(Jefferson City) – Uncertainty about future federal funding, declining fuel tax proceeds and increasing costs of doing business have spurred the Missouri Highways and Transportation Commission (MHTC) to stop adding new projects to its five-year construction budget and to suspend its popular Cost-Share Program.
The MHTC voted to do so at its January 8 meeting.
MHTC Chairman Joe Carmichael, Missouri Department of Transportation (MoDOT) Director Dave Nichols and MoDOT Chief Engineer Ed Hassinger discussed the foreboding financial future at the annual Missouri Transportation Conference in Jefferson City on Thursday.
“Believe me when I say this is not what we wanted to do,” Carmichael said. “But when considering the financial forecast for the rest of this decade, we had no choice. We aren’t even going to have enough money to maintain the system we have today.”
Dropping fuel tax revenues, inflation, rising costs of materials and the insolvency of the Federal Highway Trust Fund are blamed for the halt in projects.
MoDOT projects its annual construction program – which just a few years ago was $1.3 billion – will be just over $700 million in 2015, before dropping to $325 million per year from 2017 through 2019. Nichols said the baseline annual amount required to keep the statewide system of roads and bridges in the condition it is today is $485 million.
“When we fall below that number,” Nichols said, “it is obvious that our system is going to begin to deteriorate.”
Carmichael said the Commission opted to take this action now, rather than wait, because this is the time of year when MoDOT and its local planning partners begin to prioritize future projects in order to add an additional year to the five-year Statewide Transportation Improvement Program.
Nichols said MoDOT has taken dramatic steps to reduce costs and form a leaner, more efficient agency that saved $500 million.