A component of FY2012 local aid is fast approaching final consensus. Chapter 90 funding for the coming fiscal year is likely to be increased by 29%, which will provide a modest additional amount for each of my communities. The likely amounts (subject to final adjustments) are as follows:
The state provides funding to cities and towns to support road construction through Chapter 90. Chapter 90 has recently been funded by bond bills.
Today, the House Committee on Bonding and Capital Expenditures (on which I sit) heard testimony on giving the Governor authority to borrow an additional $250 million in to support Chapter 90 funding in FY12. We are currently at the tail end of a previous three-year authorization which is substantially exhausted. There is a good chance that the legislature will put the authorization on the Governor’s desk this week in time for notice to go out April 1. This timing will support the construction planning process for the coming season.
The administration has stated its clear intention to use $200 million of the $250 million bonding authorization in the coming fiscal year. The administration does not have to issue bonds that the legislature has authorized. The administration limits bond issuance in accordance with its capital plan which is, in turn, based on a debt affordability policy. Our committee intends additional review of that policy over the coming months, but right now, there seems to be consensus that it is responsible.
There has been some question as to how much we will authorize. Regardless of whether we authorize $250 million — the amount requested by the Transportation Committee and approved by our Committee, $50 million above what the Governor asked — the administration has made clear that it will issue only $200 million. This represents a 29% increase above the $155 million that has been authorized in each of the past few fiscal years. The estimated numbers in the table above are based on a $200 million allocation.
Chapter 90 funds are distributed in accordance with a formula weighted 58% on road miles, 21% on employment and 21% on population. Subject to some variations due to new population and employment numbers, the Governor’s January estimates, as distributed by the MMA and shown in the table above, should be pretty close to correct.
One of the issues in the hearing was whether the bill should earmark a portion of the funds for “Complete Streets” work. While many of us on the committee are passionate about pedestrian and cyclist safety, it did not seem practical to include this earmark in the bond bill — there has been no thought as to how allocate funds particularly for those purposes. It was agreed that the committee would actively consider how to better support Complete Streets in a future bill. Nothing prohibits communities from using the funds for those purposes in the current bill — the question was only whether to mandate some portion of the funds to be used in that way.