Tuesday, May 21, 2024

Louisiana officials look for solutions for transportation project funding

by BIZ Magazine

By Victor Skinner | The Center Square contributor

Louisiana will need to rethink how it funds transportation and infrastructure projects in the coming years to find a more stable source amid declining gas tax revenues tied to the shift toward electric vehicles.

The issue was among several transportation topics discussed Friday during a monthly policy webinar hosted by the Public Affairs Research Council of Louisiana.

Department of Transportation and Development Secretary Shawn Wilson and Rep. Mark Wright, R-Covington, chairman of the House Transportation Committee, joined PAR representatives to discuss the state’s $15 billion backlog of road and bridge projects, and important considerations for the Legislature to craft a long-term solution.

Both Wilson and Wright highlighted more than $1 billion in extra infrastructure funding beyond typical appropriations in the last budget, much of it federal infrastructure money, as well as a recent dedication from vehicle sales tax revenue that’s expected to generate up to $300 million a year for infrastructure.

But they acknowledged a Louisiana Legislative Auditor’s report issued in August that found the state will lose about $563.6 million in fuel tax revenues between 2023 and 2032 — including $107.5 million in 2032 alone — if electric vehicles account for 30% of new vehicles sold in the state by 2032.

“The short answer is it’s not enough to do what we need to do,” Wright said of current transportation funding, though he doesn’t believe “there’s any real serious attempt this year to do anything” about it.

Wright suggested an increase in the gas tax is unlikely “any time soon,” and instead favors “looking at the sales tax” as a possible solution.

“I just think it’s a better source of revenue, dependable and the volume,” he said. “I don’t think what we did (with devoting a portion of vehicle sales tax) is a solution in the long-term.”

Wilson noted that gas tax revenue has “lost more than 50% of its value” over the years, and agreed the state will need to change its approach to funding infrastructure in the future.

“I don’t think the gas tax is sustainable,” he said.

Research is underway in several areas of the country to explore other options, and Wilson said it suggests a road usage charge for all vehicles may be the way to go.

Unlike the gas tax, or special registration fees Louisiana lawmakers imposed on electric and hybrid vehicles in the last session, a road usage tax could leverage technology to charge residents based on how much they use the road, regardless of how vehicles are powered, he said.

“The one thing they all have in common is they move,” Wilson said. “Everything that moves can be charged on when it moves, where it moves.”

While there’s no consensus solution currently in Baton Rouge, Wright insists the “next governor will be the most influential voice on where things go.”

“We’re going to rely on the governor to take the lead on this,” he said.

Wilson has established an exploratory committee to consider a bid for governor in 2023, while Louisiana Attorney General Jeff Landry, the state Republican Party’s endorsed candidate, has been critical of Wilson’s leadership on transportation projects, specifically the widening of I-10 in Baton Rouge.

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