TCHOA Director Brett Howell: It Will Get Worse Before It Gets Better
Legislation that would dramatically impact county highway department budgets is progressing through the Senate and House committee system, with two major tests coming next Tuesday and Wednesday. SB273/HB321 (Massey, Howell) is set for 8:30 a.m. Tuesday, March 14, in Senate Finance. A finance subcommittee will be meeting ahead of that, which means the bill will not be heard until that calendar is complete. It is scheduled for 10:30 a.m. Wednesday, March 15, in House Finance Subcommittee.
While most of the talk about how the bill affects counties centers on the $300 million in one-time State Aid Road funds, equally important is the long-term impact a revenue sharing plan will have on county transportation needs. The bill is a comprehensive initiative that provides a portion of future state registration fee collections on electric and hybrid vehicles to counties, counterbalancing losses that are beginning to mount from lower-than-expected gasoline tax revenues.
Gas taxes are the single largest revenue source for many county highway departments, but that stream of funding is showing signs of stress, especially in the first seven months of FY2022-2023. We are seeing that the county portion of gas collections is already $1.5 million behind what was collected by this time last year. That deficit is likely to grow to $2-2.5 million by the end of June 2023. Collections traditionally lag this time of year for various reasons, including reduced travel during the winter months.
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