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Salem Oregon Front Street

Funding uncertainty delays next STIP

With the latest update to the Statewide Transportation Improvement Program (STIP) nearing completion, ODOT would normally be starting preliminary work on the development of the next STIP. But with high levels of uncertainty about state and federal transportation funding, the Oregon Transportation Commission has decided to hold off on the next STIP update. Instead of starting work on a STIP covering the 2017-2020 period, the next STIP will cover the period 2018-2021. The STIP is ODOT’s multi-year capital program, listing all major state and local highway and transit projects in the state.
With state highway funds nearly fully dedicated to maintenance, operations and debt service on bonds, ODOT is heavily reliant on federal transportation funding to build new projects. But due to the imminent exhaustion of the federal Highway Trust Fund’s balances sometime this year, federal funding is highly uncertain. The Highway Trust Fund’s revenues fall short of expenditures by about $15 billion per year, so Congress will have to provide additional resources for the trust fund by this summer if it wants to avoid cutting surface transportation programs by about 30 percent. Given the significant possibility that federal funding will fall or at least stagnate, ODOT is taking a conservative approach to avoid promising projects it won’t be able to fund if the federal government cuts back.
“It’s really hard for us to program projects six years from now when we don’t know how much money we’ll have six months from now,” noted ODOT Director Matt Garrett.
Due to the funding uncertainty at the state and federal levels, ODOT would have to set conservative funding levels for the next STIP update if it started today. This might preclude funding anything other than system preservation projects like bridge repairs and paving, leaving no funding for the Enhance program, which pays for projects across all modes that expand capacity. Pushing off project selection could allow for a clearer picture to develop at the federal level, particularly if Congress takes action to shore up the Highway Trust Fund’s long-term finances. This could also allow for greater levels of state funding for projects if a transportation funding package materializes in the Oregon Legislature. Conversely, if Congress and the Legislature don’t provide additional funding, ODOT will need to take a more conservative path.
Because funds are already programmed out to 2018, building a 2018-2021 STIP provides the opportunity to allocate three years of new funding rather than two years under a 2017-2020 STIP. Providing an adequate amount of funding for allocation in the project selection process is important for applicants and advisory committees that have to sort through projects to arrive at recommendations.
“When we asked our staff how much money we would need to have in the Enhance program to run a legitimate process, they told us that the $225 million we allocated in the last STIP was pretty much the minimum,” said Jerri Bohard, ODOT’s Transportation Development Division administrator. “Selecting three years of projects gives us a greater likelihood of getting to this funding level, making it a much better process for ODOT and our partners.”
Even though project selection won’t begin anytime soon, ongoing work will continue on aspects of the next STIP, particularly work on updating the process and developing criteria for project selection.