State can't afford to fund full highway bonding plan
Saturday, January 5, 2002
JEFFERSON CITY, Mo. -- Unless it receives an influx of money, the state transportation department plans to issue no more than half of the highway bonds it originally had proposed for next year.
Transportation officials will submit a $500 million bonding plan to lawmakers for the fiscal year starting in July, but under current circumstances they expect to actually issue between $100 million and $250 million in bonds.
Members of the state Highways and Transportation Commission approved the plan Friday, but only after expressing concerns that lawmakers -- and the public -- might come to expect more than could be delivered.
"I think it's the right approach, we just really have to emphasize the caveats," said commissioner Bill McKenna of Barnhart.
At issue is $2.25 billion in bonding authority that lawmakers granted to the Missouri Department of Transportation two years ago.
The commission previously approved the issuance of $650 million in bonds during the past and current fiscal years. It must submit a plan this month to lawmakers detailing the next year of bond proposals.
The plan approved Friday would bring the bonding authority to $1.15 billion, but MoDOT staff said the agency can only afford to issue a total of $750 million to $900 million in bonds.
That's because the agency could not manage any greater debt payments unless it receives additional money -- either from the federal government or through state taxes and fees.
After this coming year, highway officials do not plan to propose any more bond projects, even though they would have room to do so under the 2000 legislation.
Near 'end of the cliff'
Transportation officials cite a two-pronged problem. In the short term, the poor economy has reduced federal and state revenues below expectations. In the long run, the state cannot get good bond ratings unless lawmakers extend existing taxes or voters approve new taxes.
"There will come a time when, without additional revenues, we're going to fall off a cliff," said MoDOT director Henry Hungerbeeler. "Unfortunately, we have reached a time that we are approaching the end of the cliff."