Cover Story : Why the stimulus won’t be enough for Maine
While transportation experts in Maine are grateful for the recent stimulus funding passed by the U.S. Congress, the real work ahead is finding long-term solutions to Maine’s ‘billion dollar’ problems
By Douglas Rooks
Construction and paving crews will be busy this summer on I-295 northbound between Gardiner and Brunswick. That’s where the state is rebuilding a crucial transportation link – one of Maine’s first and most visible signs of the federal stimulus spending proposed by the Obama administration and approved by Congress.
But the federal money, however welcome, is short-term and will not, by itself, fill the deep hole that constitutes Maine’s transportation infrastructure deficit, according to state transportation officials and many legislators. Even in the first year of the stimulus, MaineDOT shows the capital program falling short of anticipated needs, and the gap widens each of the years after that.
“I’ve been telling anyone who will listen that our problem, particularly for roads and bridges, is not in the tens of millions or even the hundreds of millions of dollars,” said Senator Dennis Damon (D-Hancock County), veteran co-chair of the Transportation Committee. “It’s in the billions.”
Over the next decade, MaineDOT shows a $3 billion shortfall in the capital program, as escalating needs for replacing infrastructure meets a rapidly worsening outlook for Highway Fund revenues.
How bad is it? Well, according to figures presented in April to the Transportation Committee by MaineDOT Deputy Commissioner Bruce Van Note, the annual fuel tax adjustment for inflation in July will be just .2 cents per gallon. That’s by far the lowest increase since the legislature adopted indexing in 2002 and it was implemented the following year. The following year the index is projected to decrease by 1.3 cents for gasoline and 1.4 cents for diesel, representing an overall reversal of consumer prices, something not seen since such economic records have been kept. The figure will be subject to review next February, however.
While adding he doesn’t want to be alarmist, Senator Damon said that, for the first time, his committee has been hearing presentations about decommissioning roads and bridges. “We’d be taking out the bridges, and letting the roads return to dirt. Those are the kinds of choices we would have to be making.”
Damon said the General Fund shortfall has been occupying most of the legislature’s time and attention this spring – and was still unresolved during May – but he worries in some ways more about the transportation deficits.
The state had been funding its capital program for highways and bridges at less than $600 million per biennium, a level that was producing steep increases, particularly, in the number of substandard bridges. Lawmakers decided last year to boost transportation spending, and made a number of provisions to sequester tax revenues and registration fees and borrow through revenue bonds to meet those needs.
Identified budget needs for the current biennium are $914 million. With $130 million in stimulus funding, the state comes within $63 million of meeting that goal, according to MaineDOT figures. But in the 2010-2011 biennium that begins this July, the unmet needs – based on current funding projections – balloon to $300 million and continue to grow after that.
The federal stimulus money was certainly welcome, but was substantially less than transportation officials had hoped for. As one of them put it, “You have a much different project list when you’re receiving $130 million instead of $1 billion.”
Maine roads and bridges are not the only piece of the state’s transportation network to be at risk by lack of funding. The state’s ports and rail networks are also in need of upgrades and modernization, and there are few traditional prospects for funding of these public assets. Several groups in Maine are hoping to win money for port and rail projects in the upcoming round of discretionary funding that is part of the stimulus legislation passed in February. Even so, it would only be the beginning.
“Anybody who thinks the stimulus funding will solve our problems is wrong,” said Chris Gardner, director of the Eastport Port Authority. “It’s simply the beginning of getting Maine better connected and better able to compete in the global market.”
Advocates for freight and passenger rail and expansion of Maine’s three ports, are trying to lay the groundwork for increasing use of these modes – by strategic investments of stimulus monies – even while making the case for further post-stimulus investment.
The most visible signs of the possible extension of Amtrak service north of Portland to Bangor now comes in the form of new train station developments in Freeport and Brunswick. But planning and funding continues for the extension that would connect to existing seasonal passenger service being offered by Maine Eastern Railroad from Brunswick to Rockland. Still to be worked out, however, are matters such as possibly replacing the existing federal subsidy for the Portland to Boston run, which now makes five trips daily and is showing increased ridership.
Nate Moulton, who oversees freight rail matters for MaineDOT, says there’s also substantial interest in the old Mountain Division line, which runs from Portland, up through Standish and Windham, to the New Hampshire border. Now state owned, the line could reach a substantial number of freight shippers, according to a recent marketing study. But rail funding for Maine did not figure in the first round of “shovel ready” stimulus funding. Whether it is included next year depends on the results of competitive applications that are now due in November.
Gardner, who is also chair of the Washington County commissioners, believes that there’s also an urgent need to begin extending freight rail service to the port.
The port authority has authorized preliminary engineering that would rehabilitate an existing line and rights-of-way to bring rail to an intermodal center in Perry, about seven miles from the port operation at Estes Head. Ideally, a direct connection to Eastport would follow, but this would involve building expensive trestles and require permitting outside existing rights of way.
Bringing track to Perry would cut the distance from the port to a railhead from more than 20 miles to seven. Gardner said that’s a big deal. “It’s a big piece in making the economics work.”
Local leaders are hoping the project will qualify for some of the discretionary stimulus funding. Estimates are it will cost $25-$30 million, at the low end of the range for “regionally significant projects that can vary from $20-$300 million,” said Gardner.
He says he has no doubt about the regional significance of boosting port operations. Nate Moulton said that while MaineDOT is still reviewing possible applications for the competitive round of stimulus funds, he expects the Eastport rail plan to be among them. “It’s probably better to concentrate on a few projects that will score high in the rankings than to just send in a list of possibilities,” he said.
The temporary shutdown of the Domtar mill in Baileyville has, for now, eliminated Eastport’s biggest and nearly sole export customer. Up until then, Eastport had been seeing record tonnage of pulp exports.
“It shows the dangers of being dependent on any one industry, and any one customer,” Gardner said. “We need to diversify, and we need to be able to import as well as export.”
To do that, he hopes Eastport will be able to obtain state funding in a projected November transportation bond for an automated bulk handling system projected to cost $3-$5 million. “Looking at all our competitors, bulk cargo is where we may be able to find a niche,” he said.
The alternatives are not promising. If the Domtar shutdown became permanent, for instance, Gardiner said, it could drive Washington County’s unemployment rate to 25 percent, more than double the existing level. “It is scary to think about losing the area’s biggest employer,” he said. “If any place can make a good argument for stimulus funding, it’s Washington County.”
The end of pulp shipments in May happened to coincide with the first imports Eastport has had in a long time – giant windmill blades destined for projects around Maine. But no one knows yet how substantial that business might be long-term.
For skeptics who say that eastern Washington County once had rail service and lost it, showing a lack of economic need, Gardner said that the facts indicate otherwise. “There was never rail and a port operating at the same time here,” he said. “The rail lines shut down before the port came on line. Everything we see now shows us that ports with rail connections are going to be a lot more competitive.”
Senator Damon said that while he’s well aware of all the bleak scenarios, he doesn’t subscribe to the thinking that they’re inevitable.
“If we’re serious about moving Maine forward, we have to recognize that our past success has been built on our infrastructure,” he said. “One way or the other, we’re going to have to take this on.”
While the future may seem cloudy at the moment, Damon said that the state has rallied before and can again: “Somehow I don’t quite see us returning to the horse and buggy.”
At a glance: Maine’s unmet needs
Even with $130 million in stimulus funding, the state will see a sharp drop in highway investments – and a quickening deterioration of services
Earlier this year, MaineDOT released its Two Year Work Plan for FY 2010-2011. The work plan outlines highway and bridge projects totaling $809 million, a level of funding advocates say is woefully inadequate.
“We are getting to a point where the deterioration of our highways is going to accelerate rapidly if we don’t do something about it,” said Maria Fuentes, MBTA executive director.
These charts, provided by MaineDOT, tell a story of decline:
- 26 percent drop in overall capital investments in highways and bridges (Chart A);
- 60 percent decline in funding for highway construction (this represents a 77 percent decrease in the miles of highway that will be rebuilt) (Chart B);
- 38 percent decrease in funding for highway rehabilitation (that means a 62 percent decrease in highway miles rehabilitated) (Chart C); and
- 18 percent decline in dollars spent on surface treatments (represents a 10 percent decrease in miles resurfaced) (Chart D).
Just weeks after MaineDOT released its two-year plan, the Maine Revenue Forecasting Commission issued its revised revenue projections for the Highway Fund, and the outlook grew bleaker. Falling fuel tax and fee revenues promise to create an estimated $59 million hole in MaineDOT’s maintenance program over the next three years.
The most heartening development is a 22 percent increase in funding for bridge maintenance (Chart F). That is thanks to a special bridge funding measure championed by Governor Baldacci and the MBTA and passed by the Maine Legislature in 2008 (LD 2313: “An Act to Keep Our Bridges Safe”). That measure increases the number of bridges MaineDOT will repair or replace by 42 during the 2010-2011 funding cycle.
Said Fuentes, “It shows us what can be done when the public and legislators recognize the dire consequences of underfunding and take steps to do something about it.”