Gas Tax Diversions Cause Road Crisis in Illinois

Published June 1, 2005

Trying to balance the Illinois state budget by shifting highway funds into other government programs is creating a statewide “road crisis,” an unusual coalition of business and organized labor groups is warning.

The Transportation for Illinois Coalition (TFIC) said the diversions, when coupled with the current rate of road deterioration, will cause more than a quarter of the state’s highways to fall into “bad repair” within seven years.

In a January 2005 white paper, “Rough Roads Ahead,” the group called for an end to the use of state highway user fees for non-highway programs, the enactment of a federal highway bill with “significant funding increases,” and the beginning of a statewide “dialogue” to examine the need for “additional resources.”

The coalition has used the report as the basis for subsequent lobbying efforts aimed at securing increased highway funding.

Road, Bridge Repairs Delayed

The road crisis means the state won’t be able to start new construction to relieve congestion or serve growing communities, TFIC said. It will also prevent the state from keeping the existing system in shape by delaying repairs beyond what should be standard, thus plunging neglected highways into a downward spiral of further deterioration.

For example, at the projected rate of spending in the state’s 2005-2011 highway outlook, Illinois roads will have to be repaired on a 50-year cycle, even though their life expectancy is only 20 years. Bridges, which are expected to last 50 years, will have to be repaired on a 92-year cycle, the coalition said.

The stern warning was issued by TCIF Co-Chairs Doug Whitley, president of the Illinois Chamber of Commerce, and Margaret Blackshere, president of the AFL-CIO of Illinois. The 56 signatory members of TCIF are weighted heavily in favor of contractors and related highway interests but also include chambers of commerce and the Metropolitan Planning Council of Chicago.

Hundreds of Millions Diverted

TFIC blamed much of the highway funding crisis on the long-time practice of diverting highway user fees, such as the motor fuel tax and license plate fees, to a variety of non-highway purposes. From FY2002 to FY2004, the diversions more than doubled–to $783 million, from $368 million. Although the projected FY 2005 budget shows a decline in diversions, they remain far higher than usual, at $606 million.

The FY2004 diversion of $783 million amounted to nearly 30 percent of state user-fee revenues. In effect, that accounts for 13 cents of the 19-cent state gasoline tax, the report noted. Even with the decline in diversions in the FY2005 budget, they would represent 10 of every 19 cents.

None of the 6.25 percent state sales tax that motorists also pay at the pump goes to the highway fund, thus depriving the road system of any revenue increases that flow from record-high gasoline prices.

Normally, the diversions go to departments that can arguably claim they should be compensated for highway-related costs, such as the State Police for patrolling highways, Central Management Services for administering the road fund, and the Secretary of State for license replacement. But just how much of the diversions ultimately are used for highway-related purposes has been a long-running debate in Illinois. For its part, TFIC did not contest the legitimacy of any particular diversion, focusing instead on the impact of the total amount diverted.

More recently, the practice of diverting highway funds has become such an accepted practice that $50 million was placed in the state’s General Revenue Fund without any pretense that the money was meant for highway-related projects. No such “one-time” grab is planned for the FY2005 budget.

Bad Roads Backlog to Triple

Illinois, with the third-largest interstate highway network in the nation, expects–as does every state–significant help (some $900 million annually) from Washington, but a new multiyear transportation bill has been held up by political and budgetary considerations.

The backlog of bad roads in the state at the end of FY2011 is expected to reach 4,450 miles, triple the current backlog of 1,470 miles. The TFIC report concedes roads could be built to last longer–at a price higher than what taxpayers may be willing to support–but even so, longer pavement life doesn’t eliminate the need for safety improvements and congestion relief.

The report said the department is reexamining its priorities to stretch its limited dollars as far as possible, narrowly focusing on keeping the highway system usable. But its task is daunting. For example, 85 percent of Illinois interstate highways, the workhorse of the road system, are older than 20 years, and reconstruction needs are estimated to be $3 billion–all of it currently unfunded.

Altogether, annual road construction needs are estimated to cost between $2.5 billion and $3.7 billion. But the state’s FY2005 construction program budget is only $1.5 billion, and it is expected to dip to less than an annual average of $1.2 billion from FY2006-2011.

Dennis Byrne ([email protected]) is a Chicago writer and consultant who formerly covered highway and transportation issues for the Chicago Sun-Times and Chicago Daily News.