Highlighting a lack of revenue and too much borrowing, the state transportation director gave Ohio lawmakers a blunt assessment Wednesday of Ohio’s road construction finances.
Without more money, Ohio is "looking over the edge of a fiscal cliff," Jack Marchbanks, who heads the Ohio Department of Transportation, told the House Finance Committee.
Asked by Rep. Mark Romanchuk, R-Mansfield, how much he needs and where it should come from, Marchbanks said the department will fall an average $1 billion a year short of revenue over the next decade.
A penny-per-gallon gasoline tax increase would raise about $67 million per year, of which the state would get $42 million, with the rest going to local governments. So raising $1 billion for the state would require a gas tax hike of about 24 cents a gallon.
"I’d be curious to hear from this administration where they think the revenue is going to come from," Romanchuk said
Marchbanks declined to recommend a revenue source.
"We are facing a future where we will clearly not be able to maintain the quality of the system we have, let alone improve upon it," he said.
"Past practices of borrowing and bonding have brought us to this troubled state, and we are here because we need a better solution. Without one, our system of state and local roadways will fall into a dangerous state of disrepair."
Lawmakers are waiting to see if that better solution from Gov. Mike DeWine includes a significant increase in the state gas tax as part of the new two-year transportation budget. House Republicans kicked off hearings on the not-yet-introduced spending bill, which must be passed and signed by the end of March.
DeWine has not indicated when he will introduce his plan. A committee he formed to make recommendations on additional road and bridge revenue is expected to recommend a higher gas tax on Friday.
Ohio’s 28-cents-per-gallon gas tax was last increased in 2005, but Marchbanks said a dollar from 2003 is now worth just 58 cents because of inflation. Ohio has gotten by in recent years from other money infusions, such as the federal stimulus package or, more recently, $1.5 billion raised through bonding against future turnpike tolls.
That turnpike money is now all accounted for, leaving no money for major new road construction projects, such as certain phases of the Interstate 71/?Interstate 70 interchange. The state, Marchbanks said, also kicked $150 million in maintenance work into the future to balance the current budget.
"There is no state money to address congestion in urban areas," Marchbanks said. "Roadways will crumble, making driving dangerous. And there will be no state money for projects that might help a local government attract economic development to their area."
Marchbanks stressed that revenue options should not include additional debt. The state is already paying a hefty debt load, he said — $390 million this year, largely because of prior borrowing against future gas tax revenue.
That is money, he said, that could be used to fund dozens of projects.
"Instead of increasing that revenue stream, the state has been taking on more and more debt to complete projects and maintain the status quo," Marchbanks said. "Today, this has pancaked into a situation that is irresponsible to continue."
Local governments also are feeling the impact, Marchbanks said.
"I am not exaggerating when I tell you that additional delayed maintenance of these already poor roads and bridges could quickly create a situation from which county and municipal governments may never financially recover," he said.
Rep. Jack Cera of Bellaire, the committee’s top-ranking Democrat, said more research is needed into the $1 billion shortfall figure, but it’s clear that Ohio needs to raise more transportation money, especially for local governments.
"I give the administration credit for stepping up and identifying the need, but we want to see what their solutions are," he said.
Noting his concern about the amount of debt payments, Cera worries that the issue won’t be properly handled.
"We have this era of term limits, and we also have this era of not being willing to address major policy issues if they have a cost," he said.