CMR Has An Option To Help State DoTs Federal Funding Shortfall

Numerous State Department of Transportation organizations are facing federal funding shortfalls. The clock is ticking and the shortfall of Federal funds is projected to reach $0 in less than 3 months. See more details on the Highway Trust Fund Ticker.

Here is some background to the issue. Congress adopted the Moving Ahead for Progress in the 21st Century Act (MAP-21) in the summer of 2012. The expectation was that sufficient funds would be deposited in the Highway Trust Fund to adequately supply the Nation’s transportation expenses through the end of the current fiscal year in September. However, that fund may be void of money as early as August, 2014. Secretary Foxx states that there is simply not enough revenue coming into the fund to support the ongoing work needed to maintain the Nation’s roads, bridges, highways, and transit system.

Across the nation, various State Departments of Transportation are facing that dilemma. For the past 2 months, it’s been an active trend in the headlines with the most recent ones being: WYDOT, IADOT, NCDOT, ODOT, FDOT, MNDOT, and MSDOT. Already the impact is being felt at the state and local level. Iowa DOT warned in a “Dear Iowans” letter that without funding being reauthorized, improvement projects could come to a halt.

State lawmakers have several options on the table. Granted, coming up with a solution is not an easy fix. As many states encounter this situation, the options explored are mileage tax, fuel tax, small increases in various other taxes including registration requirements for other vehicles both motorized and non-motorized. There is even talk of scaling back U.S. Postal Service deliveries on Saturdays.

On June 1st, 2014, an editorial by The Mankato Free Press stated that funding shouldn’t be one source (Highway Trust Fund). They stated that the funding issue needed innovation and reform and that no stone should be left unturned when gathering ideas for solutions. As state lawmakers consider the above options, they may also consider the option of outsourcing a non-core function of State DoTs to an expert private sector company. There is already success in the option that is more than encouraging. OKDOT has improved funding over $1 million per year and GADOT is projected to improve $5 million this year. The option both DoTs explored was outsourcing property damage claims recovery (Subrogation) process. An added benefit is not a single DoT job was eliminated.

Again, this success is just a piece in the puzzle to solving the federal funding issues that many State DoTs are challenge with. However, the process is managed by experts who generate results early on the timeline. And with a ticking clock, that may make all the difference when State DoTs face shutting down new projects or ones already in progress.

Learn more about the CMR process and read about the success stories. Start a conversation with them on the following social media channels.