CLEVELAND — Buoyed by increases to the state's gas tax in 2019, the Ohio Department of Transportation's budget for new road projects, safety improvements and maintenance has managed to stay above water despite the ongoing pandemic, officials said.
At the start of the ongoing pandemic, Gov. Mike DeWine issued a stay-at-home order in late March last year. What followed was a drastic decline in motor vehicle traffic on the state's roads and highways. According to traffic count data, there was half the normal vehicle traffic in April 2020 compared to April 2019. From there, the math was simple: fewer cars on the road means less revenue from the state's gas tax.
At the time, transportation leaders knew the revenue shortfall was going to be significant but the degree of which was unknown, said ODOT spokesperson Matt Bruning.
"Certainly there has been an impact but I can tell you that impact would be much greater had Gov. DeWine and the General Assembly not passed an increase to the gas tax," Bruning said. "Without that, our situation would be much, much more dire."
According to the most recent data available, in the months of July, August and September, gas tax revenues were $354 million, a shortfall of about $45 million from the projected $399 million. Although traffic counts rebounded over the summer last year, total traffic numbers were down about 15% compared to 2019.
In April 2019, lawmakers signed off on the state's transportation budget, which included a 10.5 cent-per-gallon increase to the state's gas tax, bringing it more in line with other Great Lakes states at a total tax of 38.5 cents per gallon, which still ranks behind neighboring states like Indiana and Pennsylvania. The tax increase, which also included a 19 cent-per-gallon increase on diesel, went into effect in July 2019.
State leaders projected the tax increase alone would generate close to $1 billion annually, providing a much-needed infusion of cash to maintain, improve and expand the state's highway and road system. The money is also to be used to fund snow removal, road resurfacing projects as well as bridge maintenance.
While state lawmakers couldn't foresee it at the time, the tax increase has prevented ODOT from being in dire financial straits because of the pandemic.
"We couldn't even imagine that there would be a global pandemic that would put a dent in motor vehicle traffic to the extent that it has. It wasn't even on our radar," Bruning said. "It's not the situation that we wanted to be in or the situation that we planned on being in when we first introduced this. But, certainly, without it, the situation would be a lot tougher for ODOT and our local partners."
Although ODOT will certainly have to continue to find ways to cut costs — two major road projects have been re-scheduled — the pandemic-related shortfalls have not forced any projects to be canceled. In comparison to several other states, the shortfalls in Ohio's gas tax revenues are minor.
"Ohio isn't [canceling projects]," Bruning said. "The reason we're not doing that is because we were able to get the motor fuel tax increase in the last General Assembly. That has helped us tremendously to weather the storm."
Pennsylvania, which has a gas tax rate nearly double that of Ohio, faces an $8.1 billion funding gap over the next decade. Shortfalls this year are projected to be in excess of $400 million. Similar funding gaps can be found in Louisiana, Kentucky, Oregon, North Carolina, Washington and Missouri, just to name a few. Other states have introduced or passed tax increases or bond measures during the pandemic — a politically unpopular decision.
The American Association of State Highway and Transportation Officials has estimated a 30% drop in gas tax revenues nationwide, which will undoubtedly cause shortfalls in federal gas tax revenues, which helps to fund major interstate road projects and bridges.
Bruning said ODOT has been able to partially stem the shortfalls by implementing cost-cutting measures and efficiency improvements over the past few years. When advocating for the gas tax increase in 2019, ODOT Director Jack Marchbanks pledged $100 million in efficiency improvements through 2023. To date, the state's transportation agency has realized about $40 million in savings.
Some of the savings have come from how and, particularly, what ODOT uses to treat roads and bridges during winter weather. ODOT has fully transitioned to primarily using brine, which is a mixture of tap water and rock salt. Bruning said the brine mixture is 7 cents a gallon -- roughly half the cost per mile of using only rock salt -- while being more effective.
"We've used more than 6 million gallons of liquid de-icer so far in Ohio," Bruning said. "It is something we are ramping up because it is more efficient from a cost standpoint and from an operational standpoint in the way it works."
