MoDOT Looks At Ways To Deal With a Dwindling Budget

It’s not a secret that funding for highway construction and maintenance projects will take a nosedive in 2010. But what exactly does that mean for MoDOT and the public? For the short term, it means MoDOT has to look at ways to reduce administrative costs and continue to promote innovation. In the long term, the department must work with legislative leaders to find ways to increase future funding for transportation.

Here’s the situation. Missouri is coming off of the two biggest construction programs in MoDOT history - 2006 and 2007 - largely due to the additional funding received from Amendment 3. In 2008, the construction program will total $1.23 billion. After that, however, funding for highway projects begins to decline until it drops off a cliff in 2010 – plummeting to $570 million.

That means MoDOT will have to concentrate on keeping our highways in good condition, instead of building the projects our communities need to keep travelers safe, fight congestion and grow and prosper. Over the next 20 years, MoDOT will have $19 billion to spend on highway projects, but publicly identified needs will total $37 billion - a gap of $18 billion.  

MoDOT’s financial situation is largely due to growing project needs, increasing construction, maintenance and fuel costs and a stagnant funding source. State and federal fuel taxes – the primary source of transportation revenue - are not set up to keep pace with the rising cost of construction and maintenance. They also provide little revenue for alternative modes of transportation, such as aviation, rail, barge and public transit.  

“To put it simply, our operating costs are growing at a faster rate than the revenue we’re taking in,” said Roberta Broeker, MoDOT’s chief financial officer. “We have more needs than we do resources, so we have to make some tough decisions. Our top priority is the STIP (the Statewide Transportation Improvement Program).”

To gear up for this funding drop, MoDOT is doing several things:

• We’re downsizing our budget by giving up positions that have remained unfilled for several years and hiring fewer seasonal workers;
• We’re not filling some vacancies left by people leaving or retiring;
• We’re decreasing district and division administrative budgets and putting the money into maintenance and construction; and
• We’re continuing to stress the need for innovation and practical design in everything we do.

Rumors that we’re cutting staff – meaning people who are currently in jobs – are not true, said Broeker.

“We don’t have any plans to lay people off,” she said. “At this point, we’re not cutting staff, we’re eliminating vacancies and decreasing our budget by the amount of money we historically have not spent.”

Chief Engineer Kevin Keith said it is prudent to do what we can to tighten our belts given the move we’ll be making in the next three years from a construction program that contains new projects to one that primarily will focus on maintenance.

“New projects require more design work, right of way acquisition and construction, whereas maintenance activities are less complex and costly,” said Keith. “That’s why the districts’ administrative and construction budgets were reduced by 1 percent for fiscal year 2008, but maintenance budgets grew by an average of 2 percent.” 

Broeker acknowledges there may be some tough times ahead as Amendment 3 bond proceeds are used up and the construction program shrinks.

“It’s hard to see critical needs and know the funds aren’t available to meet them,” she said. “But we have to control costs – that’s the bottom line.”