Public Assets Institute > Policy Areas > Vermont Budget > VTrans maps a sensible route to budgeting

VTrans maps a sensible route to budgeting

Vermont’s transportation infrastructure is falling into disrepair, and the state needs to spend a quarter of a billion dollars this year alone to keep it from getting worse. So says in a story about a draft report accepted last Friday by the Transportation Finance Committee. The final report will be released next month.

Actually, a big gap in the transportation budget isn’t news.  The Legislature and the administration have been talking about it for decades. In 2008, the Legislature’s Joint Fiscal Office (JFO) found that adequately maintaining roads and bridges required more than a $200 million annual increase in state spending. That shortfall, according to the latest report, is now $250 million.

One problem for the Transportation Fund is that revenues haven’t kept pace with expenditures. State taxes on gasoline and diesel are levied per gallon of fuel sold rather than as a percentage of total sale. As vehicles have become more efficient, Vermonters have been using less fuel—and paying less in taxes—for every mile driven. So what has been good for the environment has been bad for the state treasury. Common sense would suggest revising the structure toward taxes based on price, which could reliably produce enough funds to maintain the transportation system.  However, elected officials have been unwilling to make the needed changes.

But while the revenues need updating, the Transportation Fund, in some ways, is light years ahead of the General Fund. The Transportation Fund gap is based on an actual assessment of the state’s needs.

The $250 million the agency says it needs is the difference between projected revenue and the estimated cost to maintain Vermont’s transportation infrastructure in the coming year. And the projects the agency undertakes each year are developed, in part, with grassroots input from regional planning organizations, which have been helping to set priorities for years.

For the General Fund, by contrast, there is no needs assessment. We know how much revenue the state is projected to take in each year. But the spending estimates aren’t based on an analysis of how much it would cost the state to meet its commitments and adequately deliver the services Vermonters need and expect.

Instead, projected General Fund budget gaps typically are the difference between available revenue and what is deemed to be a politically acceptable spending increase over the previous year—usually about 3.5 percent. Following this usual method, the projected gap for fiscal 2014 is currently estimated between $50 million and $70 million. But nobody has followed the Transportation Fund model and estimated what it would cost to meet Vermonters’ needs for the coming year.

If Vermont concretely assessed those needs, we could then decide whether it’s worth raising the funds to meet them—and then figure out how.

Thanks to the Vermont Workers’ Center’s People’s Budget campaign, we’re beginning to talk about doing just that. Under language (pp-121-3) adapted from the People’s Budget and written into law last session, the governor is supposed to now develop his annual budget proposals with “direct and meaningful participation from Vermont residents.”  This should include a regular, grassroots needs assessment, connecting Vermonters’ needs with the funds to be allocated in the state budget.

VTrans does it that way already. It’s time for the whole state to follow the same route.

Posted by Paul Cillo on December 18, 2012 at 6:19 am

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