Rural areas of the state are the ones most likely to suffer if the Legislature cuts state transportation funding.
That’s the conclusion offered this week by Mississippi Department of Transportation’s Executive Director Melinda McGrath when asked at a Senate Appropriation subcommittee about the impact of a possible $50 million cut to the agency’s budget.
“The cut would be felt by the rural counties,” McGrath said.
The reason, McGrath said, is that much of the state’s transportation budget is composed of federal funds that can only be used on projects that meet federal guidelines.
Projects on rural roads rarely meet those standards, making such projects dependent on on funding from the state fuel tax, she said.
The Legislative Budget Office’s review asked for a $150 million cut to the Department of Transportation’s budget. The proposed cutback comes at a time when transportation officials say there is little that the can be done beyond road maintenance under current state funding.
At an October event hosted by Mississippi Today, Northern District Transportation Commissioner Mike Tagert said MDOT will be forced to end all projects aimed at expanding highway capacity after 2018 unless additional funding sources are developed.
Trying to see how the thresholds of cuts would affect the organization, Sen. Willie Simmons, D-Cleveland, chairman of the Appropriation subcommittee, asked McGrath what would happen if MDOT’s budget was cut by $50 million.
“I think it’s a pretty easy when looking at a budget that is as big as ours to say, ‘What would a $50 million cut hurt,'” McGrath said. As she explained, that kind of a cut can be devastating.
The Department of Transportation is a special fund agency that for FY2018 is expected to have a budget of approximately $1.2 billion. In that year, it projects to take in $525 million from the federal government or 43 percent of their budget. All of these funds come with restriction on use, McGrath noted.
Though money is appropriated by the Legislature each year, that money is not taken from the general fund but from revenue generated by the gas tax. From this source, MDOT will receive $300 million or 25 percent of its budget.
The remaining 30 percent will come from an array of user fees and taxes.
Out of that budget, approximately $26 million is obligated to the Office of State Aid Road Construction; $10 million to multimodal projects (which involve trains, planes, and waterway projects); $750 thousand to the Beaver Collection Fund; $300,000 to Keep Mississippi Beautiful; and $6.5 million for the upkeep of Welcome Centers and rest areas (not funded by the Mississippi Development Authority which normally handles tourism concerns for the state).
All monies generated outside of federal funds are important to the department as they are the most flexible dollars; able to go to rural roads that may not have federally required shoulders or striping.
Democrats announced plans before the session to repeal the franchise tax and put that money towards roads and bridges. However, a bill submitted by Sen. David Blount, D-Jackson, SB 2191 would repeal the franchise tax, but there is nothing in the language to show where that money would go.
Currently there is a lottery bill that would use proceeds to provide MDOT with an additional $100 million, still less than half of what the department will need to meet maintenance needs.
There also has been discussion in the House Ways and Means committee of using tax money generated from e-retailers such as Amazon going towards funding the Department of Transportation.
Sen. Simmons told Mississippi Today that he agrees that the department needs more money. Mentioning the $50 million cut was just a hypothetical to show where the money would come from.
“My main thing is maintenance money for construction,” Simmons said. “We’ve got to raise an additional 350 or so thousand dollars a year. There are some folks who want to do away with the current funding level and index it at 80 percent. Over here we’ve had a bill introduced to create a lottery which will create an additional $100 million maybe. But if we do that, that is only a third of what we need.”
Though no bill has been sponsored, Simmons said he would sponsor a bill to raise the gas tax so that MDOT had a larger allotment for maintenance projects: “I’m very supportive of the fuel tax. We could add a 10 cent fuel tax (increase) and generate 250 million dollars or so.”
McGrath reminded the committee that along with maintenance and new construction, the department also was part of the state’s response to natural disasters.
“Lately our forces have been doing a lot of first-responder work. The ice storm. Tornadoes. Our guys are the ones out there cutting the way. They’re the ones who get the trees out of the road. I never will forget during Hurricane Katrina, our guys were cutting the way while the governor was right behind our trucks in an (Mississippi Highway Patrol) car and right behind him was all the National Guard that had all the chainsaws and weren’t getting out of their trucks. And it was MDOT cutting the way.”
Mississippi Today reported Monday that MDOT had sent approximately 60 employees as part of a relief force to areas in South Mississippi affected by the tornado.
McGrath said, “I often think that we forget really what the Department of Transportation does.”