July 29, 2020 Teleconference  

Attended by NEMO RPC Executive Director Derek Weber, Transportation Planner Chris Feeney

MoDOT Update provided by director Patrick McKenna

Construction Program

  • $125 million more spent than this time last year
  • Really getting the work done despite COVID-19 challenges

COVID-19 Update

  • 20th and 21st COVID cases in MODT state statewide
  • 90% operating capacity despite COVID/ telecommuting
  • “Shared work” 80% of MoDOT team working 32-hour weeks resulting in $20 million in savings
  • MoDOT has slowed hiring, purchases, resulting in another $20 million in savings
  • Short term has not had an impact on projects because of these savings
  • Unemployment/ CARES funding insured no financial impact for MoDOT employees making less than $87,000 annually

Fuel Tax projections

  • July Report (May #s) motor fuel gallonage down 17%
  • 20-25% regular fuel
  • 11% diesel (commercial)
  • Traffic volumes down 10-15%
  • Not as bad as earlier in the year – rebounding

State Transportation Improvement Plan (STIP)

  • No STIP update this year
  • Planning to return to STIP for next year

State Budget

  • Budget meeting with Governor, continues to emphasize Work Force Development and Infrastructure
  • Very challenging budget times, state withholdings of $1 billion overall
  • Projecting an uptick in revenues

Federal Funding

  • House has approved $3 trillion HEROS ACT, Senate version only $1 trillion
  • House version includes $15 billion “backstop”; Senate version has none
  • McKenna disappointed in lack of backstop for transportation. 1
  • House approved Moving Forward Act – $1.5 trillion infrastructure funding – includes $494 billion INVEST in America Act for surface transportation reauthorization. Appears to be a significant increase. 2
  • Senate Committee – unanimously approved bipartisan America’s Transportation Infrastructure Act (ATIA) 3
  • Director McKenna noted it was unlikely to see any federal progress before November elections
  • He noted however there remains a lot of bipartisan support for the “recovery” impact of investments in transportation

Signs of Recovery

  • Director McKenna highlighted increases in motor vehicle sales
  • He reported strong sales in May – June helping offset some of the lost fuel tax revenue with sales tax increases

Question & Answer

Derek Weber – NEMO RPC – Governor’s Cost Share program

  • Weber asked for an update on the program in light of recent funding reductions
  • Director McKenna reported that general revenues big hit resulted in lapsing of $46 of the $50 million budgeted for the program
  • Ultimately a total of $25 million was restored to the project
  • The funding went to the highest-ranking projects per the original Department of Economic development scoring, with two exceptions for projects that had already begun prior to the funding cut.4
  • Director McKenna noted that some projects may not be ready by the funding deadline, which if acknowledged ahead of time, possibly could allow some of the cut projects to get back in line for the funding

Focus on Bridges (related NEMO RPC projects)

  • A status request was made on the program
  • Director McKenna said the program remains in limbo awaiting financial forecast updates
  • He noted that $50 million had previously been under contract with $200 million allocated in the governor’s bridge bond program and another $100 million in bonds expected to go to the market in 2022
  • He added that he current budget crisis has resulted in a pause on the planning side, but added the program was planned for 2020-2023 and still hoped there was time to see it through

Federal Funding

  • With revenues off 10-15% overall, MoDOT has stressed the importance of ensuring funding was in place before beginning projects
  • Director McKenna highlighted concerns about the Federal Transportation Trust Fund, which in its last reports showed a decline of 45% or more,5 which is expected to create an extreme cash crunch for transportation projects. He noted this has happened sooner than expected, which may result in impacts at the state level as early as this fall

1 The American Association of State Highway and Transportation Officials (AASHTO) sent a letter to Congressional leadership on April 6 requesting the immediate emergency injection of $49.95 billion to offset an estimated 30 percent loss in state transportation revenues over the next 18 months.

2 House of Representatives Transportation & Infrastructure Committee passed its $494 billion surface transportation reauthorization bill on June 18 by a party-line vote of 35 to 25. Ranking Member Rep. Sam Graves, R-Mo., disagreed with what he called the “one-sided” construction of the bill labeling it the “My Way or the Highway Bill” questioning how it will be funded – noting  “to pay for it with the gas tax, we’d have to double it at a time when so many Americans are struggling to make ends meet because of the pandemic.” Graves also noted that $2 out of every $5 spent by this bill – $200 billion in total – is tied up in trying to meet the goals of the Green New Deal. View all of his comments here.

3 America’s Transportation Infrastructure Act (ATIA) was introduced by Senate Environment and Public Works Committee (EPW) Chairman John Barrasso (R-WY), Ranking Member Tom Carper (D-DE), and Transportation and Infrastructure Subcommittee Chair and Ranking Member Shelley Moore Capito (R-WV) and Ben Cardin (D-MD). ATIA passed the EPW committee unanimously on July 30, 2019. The bill authorizes $287 billion over five years, including $259 billion for formula programs to maintain and repair America’s roads and bridges. The total represents an increase of over 27 percent from FAST Act levels. Highway infrastructure authorizations expire on September 30, 2020.

4 Originally 20 projects were approved in December 2019 for a combined $50 million in funding through the Governor’s Cost-Share Program. MoDOT’s Cost-Share Committee, made up of MoDOT’s Chief Engineer, Chief Financial Officer, Assistant Chief Engineer, and two Director-appointed employees along with DED staff, reviewed 48 applications requesting more than $92 million to deliver $321 million in projects. The committee selected 20 applicants to receive the $50 million, which would have delivered $131 million in projects upon approval by the Missouri Highways and Transportation Commission in January. NEMO PRC member Kirksville was originally approved for $955,294 for Business Route 63 improvements. In July 2020, funding was announced at a reduced level of $25 million, allocated to just nine projects, not including the Kirksville proposal.

5 Already projected by the Congressional Budget Office to be insolvent by the middle of 2021, The Highway Trust Fund (HTF) has an even worse outlook thanks to COVID-19. Published reports show that HTF saw a 79 percent drop in tax receipts in May compared to May 2019, as net deposits of tax receipts to the HTF dropped nearly $2.6 billion year-over-year in May. That was on the heels of reports that vehicle travel on roads and highways was down 40% in April. AASHTO says states are reporting multimillion-dollar revenue drops, and some have begun scaling back future road and bridge construction and repairs. Most states appear to be proceeding with projects already approved for 2020, and some have even been able to accelerate construction, but concerns are mounting for 2021 road and bridge work.