Soaring Construction Costs, Limited Tax Revenue for Transportation a Growing Regional Problem

Jul 19, 2006

While construction costs soar globally, governments in metropolitan Washington are finding themselves hard-pressed to raise revenue for transportation projects according to a new report presented during today’s National Capital Region Transportation Planning Board (TPB) meeting.  Construction costs are rising due to increasing global demand on concrete and asphalt.  In the last two years (2004-2006), the TPB Progress Report on the Region’s Transportation Capital Funding Needs shows that construction costs have jumped about 28%.  Construction costs rose just 17% over the previous eight years.  

The region’s three jurisdictions collect gasoline tax revenues below the national average of 45.1 cents per gallon.  In Virginia, gasoline taxes total 38 cents per gallon.  In D.C., they total 40.9 cents per gallon; in Maryland, they total 41.9 cents per gallon.  While D.C., Maryland and Virginia have a fixed gas tax rate, neighboring states like West Virginia and North Carolina adjust part of their gas tax rate based on changes in fuel prices.   

Virginia and Maryland are also grouped with a relatively small number of states in the nation that have not adopted any ‘local option’ taxes that give local governments the authority to dedicate a special sales, income, gasoline, or vehicle tax for specific transportation projects or programs.  For example, a total of 28 states have a ‘local option’ sales tax to be used for road projects, transit projects or a combination of both.   

The Progress Report on the Region’s Transportation Capital Funding Needs informs area officials and the public about current transportation funding challenges and presents potential long-term funding solutions.

 
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