JEFFERSON CITY, Mo. – The Missouri Department of Transportation (MoDOT) received enough unexpected revenue to continue to receive federal money, the department reported Friday.
Steven Miller, chairman of the Missouri Highways and Transportation Commission (MHTC), wrote in a statement released July 24 that better economic conditions provided higher than anticipated revenue streams for the upcoming fiscal year, not only for MoDOT but for the entire state as well.
“This was a little surprising because in the recent past, MoDOT’s revenues have varied only slightly from projections, and some of those variances were negative rather than positive,” Miller said in the release. “… Occasionally there are anomalous years – this year was just such a year.”
Projections for statewide growth were short by 8.8 percent, and for funding related specifically to funding MoDOT, the projections were off by 4.5 percent. That low projection means that MODOT has $47 million more than anticipated.
Most of the $47 million will go towards ensuring that the state can meet its obligation to receive federal funds for the fiscal year 2017.
“MoDOT’s last financial forecast predicted that if nothing changed, we’d need approximately $42 million in state matching funds to avoid the loss of approximately $167 million in federal funds in 2017,” Miller wrote. “This revenue increase means MoDOT should be able to make its federal match in 2017.”
The amount of money seemingly found, just eclipsing the amount needed may seem miraculous, but Fay Fleming, the statewide communications director for the MHTC, warns not to put too much faith into the news.
“None of this is magical; it’s not mana from heaven,” she said. “It’s a way that revenue gets generated for transportation, and it moved up higher than the state of Missouri thought.”
MoDOT receives its revenue from a variety of sources, and they primarily come from the infrastructure around automobiles. Taxes on fuel, license registration, sales tax on vehicles and other costs go straight into the coffers of the department.
Fleming said that lower fuel prices especially were the likely cause for this one-time boon. Crude oil prices shrank by nearly 50 percent since this time last year.
“It makes sense that the fuel taxes would be up because the cost of fuel would be lower, and when the cost of fuel is lower, people drive more,” she said.
When people have more money to spend, they buy cars on which they must spend money to the state in the form of sales tax. They also drive those cars, which need fuel which also has a tax.
Regardless, both Miller and Fleming warned that this one-time boost was exactly that: one-time. Neither forsees that more unexpected cash will come into the pockets of MoDOT, and the finances of the department are still in somewhat dire straits.
“One could naively believe this unanticipated revenue solves Missouri’s transportation funding crisis,” Miller wrote. “This would be huge mistake. Our funding system is still broken. We still have the seventh largest system and rank 46th in funding. We are woefully underfunded.”
With over 500 bridges in the state in critical condition and more than 30,000 miles of road that could use improvement, Fleming warns that while the immediate needs of the department had been met, MoDOT still faces serious budgetary shortfalls, while the blaze at their feet had been extinguished, “there’s a fire still coming.”
The MHTC will meet in early August to determine exactly how to utilize the unexpected finances.