An obsolete model

Settling on a new revenue model for funding Maine roads, bridges, rail, air and shipping ports has confounded previous state legislatures and, so-far, persists as an unsolvable predicament. So, we greet the recent announcement of the establishment of the Blue Ribbon Commission to Study and Recommend Funding Solutions for The State’s Transportation Systems with high hopes, tempered by sober expectations, of finally achieving a breakthrough that solves Maine’s transportation funding woes.

The 15-member commission must confront two significant and well documented challenges. First, 69 percent of the revenue flowing into the state’s highway fund is generated by the per-gallon excise tax collected on the sale of gas and diesel fuel. Improved vehicle fuel efficiency standards along with the growing popularity of hybrid and electric vehicles coupled to Maine’s anemic population growth all contribute to significantly slowing the overall purchase of fuel for vehicles in Maine. As fuel sales level off and the costs of building and repairing transportation infrastructure increase, state policy makers have, more than ever, shifted from a cash pay-as-you-go model to a debt model of borrow today and pay tomorrow. Maine has come to rely on borrowing against the pledge of future federal funding, borrowing to the maximum limit against expected future collections of fuel taxes and annual borrowing against general fund revenues that are intended to support other state programs such as education and health care. Debt was selectively reserved as the prudent financing tool for long-lived major capital infrastructure but today borrowed funds are used to pay for year-to-year maintenance. This is not a sustainable long-term funding model for supporting public transportation systems.

The second major challenge the commission must acknowledge and address is the probability of the eventual retirement of the fossil fuel internal combustion engine. Policy makers together with industry leaders are tasked to design an entirely new transportation infrastructure funding model for that inevitable reality. We are all on the policy exit ramp of a soon to be obsolete funding model. Tweaks of the current system will not suffice and should only be proposed as short-term adjustments designed to smoothly transition the Maine economy to a new sustainable transportation funding model.

Members of the commission must peer ahead, articulate a vision of the future and recommend a funding plan that fits a tomorrow that looks very different from our yesterdays.

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