive as the matter will be — either redirecting existing revenues or raising new ones — she said transportation advocates will likely hear support from New Mexicans, particularly rural residents. Many told the task force that transportation improvement is a "very high priority," she said.

"I think every community feels the effect of not having good roads," which are the key to economic development, she said. "Someone needs to push it," Denish said of the need for new revenues, because federal transportation funding is rapidly declining. "I think we all know we can't look for a gift from heaven from the federal government."

Arizona group eyes political detour

Even as New Mexico struggles with its deteriorating road and rail system, its neighbor could see a tremendous boost in transportation spending under a plan proposed by the TIME Coalition (Transportation and Infrastructure Moving AZ's Economy). The proposal calls for a one-cent hike in the state sales tax for 30 years to support $42.6 billion in statewide projects — that's about one-fourth of the long-term needs outlined by the Arizona Department of Transportation, the Arizona Republic reported recently.

Almost 60 percent of the funding would go toward roads, but the plan also calls for substantial improvements in Arizona's railroad system, including rail service from Tucson to Phoenix and light rail systems in smaller communities.

The TIME Coalition elected to bypass the normal route for transportation funding after running into opposition in the Arizona Legislature, and now wants to put the question directly before voters. They must gather about 153,000 signatures by early July to get it on the Nov. 4 general election ballot. If approved, it would boost Arizona's sales tax to 6.6 percent, making it the sixth-highest state sales tax in the United States.

The proposal does not appear to have generated any formal opposition yet, but the Arizona Star found a number of skeptics. Some panned the tax proposal as regressive, saying it would hurt the poor. Others said a better route would be raising the state's gasoline tax, thereby tapping hardest those who use the roads most.

Arizona Gov. Janet Napolitano, a Democrat, has come out in favor of the plan and told the Star that she's not swayed by arguments against the sales tax hike. "I'm a taxpayer," she said. "I'm willing to pay this in order to get that infrastructure in place."

Reality won't go away

With little progress made thus far on resolving New Mexico's looming transportation problems, Denish and others say it will be a problem for future administrations — perhaps even hers. Denish has made no secret that she has eyes for the governor's mansion in 2010, and could inherit it earlier if Richardson is whisked off to Washington, D.C., to serve in a Democratic presidential administration.

But whoever inherits it will confront some challenges. And it won't be citizen activists taking the funding issue before voters — New Mexico law doesn't allow for governance by referendum, as is the case in Arizona, California and many other states.

"Some governor, whatever party, is going to get caught with this problem," Sen. John Arthur Smith, D-Deming, said last week.

Asked if transportation would be a key priority if she were governor, Denish said: "I think it's going to be a challenge we're going to face in the next administration." She also said she would be willing to bring stakeholders to the table to work out solutions to the budget constraints facing New Mexico.

"I think there are a lot of fiscal challenges over the next five years, and we'll have to figure out the priorities," she said. "Certainly transportation, education and health care eat up most of the budget and those will have to be our priorities."