Chris Runyan
OCA President
Back in the May-June 2022 edition of Ohio Contractor magazine, I reported on the beginnings of an in-depth study of alternative revenuegeneration methodologies for highway financing for the State of Ohio. Back then, I stated, “We know greater adoption of vehicles that operate on something other than fossil fuels will begin to change the dialogue surrounding financing for the construction and maintenance of this nation’s highway system.” Kudos to the Ohio Department of Transportation (ODOT) for seeking this federal grant and collaborating with the External Advisory Committee (EAC), of which I was a member, and consultant for initiating the conversation.
Collection of data focused on three components. First, was input from the EAC. This was a diverse group of 17 members that provided their industry knowledge and perspectives on the operation and funding of the state’s highway system. Outreach to the public, legislative and business leaders was the second component. Obtaining this input provided perspective on the base knowledge each already possessed and views on various funding alternates that could be anticipated when informed of those alternatives. Finally, 32 alternative revenue mechanisms were analyzed to understand how each performed in terms of stabilizing Ohio’s transportation funding revenue into the future. Each alternative was measured against six guiding principles that were established by the EAC. These included:
- Stability: establishing revenues sustainable over the long term and under different economic conditions
- Efficiency: developing a sustainable collection process to maximize the revenue generated for transportation projects
- Simplicity and Ease of Administration: simple implementation and administration, including enforcement, coordination with other state agencies and legislative implementation.
- Transparency: supporting public awareness and understanding of transportation costs and how and why revenue is collected
- User Equity: recovering a proportionate share of the costs to build and maintain the transportation network from those who use it, and recognizing that costs can vary based on factors such as vehicle type, trip length, time of day, etc.
- Social Equity: ensuring equitable costs for motorists in Ohio, recognizing social, economic and geographic characteristics.
The study did not make specific recommendations, but it did define anticipated results based on options that were under study. As all of us tied to the highway transportation industry would anticipate, the Revenue Alternative Study forecasts a decline in state motor-fuel tax revenue due to electric vehicle adoption and improved fuel efficiency for cars and trucks. The ominous fact identified is, if left as is, that by 2040 the state motor-fuel tax will generate $877 million less than it otherwise would be due to electric vehicles and fuel-efficiency measures. While the forecasted revenue decline is concerning, viable alternatives exist to counter future shortfalls.
The goal of the Alternative Revenue Study was to provide information from which future discussion and debate could come forth. Let’s encourage the legislature and administrative bodies of state government to now use this tool to begin that conversation. It is not necessary to be peering over the edge of a cliff as the bottom falls out of Ohio’s highway funding mechanism at some future date. Prudence dictates we get on top of this issue now.
To view the entire report, you can find an electronic copy on the scrolling banner at the top of OCA’s website homepage or on OCA’s app.
