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Stimulus funds are not enough for Oklahoma repairs for more than one year


Greg Horton June 18th, 2009

Oklahoma received $2.6 billion in stimulus funding, of which $542.9 million went to transportation needs in the state. According to David Streb, director of engineering for the Oklahoma Depa...

Oklahoma received $2.6 billion in stimulus funding, of which $542.9 million went to transportation needs in the state.

According to David Streb, director of engineering for the Oklahoma Department of Transportation, that allocation is enough to fund one year of ODOT projects.

INFRASTRUCTURE NEEDS
NONTRADITIONAL FUNDING
USER FEES

"We were a little disappointed in how much money we received," Streb said. "We spent three months getting $1.3 billion in project planning ready, and received less than half of that."

The stimulus money will allow ODOT to do some much needed repairs on Oklahoma's road and bridges, but the money isn't sufficient to cover all the costs of Oklahoma's transportation infrastructure needs.

Streb was speaking at a meeting of the Urban Land Institute, a nonprofit organization concerned with responsible land use and community development. The organization met June 3 to discuss an infrastructure report commissioned by ULI and produced by Ernst & Young. The report, "2009: A Pivot Point," paints a bleak picture of the state of infrastructure in the United States.

INFRASTRUCTURE NEEDS
The report detailed $2.2 trillion in infrastructure needs in the U.S., nearly all of which are simply repairs. The amount doesn't include infrastructure development to meet projected population growth figures and increasing urban congestion, including traffic and property development.

Michael Jorgenson, senior manager for Ernst & Young's Dallas office, told ULI members the stimulus package attempted to address some of the pressing infrastructure repair needs, but the money was far less than what is needed.

"The stimulus allocated $132 billion for infrastructure," Jorgenson said. "It was roughly divided into three categories: $48 billion for transportation, $69.8 billion for energy and $14.6 billion for water."

Oklahoma is facing similar infrastructure funding shortfalls, despite the stimulus package, and although ODOT will be resurfacing roads and repairing bridges all over the state, much that needs to be done will not happen without additional funding.

"The projects represent one year's worth of ODOT's 8-year plan," Terri Angier, ODOT spokeswoman, explained. "We get to eliminate a year's worth of projects, but the stimulus money had deadlines attached so as to get the money into the economy as quickly as possible. That means the projects had to be 'shovel ready.' There was no time to plan new projects, so we simply went straight to our 8-year plan and started work on the first year's priorities."

Streb said those priorities included resurfacing roadways on all Oklahoma's major interstates, meaning that Interstates 35, 44 and 40 will all be undergoing major repairs this summer, causing delays into and out of Oklahoma City.

Delays are becoming a bigger problem nationwide. "Pivot Point" reports that congestion consumes 4.2 billion hours and 2.9 billion gallons of fuel annually. Oklahoma City is relatively free of the congestion that clogs major arteries in other cities, but morning and evening drive times can still feature gridlock, especially along the major highways that cross through the metro.

NONTRADITIONAL FUNDING
ULI wants Oklahoma City to begin long-term infrastructure planning to address current problems and avoid future ones, including transportation issues. Streb, as well as Jorgenson, predicted that Oklahoma will have to begin to seriously consider nontraditional funding strategies for infrastructure development.

"The revenue from the traditional funding source " fuel taxes " is down," Streb said. "Oklahomans voted down a fuel tax increase at the state level last year; it probably didn't help that gas was $3.50 a gallon when people went to the polls. But we're going to have to find some way to fund infrastructure."

"Pivot Point" outlines three ways of making people more accountable for their usage of infrastructure services: toll roads, public/private partnerships and "innovative user fees." The report details new "smart technology" that may allow cities and states to track road usage by drivers using GPS systems already in place in some cars. Basically, a driver would be charged a mileage-based fee for using roads and highways. Big Brother aspects aside, everyone knows this is not going to be a popular strategy based on years of "free" driving.

"This is difficult; let's face it," Bill Hudnut, a former four-term mayor of Indianapolis and consultant for ULI, said of infrastructure costs. "Freeways are not free. We have to make costs more transparent to people, and we'll need to adopt 'innovative user fees' to fund development, repair and usage."

USER FEES
Cynthia Rogers, associate professor of economics at the University of Oklahoma, addressed the issue of user fees.

"There has been an increasing trend across the country to raise more money by way of user fees versus general taxes," she said. "User fees are favorable because they target payments to those who directly benefit, for example, municipal water fees. Voters know exactly where the money goes. When the economy is sour, there is an even stronger incentive to avoid tax increases and to instead seek out new revenue sources, like fees, or expand existing taxes."

Streb said there will almost surely be an increase on the national fuel tax as well as expansion of toll roads. "We have many four-lane roads in Oklahoma that we wouldn't have if it weren't for toll road revenues," he said.

Rogers said the urban structure of our country has been "highly influenced by the subsidization of roads and fuel. Had people and businesses been forced to pay the true costs of driving, there would be much less sprawl, less pollution, more public transportation and more dense residential and commercial development."

ULI aims to help Oklahoma think through the process of paying for infrastructure as well as implement some of what Rogers talked about, especially more public transportation and denser residential and commercial development.

Hudnut said the strategy for Oklahoma is the same as for the rest of the country:

"Invest in high-speed rail and other public transportation, reconfigure existing suburbs with compact development and adaptive reuse of worn-out property " strip malls and shopping malls " and change the funding equation."  "Greg Horton

 
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