Calling for a new dialogue on how best to determine Ohio’s transportation priorities and identify the fairest ways to finance them, the Ohio Department of Transportation (ODOT) unveiled its 2008-2009 Business Plan Nov. 27, highlighting a commitment to fully fund the preservation of Ohio’s current highways and bridges, and create a statewide 21st Century Transportation Priorities Task Force to identify priority transportation improvements and innovative new ways to finance them.
The ODOT Business Plan, required every two years under Ohio law, also details the department’s new mission which emphasizes a multi-modal approach to modernizing the state’s transportation system.
“Ohio cannot simply build its way out of congestion. We must fully embrace a multi-modal approach – with an integrated network of highway, rail, transit, aviation and waterway,” said Director James Beasley. “Our transportation infrastructure also contributes to job creation, so we must broaden our criteria for project selection to better understand the impacts to economic development and urban revitalization.”
Also used as a forecasting tool, the ODOT 2008-2009 Business Plan gives the department and its transportation partners a better perspective on the state’s long-term capital improvement program. ODOT must plan six to seven years ahead, as transportation projects take years to plan and tens-to-hundreds of millions of dollars to build.
The plan also describes how ODOT must contend with several key challenges, including the devastating impact of construction cost inflation on ODOT’s purchasing power and the flattening of state revenues.
“Over the past four years, ODOT’s construction costs have seen a compounded inflation increase of nearly 41 percent,” said Beasley, pointing to hyper-inflation caused by the rising cost of oil, increased demand for raw materials in the global economy, and lingering effects of Hurricanes Katrina and Rita.
“As inflation has been driving construction costs up, the state revenues to pay for it have been flattening. Revenues from the state motor fuel tax have been leveling over the past three years, due in large part to the escalation of fuel prices, a slow-to-no growth in Ohio’s population, and the availability of more fuel efficient vehicles,” continued Beasley.
Another key challenge is an over-commitment by the department to major new construction projects in 2006 — at 47 percent above funding levels — and a planned shortfall of more than a billion dollars in the department’s roadway and bridge preservation programs. When combined, the cumulative effects of high construction cost inflation, flat state revenue and budget adjustments needed for past program decisions create a shortfall of $3.5 billion using financial forecasts projected for the department through 2015, starting with an estimated $114 million shortfall in major new construction in 2009.
“In these difficult financial times, we must be good stewards of the public trust and adjust the department’s financial outlook to match realistic trends in revenue and construction costs,” said Beasley. “It is also important to have reliable and realistic project scope and cost information prior to the advancement of major new construction projects. ODOT will simplify its financial forecast and TRAC estimates to one, ’clear-to-understand’ page.”
ODOT will assemble a statewide Ohio 21st Century Transportation Priorities Task Force to lead a frank discussion on how best to position Ohio’s transportation spending to balance the movement of people and freight, promote safety and reduce congestion, create jobs, encourage responsible growth and help build sustainable communities. As the Task Force determines these priorities, it also will be asked to identify the fairest ways to finance them, including the identification of new tools for state and local governments to partner with the private sector.
Other highlights of the 2008-2009 Business Plan include the implementation of newer technologies to improve traffic flow and make the state’s current transportation system work “smarter.” Low-cost signal upgrades and coordination, remote traffic monitoring and enhanced online applications for travel information are examples.
ODOT also commits to working toward a “better than before” environmental policy, by improving efforts to recycle or “re-use” products and materials at ODOT facilities and promote purchasing and use of recyclable, environmentally-cleaner products in construction and maintenance projects.
A full copy of ODOT’s 2008-2009 Business Plan can be found online at www.dot.state.oh.us.
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