Transportation Governance and Finance A 50-State Review of State Legislatures and Departments of Transportation November 2016 Acknowledgments National Cooperative Highway Research Program (NCHRP) This study was conducted with funding provided through the Project 20-24 . The NCHRP is supported by annual voluntary contributions from the state departments of transportation (DOTs). Project 20-24 is intended to fund quick response studies that address specific needs of chief executive officers and other top managers of these departments. The work was guided by an NCHRP project panel composed of Travis L. Brouwer, Oregon Department of Transportation; Karen S. Doyle, Maine Department of Transportation; Linda T. Hull, Utah Department of Transportation; David Kuhn, New Jersey Department of Transportation; Humberto A. Tasaico, North Carolina Department of Transportation; Lorie Tudor and Gill Rogers, Arkansas State Highway and Transportation Department; and Daniel Yeh, Wisconsin Department of Transportation. Liaisons to the panel included J. Woody Stanley, Federal Highway Administration; Douglas Shinkle and Kevin Pula, National Conference of State Legislatures; and Joung H. Lee and Jennifer Brickett, American Association of State Highway and Transportation Officials (AASHTO). The project was managed by Andrew Lemer, NCHRP Senior Program Officer. In addition, this report represents substantial work by more than 200 legislative staff members and DOT personnel in all 50 states and the District of Columbia (see Table 1 on page 10 for a full list of organizations that participated in the project’s survey research). Without the invaluable survey responses, follow-up information, and review comments from these experts in the states, the report could not exist. Thanks, too, to the Transportation Research Board’s state representatives, many of whom as- sisted with the survey research in their respective states, and to the hundreds of state legislators, legislative staff, DOT officials, and others who contributed to and gave meaningful feedback about the 2011 edition of this report. Special thanks to author and principal investigator Jaime Rall of J.R. Rall Consulting LLC, Roseland, Indiana. Disclaimer This publication relies heavily on reported data, both from the original 2011 edition and the current research. Although consid- erable efforts were made to verify the accuracy and completeness of the information contained in this report, errors or omissions may exist. © 2016 by the American Association of State Highway and Transportation Officials. All rights reserved. Duplication is a violation of applicable law. TGF-2-OL | ISBN 978-1-56051-668-2 2 • A 50-State Review of State Legislatures and Departments of Transportation AASHTO Executive Committee | 2015–2016 President Paul Trombino, Iowa Vice President David Bernhardt, Maine Secretary-Treasurer Carlos Braceras, Utah Executive Director Bud Wright, Washington, DC Regional Representatives Region I Leslie Richards, Pennsylvania Pete Rahn, Maryland Region II Paul Mattox, West Virginia Charles Kilpatrick, Virginia Region III Charles A. Zelle, Minnesota Randall S. Blankenhorn, Illinois Region IV Brian Ness, Idaho Carlos Braceras, Utah Immediate Past President Vacant Transportation Governance and Finance • 3 AASHTO Standing Committee on Finance and Administration | 2016 Chair Kansas Oregon John C. Schroer, Tennessee Chris Herrick Tracy Wroblewski Vice Chair Kentucky Pennsylvania Mike Patterson, Oklahoma Asa Swan James Ritzman Secretary Louisiana South Carolina Lee A. Wilkinson, Iowa Barry Keeling Brian Keys Don Johnson Liaison South Dakota Maine Ben Orsbon Joung Lee, AASHTO Karen Doyle Tennessee Maryland John Schroer Members Betty Conners Joseph Galbato Alabama Massachusetts Texas Bill Flowers William Betts Brian Ragland Arizona James Bass Michigan John Bogert, Laura Mester Utah Kristine Ward Myron Frierson Becky Bradshaw Arkansas Trudy Schutte Vermont Lorie Tudor Minnesota Faith Brown Scott Bennett Tracy Hatch Leonard LeBlanc California Mississippi Virginia Norma Ortega Byron Flood John Lawson Colorado Janet Lee Washington State Heidi Humphreys Lisa Hancock Amy Arnis Maria Sobota Missouri West Virginia Connecticut Melissa Black Keith Chapman Pamela Sucato Roberta Broeker Robert Watson Robert Card Montana Robert Pennington Delaware Lawrence Flynn Wisconsin Huhg Curran Nebraska Daniel Yeh Lanie Thornton Michael Keays Paul Hammer District of Columbia Nevada Wyoming Eric Stults Robert Nellis David Stearns Kathryn Valentine Rudy Malfabon Associate Members Florida New Hampshire Lisa Saliba Alberta Transportation Carol Macuch Rachel Cone Dave Bentley Robin Naitove New Jersey Federal Highway Administration Gary Brune Georgia Brian Bezio Angela Whitworth New Mexico Los Angeles County Metropolitan Marcos Trujillo Hawaii Transportation Authority Gerald Dang New York David Yale Ronald Epstein Idaho New York State Bridge Authority David Tolman North Carolina Brian Bushek David Tyeryar Illinois Saskatchewan Ministry of Jeff Heck North Dakota Highways and Infrastructure Norlyn Schmidt David Stearns Indiana Daniel Brassard Ohio Mark Ratliff Matt Downs Iowa Oklahoma Lee Wilkinson Mike Patterson Russell Hulin 4 • A 50-State Review of State Legislatures and Departments of Transportation AASHTO Subcommittee on Transportation Finance Policy | 2016 Chair Iowa Ohio Lorie Tudor, Arkansas Dan Franklin Matt Downs Richard Winning Vice Chair Kansas Laura Mester, Michigan Chris Herrick Oklahoma Chelley Hilmes Secretary Kentucky Russell Hulin Ron Rigney James M. Bass, Texas Oregon Louisiana Liaison John Baker Barry Keeling Jennifer Brickett, AASHTO Travis Brouwer Don Johnson Pennsylvania Maine Members James Ritzman Karen Doyle Alabama South Carolina Maryland Bill Flowers Brian Keys David Fleming Alaska Steven Watson South Dakota Peter Christensen Ben Orsbon Massachusetts Arizona Beth Pellegrini Tennessee Kristine Ward Kostandin Theodhori Jennifer Herstek Lisa Danka William Betts Joseph Galbato Arkansas Michigan Texas Gill Rogers Laura Mester James Bass Jared Wiley Myron Frierson Utah Jessie Jones Trudy Schutte Becky Bradshaw Kevin Thornton Minnesota Linda Hull Lorie Tudor Sergius Phillips Scott Bennett Vermont Tracy Hatch Leonard LeBlanc California Mississippi Norma Ortega Virginia Byron Flood John Lawson Colorado Janet Lee Laura Farmer Ron Papsdorf Lisa Hancock Washington State Connecticut Missouri Amy Arnis Patricia Hustus Roberta Broeker Doug Vaughn Robert Card Montana West Virginia Delaware James Skinner Karen Zamow Brian Motyl Lynn Zanto Robert Watson District of Columbia Nebraska Robert Pennington Eric Stults Michael Keays Wisconsin Florida Nevada Daniel Yeh Lisa Saliba David Olsen Wyoming Rachel Cone Felicia Denney John Davis Robin Naitove Robert Nellis Associate Members Georgia New Mexico Angela Whitworth Marcos Trujillo Federal Highway Administration Brian Bezio Hawaii New York Clarita Hironaka Ronald Epstein Los Angeles County Metropolitan Transportation Authority Idaho North Carolina David Yale David Tolman Calvin Leggett Kahlieh Honish Humberto Tasaico Illinois Joanne Woodworth North Dakota Roxy Heck Norlyn Schmidt Robert Fode Indiana Steve Salwei Daniel Brassard Transportation Governance and Finance • 5 Notes on Usage “Legislatures” and “DOTs” are used throughout as general terms for these institutions across the states. In the tables and state profiles, the capitalized, proper name is used for the legislature or department of transportation in a particular state. 2010 Style Guide All statutory citations are formatted according to the National Conference of State Legislatures’ , except those for Arkansas, Georgia, and Illinois, which are cited as requested by survey respondents. “Fiscal year” (abbreviated FY) refers to the fiscal year of the specific state being described. State fiscal years begin on July 1 except in Alabama (Oct. 1), Michigan (Oct. 1), New York (April 1), Texas (Sept. 1), and the District of Columbia (Oct. 1). The fiscal year is identified by the year in which it ends. Abbreviations have mostly been avoided. Exceptions include DMV (division [or department] of motor vehicles), DOT (depart- ment of transportation), FY (fiscal year), GARVEE (grant anticipation revenue vehicle), HOT lane (high-occupancy toll lane), MPO (metropolitan planning organization), STIP (statewide [or state] transportation improvement program), TIP (transporta- tion improvement program), and the preferred acronym for each state’s department of transportation. All data is assumed to be current as of July 2016 unless otherwise noted. 6 • A 50-State Review of State Legislatures and Departments of Transportation Table of Contents 1 | Introduction. ........................................................................................................ 9 Project Overview. ....................................................................................................... 9 Methodology ........................................................................................................... 9 Report Organization. .................................................................................................. 12 2 | Participants in State Transportation Governance and Finance. .................................................... 13 State Legislatures ...................................................................................................... 13 State Departments of Transportation .................................................................................... 15 Other Stakeholders. .................................................................................................... 18 3 | Communication and Collaboration Between State Legislatures and DOTs. ....................................... 31 4 | State Transportation Governance .................................................................................. 34 Laws and Legislation ................................................................................................... 34 Legislative Proposals. .................................................................................................. 34 Advocacy and Lobbying. ............................................................................................... 35 Fiscal Notes and Policy Impact Statements for Legislative Use. ............................................................ 35 Legislative Oversight. .................................................................................................. 36 Legislative Committees ................................................................................................ 36 Leadership Appointments and Removals ................................................................................ 41 Legislative Review of Administrative Rules and Regulations. ............................................................. 44 Legislative Audits and Sunset Reviews .................................................................................. 45 Reporting Requirements ................................................................................................46 Legislative Roles in DOT Performance Management. .................................................................... 47 Other Legislative Oversight Mechanisms. ............................................................................... 47 Resources Provided to DOTs to Support Compliance with Oversight Requirements . ....................................... 47 5 | State Transportation Funding and Finance ...........................................................................48 Budgeting and Appropriations .......................................................................................... 52 State Budget Cycles and Processes ....................................................................................... 52 Allocation of Federal Revenues to State DOTs. .......................................................................... 53 Allocation of State Revenues to State DOTs ............................................................................. 54 Planning and Projects .................................................................................................. 56 State Revenue Sources. ................................................................................................. 57 Revenue Sources for Transportation Uses ................................................................................ 57 Restrictions on State Transportation Revenues and Funds. ................................................................ 66 Revenue Sources Prohibited in State Law. ............................................................................... 69 State Finance Mechanisms. ............................................................................................. 69 Finance Mechanisms for Transportation Uses. ........................................................................... 69 Restrictions on State Transportation Finance Mechanisms. ............................................................... 75 Finance Mechanisms Prohibited in State Law. ........................................................................... 75 Other State Funding and Finance Issues ................................................................................. 75 Retention and Expenditure of Excess Funds ............................................................................. 76 Movement of Funds Between Projects. .................................................................................. 76 Legislative Actions to Control DOT Costs .............................................................................. 76 State Involvement in Local Transportation Funding ...................................................................... 77 Allocation of State Transportation Revenues to Local Entities. ............................................................ 77 Authorization of Local Revenue Sources in State Law .................................................................... 78 6 | State Profiles........................................................................................................79 Transportation Governance and Finance • 7 References. .......................................................................................................... 537 Participants in State Transportation Governance and Finance ............................................................ 537 Transportation System Statistics ....................................................................................... 537 Transportation Governance. ........................................................................................... 538 Transportation Funding and Finance. .................................................................................. 539 Tables Table 1. Responding Organizations for the 2016 Survey Research. ........................................................ 10 Table 2. Names and Characteristics of State Legislatures. ................................................................. 13 Table 3. Categorization of States by Levels of Legislative Professionalization ............................................. 15 Table 4. Names and Characteristics of State DOTs. ........................................................................ 16 Table 5. Sizes of State DOTs in Full-Time Equivalents (FTEs). .......................................................... 18 Table 6. Major Stakeholders in Transportation Governance and Finance ...................................................19 Table 7. State Transportation Officials that Serve on the Governor’s Cabinet. ............................................. 20 Table 8. State Transportation Boards, Councils, and Commissions. ....................................................... 22 Table 9. Names and Types of Other State-Level Transportation Entities. ................................................. 23 Table 10. O ther State-Level Transportation Entities for Which a Secretary, Director, or Commissioner of Transportation Serves as a Member or on the Board Ex Officio. .............................. 26 Table 11. State Agencies that Perform DMV and Highway Patrol Functions. ............................................. 27 Table 12. S election of Respondents’ Views Concerning Communication and Collaboration between State Legislatures and DOTs ................................................................................... 31 Table 13. State Legislative Standing Committees with Jurisdiction over Transportation-Related Issues .................. 36 Table 14. Appointment of DOT Leaders . ................................................................................. 41 Table 15. Appointments to State Transportation Boards, Councils, and Commissions . ................................... 43 Table 16. Legislative Review of Administrative Rules ..................................................................... 45 Table 17. State DOTs That Are Subject to Legislative Audits or Sunset Reviews .......................................... 46 Table 18. Selection of Respondents’ Views Concerning State Approaches to Transportation Funding and Finance ....... 49 Table 19. State Budget Cycles . ............................................................................................ 53 Table 20. State Legislative Roles in Allocating Federal Transportation Revenues to State DOTs ......................... 54 Table 21. State Legislative Roles in Allocating State Transportation Revenues to State DOTs. ........................... 55 Table 22. Range of Legislative Roles in Transportation Planning and Capital Project Selection ........................... 57 Table 23. Revenue Sources Currently Used by States for Roads and Bridges. .............................................. 58 Table 24. State Fuel Tax Models. .......................................................................................... 64 Table 25. Dedications of State Fuel Taxes in State Law. .................................................................... 67 Table 26. Finance Mechanisms Currently Used by States for Roads and Bridges .......................................... 70 Table 27. States That Do Not Currently Use Bonds for Transportation Purposes. ......................................... 75 8 • A 50-State Review of State Legislatures and Departments of Transportation 1 | Introduction In the United States, state governments bear much of the responsibility for the transportation systems within their borders. States own and maintain transportation assets, plan and build new infrastructure, manage billions of Federal and state dollars each year, and collaborate with and support local governments. In recent years, states have faced greater challenges in meeting these obligations than ever before. Confronted with aging infrastructure, constrained resources, changing demographics, and growing demand, states have developed a remarkable array of approaches to providing transportation options that get people and goods to their destinations safely and effectively. This report is intended to serve as a comprehensive, up-to-date reference tool for state governments, as well as for other interest- ed stakeholders, about how all 50 states and the District of Columbia govern and pay for their transportation systems. It ad- dresses the institutional context for state-level transportation decision making, and explores how state legislatures and executive departments of transportation (DOTs)—the most active players in state-level transportation governance and finance—work together, and balance one another, in the development of transportation programs and policies. It also provides extensive in- formation about state transportation funding and finance, including how state transportation budgets and plans are developed, what revenue sources and finance mechanisms are currently in use, and the roles states play in local transportation funding. By providing a nationwide comparative analysis, the report illustrates the rich diversity of states’ efforts to serve the public good, despite challenging circumstances and within complex intergovernmental arrangements. Project Overview 2011 report of the same name This report is an updated and revised edition of the groundbreaking , which was published by AASHTO and the National Conference of State Legislatures. Since 2011, the legislative and political environment for trans- portation governance and finance has evolved nationally and in the states. New Federal laws have been enacted, and many states have made changes to how their transportation systems are managed and paid for. This edition integrates these developments, and also expands on the original effort by adding a number of topics of recent interest in the states, including DOTs’ relation- ships with other state entities and the authorization of local transportation revenues in state law. Further, substantial efforts have been made to clarify and enhance the information provided—for example, by identifying the specific transportation modes for which each revenue source or finance mechanism is used and by adding extensive statutory citations throughout the state profiles. Methodology To produce this edition, the material from the 2011 report was first thoroughly updated to reflect current law or practice and edited for clarity and comparability across states. The edited information was integrated into state-specific surveys, one on state DOTs and legislatures and one on transportation funding and finance, and e-mailed to DOT personnel and legislative staff in all 50 states and the District of Columbia to be confirmed or corrected. Each survey also included open-ended questions on new topics of interest and a confidential section on recommendations and lessons learned. Responses were received for both surveys from all 51 jurisdictions, for a total of 132 completed surveys (see Table 1 for a full list of participating organizations). The survey information was then reviewed, compiled, analyzed, and re-edited into the draft state profiles, which were sent back to the sur- vey respondents for their review. This multi-stage process offered several opportunities for state experts to improve the accuracy and presentation of their states’ information in the final report. Transportation Governance and Finance • 9 Table 1. Responding Organizations for the 2016 Survey Research State Responding Organizations Alabama Legislative Reference Service, Alabama Legislature Alabama Department of Transportation Alaska Division of Legislative Finance, Alaska Legislature Legislative Research Services, Alaska Legislature Alaska Department of Transportation and Public Facilities Arizona Joint Legislative Budget Committee, Arizona Legislature House Research Staff, Arizona Legislature Arkansas Bureau of Legislative Research, Arkansas General Assembly Arkansas State Highway and Transportation Department Arkansas Governor’s Office [supplemental details only] California Legislative Analyst’s Office, California Legislature Colorado Colorado Legislative Council, Colorado General Assembly Colorado Department of Transportation Connecticut Office of Fiscal Analysis, Connecticut General Assembly Office of Legislative Research, Connecticut General Assembly Connecticut Department of Transportation Delaware Office of the Controller General, Delaware General Assembly Florida Florida Department of Transportation Georgia House Budget and Research Office, Georgia General Assembly Georgia Department of Transportation Hawaii Legislative Reference Bureau, Hawaii Legislature House Committee on Finance, Hawaii Legislature Hawaii Department of Transportation Idaho Legislative Services Office, Idaho Legislature Idaho Transportation Department Illinois Legislative Research Unit, Illinois General Assembly Illinois Department of Transportation Indiana Legislative Services Agency, Indiana General Assembly Indiana Department of Transportation Iowa Legislative Services Agency, Iowa General Assembly Kansas Kansas Legislative Research Department, Kansas Legislature Kansas Department of Transportation Kentucky Legislative Research Commission, Kentucky General Assembly Kentucky Transportation Cabinet Louisiana Senate Legislative Services, Louisiana Legislature Louisiana Department of Transportation and Development Maine Office of Fiscal and Program Review, Maine Legislature Office of Policy and Legal Analysis, Maine Legislature Maine Department of Transportation Maryland Department of Legislative Services, Maryland General Assembly Maryland Department of Transportation Massachusetts Massachusetts Department of Transportation Michigan House Fiscal Agency, Michigan Legislature Michigan Department of Transportation Minnesota House Fiscal Analysis Department, Minnesota Legislature Minnesota Department of Transportation Mississippi Legislative Budget Office, Mississippi Legislature Mississippi Department of Transportation 10 • A 50-State Review of State Legislatures and Departments of Transportation