DOVER, DE (AP) Lawmakers reconvening for this year’s General Assembly session will be looking to steer a new course for the state Department of Transportation (DelDOT).
One of the chief issues facing legislators is figuring out how to close a projected deficit of $2.7 billion over the next six years to fund road projects that already have been approved.
On top of that, Gov. Ruth Ann Minner must choose a replacement for Transportation Secretary Nathan Hayward III, who is stepping down Feb. 1 after being diagnosed with prostate cancer.
“I think anyone going in as a new secretary, they’re going to have their hands full,” said Senate President Pro Tem Thurman Adams, D-Bridgeville, whose chamber must decide whether to confirm Minner’s pick.
The state Department of Transportation announced last summer that it was putting $287 million worth of work on hold because it didn’t have the money to pay for the projects.
And in October, Hayward announced that he was scrapping the bid process for a proposed bridge over the Indian River Inlet in Sussex County after all but one of the pre-qualified bidders dropped out, and the remaining company submitted a bid at least $40 million higher than DelDOT’s estimate of $125 million. That estimate was for the bridge itself and did not include additional items such as road work and utilities that pushed the total to more than $200 million.
Hayward said Jan. 5 that officials have decided to draw up plans for a less costly bridge, similar to one that spans the Chesapeake and Delaware Canal in New Castle County.
“It will still be very expensive,” he warned.
The cash crunch at DelDOT has been building since the early 1990s, when lawmakers began forcing the agency to use fuel tax, fee and toll revenue meant for construction projects to help pay the agency’s operating expenses. The transportation trust fund began losing even more money in 2003 when the DelDOT assumed control of the Division of Motor Vehicles in a reorganization of the Department of Public Safety.
The diversion of transportation trust funds for operating expenses, currently $211 million annually, freed up general fund revenue for other spending programs and resulted in surpluses that provided the flexibility for tax cuts. At the same time, it made it more difficult for the agency to keep pace with the state’s growth and resulting demand for new and better roads, as well as increasing costs for construction material and labor.
Hayward noted that two of the most critical and expensive projects DelDOT faces — the Indian River bridge and realignment of the bottlenecked junction of Delaware 1 and Interstate 95 in New Castle County — were not even included in the agency’s six-year construction plan when he took office in 2001.
“You can blame me if you’d like for saying, ’Guess what? There’s a fire over there in the corner of the room and no one is paying attention to it,’ but that’s part of my job,” he said.
Sen. Robert Venables, D-Laurel, said approximately $2.3 billion in DelDOT operating costs has been drawn from the transportation trust fund over the years, an amount roughly equivalent to the six-year deficit the agency is facing.
“If you add in inflation, it would probably come out just right,” said Venables, who supported a proposal to shift DelDOT operating expenses back into the general fund.
“If we hadn’t done that … we might not be in the situation we are now,” said Venables, co-chairman of the legislature’s capital budget committee, which authorizes funding for road projects.
While some lawmakers have tried to blame Hayward for DelDOT’s financial problems, Venables said legislators must accept responsibility as well.
“There just wasn’t enough foresight on our part, I guess,” he said. “I can’t say it’s mismanagement. I don’t think they’re building anything they don’t need to build or building anything the legislators haven’t approved.”
A task force established to examine the department’s financial situation reported in November that the agency needs to come up with an estimated $2.7 billion over the next six years to meet currently scheduled projects.
The group listed several potential remedies, including raising tolls, taxes and fees; taking some projects off the books; increasing borrowing, and leasing toll roads to private interests, but it made no recommendations.
Minner’s chief of staff, Mark Brainard, said the governor has not made any decisions on the funding options but will present some ideas in her Jan. 26 budget address to the General Assembly.
“I don’t think we’re going to raise taxes; it’s an election year,” said Rep. Joseph DiPinto, R-Wilmington. “There’s no reason why we shouldn’t seriously consider raising fees.”
DiPinto, co-chairman of the Joint Finance Committee, said DelDOT’s problems represent the biggest challenge for lawmakers in the new session.
“It’s the largest issue; it’s the one that potentially involves the most money,” he said. “It’s the one that doesn’t have a clear answer to it.”
Hayward doesn’t believe DelDOT’s problems can be solved without serious consideration of leasing Delaware 1 and the state’s 11-mi. stretch of Interstate 95 to private interests. Leasing of those toll roads could result in the quick infusion of billions of dollars in cash, but lawmakers are worried about surrendering state control and the effect privatization could have on Delaware’s bond ratings.
“I believe Delaware’s transportation needs are so acute and so expensive that it’s going to take an unusual strategy to respond to them,” ,Hayward said.
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