State road plan: detours and dead ends

By Gary Adkins

TRANSPORTATION funding is at a turning point, according to Department of Transportation (DOT) Secretary John D. Kramer. Highway revenue sources are dwindling in productivity, in terms of both actual dollars and buying power. In July the legislature passed a bare boned $364 million road program, more than $300 million less than in fiscal 1979. According to Kramer and Gov. James R. Thompson the funding is not adequate to keep up with the needs of a rapidly deteriorating state transportation system -- especially state roads and public transit needs.

Significantly, the budget provides only $258.9 million for road maintenance, and for operation of DOT administrative services. But more importantly, Kramer and Thompson are worried that the state will lose tens of millions in federal highway dollars unless the state can find matching funds since the federal government advances road construction funds to states on a "use them or lose them" basis. By October the state will need to come up with $14 million to match $70 million in federal mass transit funds, according to Kramer. (In fiscal 1980 a $500 million federal contribution could be obtained if matching funds are found.) At present the budget would match only about $200 million in federal aid.

The key to adequate highway maintenance, obtaining available federal funds and preventing mass transit fee increases rests upon the fate of a tax increase in the General Assembly. But as of August, no expanded highway program had proven acceptable to the legislature.

Secretary Kramer believes that the General Assembly would have passed the new tax and funding program offered by Gov. Thompson and Chicago Mayor Jane M. Byrne June 22, if not for the successful filibuster by suburban legislators. "According to our estimates, we had 92 votes in the House and 31 in the Senate. . . . The suburban lawmakers would not have filibustered if it wasn't clear to them that the votes were there."

Political curves
Kramer says the heart of the road and mass transit dilemma now is overly sectional politics. "No one quarreled with the revenue need. No one argued when we said we would need $300 million a year more for highways and $100 million a year more for mass transit." However, lawmakers did noy all understand or support the necessary trade-off of new revenues for continued good transportation, according to Kramer, who believes the public reaction to the Thompson-Byrne plan was good. While the legislature was focused on the political implications of a needed tax increase, instead of on the political implications of a looming transportation decline, according to Kramer, "Virtually every daily newspaper in the state supported both the governor's original [gas tax increase] proposal and the Byrne-Thompson compromise. I think that's unprecedented for Illinois, which has 75 dailies which range the spectrum pretty completely."

Kramer has difficulty talking about how the process fell apart in the final days of the last session. He talks in general terms of the "climate" of weariness and confusion which focused attention on the unpopular Regional Transportation Authority (RTA). Kramer is optimistic. He believes that the atmosphere for passing an expanded transportation program in the fall veto session or in a special session "will be much better. It's improving every day, although the issue is dependent on other issues. The legislature never operates in

a vacuum. The corporate personal property tax replacement, for instance, could have an impact."

Illinois' transportation network, once among the world's best, is in rather rotten shape right now. State highways alone have 3,000 miles of rough or narrow pavement and 200 inadequate bridges. Repair costs -- reliant upon oil -- are skyrocketing at more than twice the rate of inflation -- up 25 percent in the last nine months.

In explaining how we got in the impending crisis with our highways, Kramer likes to point to a 1925 Illinois road map, a campaign momento of then Gov. Len Small. It shows a rather complete new road system, unique in its time, and a bargain that has paid off well for the state ever since. But because our state highways were built before most other states, they have begun to deteriorate somewhat earlier than most. More than 11,800 of the state's 17,000 miles of state highways are over 40 years old, more than 2,000 bridges are over 40. These roads and bridges carry 64 percent of the traffic in the state, and for the last two decades they have been neglected in favor of completing the federal interstate system. In many places even normal resurfacing and bridge replacement has been long postponed. A large backlog has been supplemented by three successive very harsh winters and by truck weights above those the roads were built for.

Four-way plan
Secretary Kramer maintains that a serious road crisis could cost the state billions of dollars in lost commercial revenues, but that such a dire situation can be averted if quick action is taken. He lists four prerequisites that both he and Gov. Thompson believe are essential to any eventual expanded road plan. He has been drafting a plan since late July to fulfill these four conditions:

1. It must be a comprehensive plan. It must meet state needs in highways, bridges and mass transit -- both down-state and upstate.
2. The plan must be long-term, adequate for a four-year period, what with the long lead time necessary for road projects and the pressing backlog of repair needs.
3. It must "not rob Peter to pay Paul." It must, in other words, distribute the burden fairly. Those who benefit most should carry a proportional share of the weight of new taxes or fees.
4. It must be capable of winning support in the legislature. It must be politically viable.

Kramer notes that "aside from the most recent legislative leadership proposal, all the programs and solutions offered have proposed four sources of revenue for the new transportation plan.

The first source would be the Road Fund itself by phasing out the practice of diversions to pay for other things. Plans have differed as to how much to phase out in the first year. The Transportation Study Commission, for example, called for phasing out $50 million the first year, whereas the governor asked for a smaller sum, $25 million, the first year, but his eventual four-year goal was a total of $126 million. There is no universal agreement about what constitutes diversion, but most agree that user taxes, such as gas tax money, should go into the road fund instead of elsewhere, and should pay only for road-related activities.

A February 1979 auditorgeneral's report identified several programs which are financed from the Road Fund but are not singled out in statutes as purposes for which road fund resources may be used. Diversions to transportation department programs were: the functions of the division of aeronautics, $2.3 million from the road fund in fiscal 1977; the division of public transportation, $24.8 million from the road fund in fiscal 1977; administration and planning of intercity rail program, $3.3 million from the Road Fund in fiscal 1977. Programs in the Department of Law Enforcement where road funds have been spent for non-road or motor vehicle related activities without legislative authority include the Law Enforcement Merit Board, support services and investigations, according to the auditor general. The same report also questioned some court expenditures from the Road Fund, and all activities and services conducted by the Department of Personnel, which received $7.8 million from the Road Fund in fiscal 1977.

Another commonly proposed source for new road funds, after ending diversions, has been to shift revenues of the Motor Fuel Tax, or gas tax, from the General Fund to the Road Fund. During the last three years, receipts from the gas tax have increased at an average of 3 percent a year, but the higher cost of collecting and administering the tax, combined with the growth of other fixed distributions, has resulted in a decrease in actual net revenues deposited in the Road Fund. But the Road Fund has never received anywhere near what it should have from the Motor Fuel Tax. Only 38 percent of the total receipts from the gas tax go to the Road Fund. It is estimated that a realignment of each 1 percent of existing state sales tax on motor fuel would yield the Road Fund $35 million in 1980 dollars. But this would inevitably raise the question of where the General Fund could get replacement revenue for the gas tax money it now receives, which goes to help finance the RTA.

A third funding option, included in all major transportation refinancing plans before the legislature last spring, is an increase in traditional revenue sources. The state gas tax and vehicle license fees have not been raised since 1969, and both now bring in far less real dollars than originally intended. When imposed a decade ago, the 7 1/2 cents per gallon gas tax constituted 34 percent of the price of gas, but now, as we all know, it is more like 7'/2 percent of the price per gallon. In addition, with more fuel-efficient cars being produced and operated, gas consumption is not expected to climb in the future. During the next five years, Illinois is expected to lose a total of $ 1.2 billion in revenues from what would have been available had earlier growth trends continued, $230 million has been lost already in the last six years.

The fourth possible revenue source is increased bond sales to assure matching federal outlays.

Other states are also trapped in the same funding squeeze as Illinois. As a result, many have recently begun to increase motor fuel taxes and license fees. Iowa, Washington and Michigan have all gone to 9 cents per gallon or more for gas taxes. Washington state perhaps took the most practical step, shifting its gas tax from a flat 9 cent per gallon to an 18 percent variable tax rate, which at current pump prices means about 17 cents per gallon. Those states which have not been able to pass increased revenue legislation, such as Pennsylvania, have had to cut back nearly all road work and major repair. Pennsylvania has concentrated available state resources almost completely on snow removal, pothole patching and other routine maintenance for the past two years. As a result "there are interstates in Pennsylvania where the maximum speed limit is 30 miles per hour," according to Secretary Kramer.

Kramer sees highway upkeep as a nationwide problem, which in our state threatens to become a crisis. "The crisis has already been reached in Pennsylvania. The reason it hasn't happened here yet is that we did a lot of things to prevent it. We shifted the emphasis in our highway program from new construction to repair of existing roads with available dollars . . . most dramatically in the last two years. The other thing is, we went to work in Washington, and with the help of our congressional delegation we've vastly increased our federal funds .... Illinois traditionally has gotten back about 90 cents on every dollar our citizens have contributed in federal highway dollars. We've increased that to between $1.25 and $1.30," Kramer says.

(The recently enacted Federal Surface Transportation Assistance Act of 1978 will guarantee Illinois an annual $55 million increase in regular federal apportionment, with the bulk of the increase to go for bridge replacement and rehabilitation.)

Confronted with a finding by the Illinois State Chamber of Commerce (from a 1978 study of highways in 28 states), which found that Illinois has the largest shortfall in percentage of personal income spent on highways, Secretary Kramer again pointed to the 1925 map. "The fact that we had such a good system in place made the shortfall less obvious than in other states. The public at large didn't perceive the seriousness of the problem until we went through these last several winters. And I think there is a natural, understandable reluctance to increase taxes of any kind until absolutely every other option has been fully pursued."

Kramer was appointed Illinois secretary of transportation by Gov. Thompson on July 6, 1977, the first head of the state transportation agency to be appointed from within the ranks of the agency. Kramer had served four years as director of the office of policy and planning in the Illinois Department of Transportation and had been with the agency since 1973, thus he is somewhat proprietary in his feelings toward the record of DOT. When asked point-blank whether it is true that the road fund would not now be nearly broke if the legislature had not been allowed to siphon off money for other uses, if the gas tax was not long since inadequate and if at least a fair share of the sales tax on gasoline went into the road fund, he shakes his head and asserts that these conditions are not the fault of DOT.

Critical crossroads
"As for diversion, I think it's wrong to conclude that that's the central issue. Even if absolutely every so-called diversion were ended, we still would not have adequate resources in the existing revenue structure to finance adequate road programs, much less undertake the whole transportation challenge in a time of energy crisis."

Kramer was asked why both he and the governor are insisting upon including RTA funding in a comprehensive road package. "We're trying to persuade suburban lawmakers that here the issue is not whether the RTA is an institution that they're fully satisfied with, but rather whether they agree with us that public transportation is a necessity, with energy becoming scarcer and more expensive. If they do agree with us, they'll also agree with the proposition that we'll have to fund it."

While admitting that leaving out RTA funding would have been politically more attractive to some suburban and downstate legislators, Kramer said, "substantively, it raises problems. Just now the state needs public transit more, not less. And the political point is that leaving out transit aid would satisfy some, but make Chicago Democrats less eager to support the program. In addition, this is a large, interdependent state. It can be argued that what you do in one area effects every other; if Chicago mass transit breaks down I believe that economically people in Galesburg are going to feel the impact."

When asked why the administration has suddenly shifted to advocating a four-year highway plan, instead of the traditional yearly programs, Kramer says, "We didn't have any choice. Highway projects have a three- to four-year lead time, and when you talk about getting federal funds you need advanced planning. Most private agenciesand businesses seem to rely upon three- to five-year plans .... There are the usual partisan concerns -- is the governor going to realize political benefits from this? But I don't think that's a serious problem. Downstaters especially see that it benefits everyone's district and constituents to have an orderly road program."

Kramer is not optimistic about the future of an expanded transportation plan if it fails in the legislature this fall. "It would be tough next year because it is an election year, and the session is technically limited to appropriations matters. A year later it'll be a legislature dominated by concern for redistricting."

And the cost of added delay? Kramer repeats that the cost of road repair has gone up 25 percent in the last nine months. He says that if the roads continue to deteriorate, "We may have , to start from scratch like Pennsylvania. We're talking about preserving a $50 billion investment, which would cost considerably more to replace today."