Kennedy, in speaking
to the Transportation Funding Task Force, noted that the public was wary of
any additional funding requests for roads building and maintenance unless it
was convinced these were carried out in a fashion that reflected true needs of
the state, citing other spending uses of capital funds on construction projects
that very few would call an important priority. The group is to meet four times
prior to next year’s legislative session to give recommendations on how enable
the state to eat into a roughly $10
billion backlog of roads requests.
If Kennedy meant he was open to a
tax increase to do this, he would be joining for him unusual company. Also on
the panel is a former secretary of the Department of Transportation and
Development, Kam Movassaghi, who made it a habit during his tenure than encompassed
the last six years of the former Gov. Mike
Foster Administration to call
for tax increases. Even now, one recommendation he wants the group to
forward would be to replace the existing regular gasoline tax, the main source
of funding for roads, of 16 cents per gallon with an 8 percent levy, which at present
oil prices would work out to be around a 50 percent increase, arguing that the
tax has less than half of its purchasing power when it was enacted three
decades ago.
When Kennedy flirted with running
for governor in 2003, he raised Movassaghi’s ire by claiming
the state took about 15 percent overhead in its operation, to which Movassaghi
alleged it was only 4.6 cents on the dollar. In reality, the fiscal
year 2004 budget, the last Movassaghi constructed, put the cost right
around the national average at 6.8 percent. Regardless, Movassaghi’s and Foster’s
leadership over the function garnered much criticism about efficiency, as by
the end of their terms, with Movassaghi replaced by the next Gov. Kathleen
Blanco shortly thereafter, statistics showed Louisiana’s
highway costs as 4.6 percent above the weighted average of nearby states.
But now out of office for a
decade years, Movassaghi suddenly has new ideas about the issue besides the old
one of raising taxes. He also wants the group to propose to move
to a transportation commission model as a number of states use to oversee their
similar departments, where collectively members appointed to staggered fixed terms
of some length make decisions instead of a single executive appointed by the
governor and confirmed by the Senate. He argues that single appointed executive
approach can leads to too much political interference and not enough continuity
in planning, given the ease at which a head can come and go.
As these commissions have been
around for awhile along with knowledge of the advantages and disadvantages of
each model, one wonders why Movassaghi never brought this up when he held the
job that he now wants abolished. Regardless, there’s nothing that prevents DOTD
in its current configuration from long-term planning because legally it
provides the legislature annually with a priority list of projects that the
body only may reduce, not add to. Further, a single executive has the advantage
of looking at the state and its needs as a whole, while a collective executive
would encourage logrolling among its members that would deemphasize statewide
prioritization. So there’s no real evidence that this approach would improve
the quality of spending decisions.
Rather, Kennedy’s notion that
better prioritization of overall capital spending, joined with a reallocation
idea floated by another committee member, state Sen. Robert Adley, makes more sense. The state
overfunded this year money for roads going to parishes by giving $46 million
instead of the legally-required $30 million to be delivered to the Parish
Transportation Fund, which Adley said should be changed to the minimum. Also
extra coming out of the state’s Transportation Trust this year was almost $60
million to fund continuing operations of the State Police. Adley maintains that
getting parishes to fund more of their own work (or do less of it) and funding
only capital operations would save a baseline $76 million annually that could
be put entirely to the regular repair needs of the state which got $27 million
this year when Adley believes $70 million a year is more realistic.
While additional funds will be made
available through a reallocation process of vehicle sales taxes, that kicks in
only when a budget deficit due to a decrease in forecast revenues occur, and
then only gradually. Assuming that doesn’t happen for next fiscal year, it
would be almost a decade before the full amount of around $450 million becomes
available to work on the backlog. The theory is growing revenues plug for where
the vehicle sales taxes were going; clearly the cavalry is on the way to reduce
the backlog.
But until then, maintenance need
not be neglected. The $16 million shift is easy enough from the state’s
perspective, but the $60 million may be another matter as it needs an
equivalent amount to come from somewhere. Among announced 2015 gubernatorial
candidates, Sen. David Vitter pledges
against the diversion but has no solution at this time to substitute for
it, while state Rep. John Bel
Edwards seems
more likely to raise taxes to fund for that (presumably if allowing for the
diversion of up to 20 percent to keep occurring by raising the regular retail
gasoline tax to compensate). However, other solutions already abound, such as
by getting rid of nonproductive tax exceptions like the motion
picture investor tax credit or the earned
income tax credit. Yes, next session is during an election year, but if
roads really are a priority, tax exceptions like these can be axed instead of
taking more of the people’s resources and raising the cost of business as a
whole.
Reorganizations won’t solve for
underfunding roads, nor are tax increases necessary. Prioritization not just
among roads projects but among all capital outlay requests and in judging the
utility of tax exceptions will, providing enough resources to conduct adequate
maintenance while waiting upon the diversion of retail vehicle sales taxes to
ramp up in the coming years to erode the backlog. It’s this strategy the panel
should pursue, and recommend next year to the Legislature.
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