State Funding History
Funding stagnation hampers highways
After Oklahoma’s great era of roadbuilding culminated with construction of the interstate system in the 1960s and 1970s, funding for highway construction and maintenance quickly began to fall behind.
From 1985 to 2005, state highway funding was based almost entirely on fluctuating or diminishing motor fuel tax collections, which had remained stagnant at about $200 million for more than 20 years. Fluctuations in gas prices and increased fuel efficiency decreased the amount of motor fuel taxes collected. Additionally, construction and maintenance expenses continued to grow exponentially due to increased cost of materials, labor, engineering and environmental mandates.
The state appropriation to ODOT in 1985 was about $210 million and the 2005 appropriation was about $200 million. It is estimated that, after inflation, state funding for roads and bridges had actually decreased by 45 percent from 1985 to 2005.
During this time, Oklahoma relied solely on federal funds for construction while the annual state funding barely covered basic maintenance and operations. There was no funding for asset preservation to keep highways and bridges in good condition after they were constructed or to extend the life of the infrastructure.
By the 1990s, much of Oklahoma’s transportation system had far exceeded its design life, leaving the state with some of the worst highways and bridges in the nation. Bridges that had been built for the traffic of the early 1900s were still in service decades longer than they were designed to be and were in need of major rehabilitation or replacement. Unfortunately, no solution was in sight and, in the mid-1990s, Oklahoma was ranked first in the nation for transportation revenues being diverted to other areas of government. With such low state funding, ODOT was in danger of losing eligibility for federal matching funds for highway construction.
Secretary of Transportation and ODOT Director Neal McCaleb attempted to push the legislature to direct all state motor vehicle taxes and fees to transportation, as is common in other states, but was unsuccessful.
Secretary of Transportation and ODOT Director Neal McCaleb
Short-term efforts were made to secure some temporary funding increases for road and bridges through the 1997 Capital Improvement Program (CIP), which pledged about $850 million in funds over several years for targeted highway projects of economic significance. While the CIP was successful in expanding highways in certain locations to meet the increasing traffic and freight movement demands of the 1990s economy, it did little for the existing infrastructure system.
At the insistence of Oklahoma Transportation Commission Chairman and later Secretary of Transportation Herschel Crow, ODOT began holding town meetings statewide in the late 1990s to bring the public’s attention to the need for stable and adequate highway funding.
Oklahoma Transportation Commission Chairman and Secretary of Transportation Herschel Crow
Shocking bridge conditions receive national attention
In May 2002, an errant barge struck one of the piers on the I-40 bridge over the Arkansas River near Webbers Falls, bringing an entire section of the bridge down into the water. The tragic event resulted in 14 fatalities and brought national and international attention to the state. One of the nation’s only coast-to-coast interstate routes, I-40 was out of commission for 65 days while the bridge spans were reconstructed. This meant that tens of thousands of cars and commercial trucks had to be detoured around the closure on rural state highways and over incredibly outdated bridges.
The bridge problem was not only a threat to public safety but also the state’s economy. School buses could not cross some highway bridges and Oklahoma manufacturers and farmers with heavy loads were often forced to detour to other states just to get their products to market. In 2004, an all-time high of 1,168 of the state’s 6,800 highway bridges were rated structurally deficient and Oklahoma had the notorious distinction of having some of the worst-ranked bridges in the nation.
Director Gary Ridley began a statewide tour to bring the public’s attention to the stark truth that their infrastructure was in such poor shape that ODOT would never catch up without funding reforms. Ridley and other engineers presented to anyone who would listen in cities and towns statewide. They took members of the public and the press on foot to visit bridges, which looked bad but not threatening from the top, while the structures underneath showed shocking signs of decay such as rotting wooden supports and metal plates that had completely rusted through.
Secretary of Transportation and ODOT Director Gary Ridley
Updated funding models proposed
The department’s dire situation was initially met with disbelief and mistrust from members of the legislature. State Rep. Mark Liotta (R-Tulsa), then chairman of the House Appropriations and Budget Subcommittee on Transportation, challenged ODOT’s accountability and requested large amounts of information from the agency. The data showing the chronic underfunding and the condition of the system convinced Liotta and support began to materialize for a new funding model.
State Rep. Mark Liotta
During the 2005 legislative session, the Republican-led House and the Senate, controlled by Democrats, worked with strong support from Secretary of Transportation Phil Tomlinson to pass House Bill 1078. The measure was signed by Gov. Brad Henry, creating the Rebuilding Oklahoma Access and Driver Safety (ROADS) Fund and setting the stage for later improvements in transportation funding.
Secretary of Transportation Phil Tomlinson
Gov. Brad Henry
HB 1078 Summary
- Increased state transportation funding by $17.5 million each year or by $35 million in years when the state revenue was anticipated to climb at least 3%, until an additional $170 million in annual funding was reached.
- The new funding would come from an income tax allocation and would be in addition to fuel tax revenue.
In a special September 2005 election, Oklahoma voters soundly defeated a ballot measure that would have increased motor fuel tax rates for the first time since the 1980s and designated the revenue collected solely to transportation projects. With gas and diesel prices soaring following Hurricane Katrina, the fuel tax measure State Question 723 was rejected by more than 87 percent of voters, making it the most lopsided defeat of a ballot measure in state history. SQ 723’s rejection was interpreted as a sign that the voters wanted the state to address its infrastructure problem using exiting revenues rather than through a tax increase.
Historic funding reforms enacted
Though delayed a year by political wrangling, legislation pushed by Liotta and Speaker of the House Todd Hiett (R-Kellyville) called for a direct allocation of income tax proceeds “off-the-top” of state revenues, rather than going through the legislative appropriation process. Support for this method of increasing funding was bolstered by the addition of similar revenue streams for passenger rail, public transit and county road and bridge funding.
Speaker of the House Todd Hiett
During the 2006 special legislative session, House Bill 1176 by State Rep. and future Speaker of the House Chris Benge (R-Tulsa) and Sen. Johnnie Crutchfield (D-Ardmore) was passed with unanimous, bipartisan support. It built on previous legislation by providing an annual increase in ROADS funding and set in motion a reversal of the long-standing, stagnant funding for Oklahoma’s transportation system. The ROADS Fund would support ODOT’s Eight-Year Construction Work Plan, a fiscally constrained plan that included only validated highway projects that balanced the state’s critical needs with available state and federal funding.
State Rep. Chris Benge
HB 1176 Summary
- Increased the annual state funding to $50 million in years during which the state’s revenue was anticipated to climb at least 3%, or remaining at $17.5 million in years it was not
- Increased the cap for the ROADS Fund allocation from $170 million to $270 million
- Created the High Priority Bridge Fund and directed that fuel tax revenue previously deposited in the General Revenue Fund be allocated to the new fund. This amounts to approximately $6 million annually.
- Provided $70 million to service the debt from the previous decade’s CIP. Prior to this action, ODOT would generally provide the debt service from the operating and construction budgets.
Liotta’s efforts, with ODOT’s support, also took the politics out of transportation projects. Before the Eight-Year Plan, projects had been traditionally chosen by legislators, which created a political system that favored expansion of the system rather than prioritizing needs of the existing infrastructure. Legislators were removed from the project selection process and the professionals at ODOT were placed in charge of selecting only validated, critical highway projects. It was a major political shift in direction in which legislators voluntarily voted themselves out of the power of choosing projects.
The legislation benefitted county roads and bridges through the creation of the County Improvements for Roads and Bridges (CIRB) Fund. The CIRB Fund would receive an allocation of state motor vehicle revenues to fund a Five-Year Plan of major county road and bridge projects overseen by ODOT and the county’s circuit engineering districts. This would take the politics out of county road project selection and help fund major projects that could never have been built by a single county. Since ODOT design standards and contract administration were used, the counties could apply for federal matching funds for these projects.
Sustainable funding – A journey, not a destination
Subsequent pieces of legislation in 2008, 2010 and 2011 increased the annual income tax allocations, raised the ROADS Fund cap and removed the growth trigger, allowing more revenue to be deposited in the fund.
In 2012, landmark transportation funding legislation House Bill 2248 provided funding to support Gov. Mary Fallin’s Bridge Improvement and Turnpike Modernization Plan.
Gov. Mary Fallin
HB 2248 Summary
- Beginning in FY 2014, the income tax allocation to ODOT was increased from $41.7 million to $59.7 million with incremental increase of $18 million annually until the ROADS Fund reached the cap of $575 million.
- Increased ROADS funding would enable ODOT to successfully carry out the governor’s plan for all remaining deficient highway bridges to be programmed for rehabilitation or replacement by 2019.
When combining maximum revenue from the ROADS Fund and the fluctuating fuel taxes, state support for highways and bridges has grown to about $775 million annually by 2019 – over three times the levels in 2005 – finally reaching levels required to sustain a transportation system of Oklahoma’s size.
Annual ROADS Fund allocations since 2006
Since 2006, major progress has been made on bridges, with more than 1,400 replaced or rehabilitated, and interstate pavement, through reconstruction of much of the interstate system. Highways are receiving safety improvements including paved shoulders and centerline rumble stripes on two-lane highways and cable barriers on divided highways.
Even once all remaining structurally deficient bridges have been addressed by the end of the decade, ODOT will have to continue replacing or rehabilitating at least 90 bridges each year just to keep up with the aging infrastructure system and maintain its bridge program. With bridges finally reaching a manageable state, more resources can be used to address deteriorated pavement, two-lane highways without paved shoulders, steep hills and sharp curves, outdated highway interchanges and growing urban congestion.
Funding increases since 2006 represent a path to a sustainable model for maintaining the single largest asset owned by the state, a highway system valued at $60 billion. Oklahoma was patient in allowing funding to build up over more than decade to where it is today. Rather than the past model of providing one-time funding for specific projects, continued annual allocations to the ROADS Fund will allow ODOT to modernize and preserve the state’s infrastructure, all without new taxes or debt.
Oklahoma’s roads and bridges didn’t deteriorate overnight. Decades of flat funding led to the condition of the transportation system, and it will take decades to catch back up to where the public expects the infrastructure to be and require a long-term commitment to fund asset preservation so highways aren’t allowed to deteriorate again.