MoDOT looks to future needs, costs

By Henry Hungerbeeler

JEFFERSON CITY, Mo. -- I read a recent Southeast Missourian editorial that again criticizes the 1992 plan for improving Missouri's highways and bridges. The editorial makes some statements with which I can agree and some with which I clearly disagree.

The editorial says the legislature intended to impose the extra 6-cent fuel tax only for as long as it took to fulfill the promises in the plan. In late 1994, we told people that funding was insufficient to complete the plan. And in 1998 we notified them it would take much longer than the 15 years. The errors made in promising such an ambitious plan in only 15 years are a matter of record, and new procedures are in place to provide more accurate financial forecasting.

We did not discard the plan. We said the plan could no longer be the financial blueprint. In fact, to this day almost all our highway construction budget goes to projects that were in the plan.

Since 1992, the additional 6-cent motor-fuel tax has helped provide Southeast Missouri with more than $118 million worth of projects to take care of the existing highway system and more than $158 million worth of major projects. Without the funds, many of these projects would not be where they are today. These include four-laning U.S. 60 from Poplar Bluff to Sikeston, beginning work to four-lane Highway 412, four-lane improvements to U.S. 67 in St. Francois County and four-laning U.S. 67 in Poplar Bluff. Work also continues on the Bill Emerson Memorial Bridge in Cape Girardeau.

I continue to take issue with the incorrect statement, "How MoDOT missed these projections by so large an amount has never been satisfactorily explained." The issue has been explained several times and verified by the state's Office of Administration and an independent auditing firm.

The audit report listed three flawed cost assumptions that led to the realization that the plan could not be constructed in any time frame with current existing revenue. Those factors have been corrected.

Lack of a factor of project inflation and project growth: The Missouri Department of Transportation currently factors in a 3 percent inflation and project-growth rate per year in the first five years of project planning (reflected in the Statewide Transportation Improvement Program). The rate is 4.5 percent for estimated costs for projects beyond five years. MoDOT now factors inflation and project growth into cost estimates and makes cost projections on a five-year time frame, which provides more realistic estimates.

Revenue/expenditure imbalance: The plan would not have been completed in 2010, even under the original assumptions made in 1992. As crafted and approved in 1992, projected costs exceeded projected revenue by $1.43 billion. More specifically, the 1992 plan anticipated revenue of $12.59 billion through 2010, assuming extensions of the 6-cent motor-fuel tax currently scheduled to sunset in 2008. The plan estimated $14.02 billion in expenditures.

Deficient initial cost estimates: New cost estimates mandated by accountability legislation reveal that projects remaining after 1999 will cost $19.03 billion. The initial cost estimate for the entire 15-year plan in 1992 was $14.02 billion. MoDOT estimates the original cost estimates for the 15-year plan were understated by $3.8 billion in 1992 dollars, a variance of 27 percent.

Other factors affected our revenue. The law enacting the 6-cent fuel tax also removed the cap on the amount MoDOT sent to other agencies, allowing this funding to grow at the same rate as state revenue. Since the cap was removed, MoDOT's money to other agencies has increased up to $55 million annually. And in 1994 the amount of money Missouri's counties received from the 6-cent gas tax increased from 10 to 15 percent. Both actions resulted in less revenue available to MoDOT to complete the 1992 plan's projects.

It's not productive to dwell on past errors, which have been explained many times. Those interested in transportation progress -- including the Missouri Farm Bureau, the Missouri Chamber of Commerce and other transportation organizations -- have joined to work together to find solutions to the state's transportation problems.

Our goal is to ensure a transportation system that will serve this generation and the next. It will take $1 billion in additional funds each year to provide the transportation improvements Missourians want. It will be up to Missourians to demonstrate how much they're willing to pay for those improvements by responding either to legislation passed by the General Assembly or submitted to the people through initiative petition.

We're proud of the fact that for the last few years our costs for projects have actually come in about 1 percent lower than budgeted. We are committed to being fiscally responsible. We know it's the taxpayers' money. We're taxpayers too. We all want to be sure we all get the best return on our investment.

MoDOT is accountable to our customers, the citizens of Missouri. Detailed financial information is available on our Internet Web site, www.modot.state.mo.us, or by calling MoDOT customer service at 1-888-ASK-MODOT (275-6636).

Henry Hungerbeeler is the director of the Missouri Department of Transportation.