Last spring, the Ohio General Assembly gave the greenlight to a $1.5 million feasibility study to investigate ways to site and fund a new interstate highway designed to connect Toledo to the Ohio River through Columbus. Greater Ohio Policy Center was one of the only groups to testify against the proposed study which was buried in the state transportation budget.
Yes, the feasibility study costs a mere $1.5 million dollars, but is this infrastructure investment necessary and needed in Ohio?
Proponents of the study argue that developing a highway is necessary to unlock untold economic potential in the region. One of the many stories that came out last week calling attention to this study summarized the project as “examining ways to put underdeveloped parts of the state on the road to prosperity by constructing a new interstate highway.”
What makes people believe that highways equal economic prosperity? It’s an argument that predates the Interstate Highway System. Every two year during the debate on the transportation budget, it is hailed as “the biggest jobs creator in the state.” There is no question that highway construction creates jobs, but what about the finished product?
History shows that the economic benefits of highways are at best limited, and more often than not are simple transfers of wealth from one region to another. It is more likely that jobs will be created in the region where growth is already taking place, with the motorway being viewed as making communing easier. And when it doesn’t, due to the creation of more traffic, we get the second oldest myth about highways – “just one more lane will fix it.”
This has been the proven result of highway development for the past 70 years. Development of the Interstate Highway System transferred jobs and residents out of our big cities and shipped them off to the suburbs, taking substantial wealth and investment. We’ve spent decades trying to lure people back into our job centers while at the same time building bigger and bigger highways to support all the increased traffic.
Thirty years ago, Ohio studies this very same proposal – developing I-73 through Ohio to connect the Upper Peninsula of Michigan with Myrtle Beach, South Carolina. The proposal went nowhere due to strong public opposition as well as financial concerns.
Economic development projects like Intel outside of Columbus have spurred discussion around Ohio about ways the entire state can benefit from this regional economic development project. Much of the discussion centers around ways to improve connections between Toledo and Columbus due to the unreliability of traffic back-ups on U.S. 23 in Delaware County. The state is already investing in improving travel times there (the aforementioned one more lane). And while it remains to be seen if the promise of Intel actually materializes, should we build the highway now and hope that they will come?
And how do we pay for this new promised road to prosperity?
ODOT has already estimated that the upgrading of U.S. 23 north of Columbus in hilly terrain will cost about $85 million per mile when including numerous new interchanges and ancillary work. A decade ago, the 16 mile, four-lane rural Portsmouth Bypass (State Route 823) averaged $26.8 million per mile to complete in 2015 dollars. Adjusted for inflation, that would likely cost about $50 million per mile today.
We can therefore conservatively estimate that this proposed roadway, just the Ohio leg of about 275 miles, could cost anywhere between $13.75 to $21.95 billion to complete.
The entire ODOT budget for fiscal year 2024 was $3.9 billion. The state can’t use unclaimed funds to make up that much of the difference.
The largest sources of funding for the ODOT budget come from the state and federal motor fuel tax (MFT). Since 2019, Ohio has charged $0.385 per gallon for gasoline and $0.47 per gallon for diesel fuel. That provides annual revenue of approximately $2.6 billion (in 2024). When it was increased six years ago, it was estimated that the new rate would generate $865 million per year in new revenue to help the state keep-up with ongoing maintenance.
Yet, increases in fuel efficiency, along with increasing use of hybrid and all-electric vehicles, has led to a projection that Ohio will see declines in MFT collection as high as $877 million by 2040.
And federal revenue – the federal MFT has been set at $0.184 per gallon since 1993 for gasoline and $0.244 per gallon for diesel. Due to inflation, purchasing power of the federal MFT is equivalent to just 8.7 cents per gallon in current dollars. A failure of leadership at the federal level has resulted in the federal Highway Trust Fund running annual deficits as spending cannot keep up with revenue. As a result, transfers from the U.S. Treasury general fund have made up for the difference between revenue and spending.
By 2034, the Highway Trust Fund is expected to run an annual deficit of $279 billion, according to the nonpartisan Congressional Budget Office. Federal funding won’t be guaranteed and then will likely only come IF the state commits to funding the project first.
Ohio is already investing $2.1 billion annually just to maintain the 42,000 lane miles of road on the state highway system, about 50 percent of the revenue ODOT receives on an annual basis. All that spending merits us a D+ on our existing road conditions according to the American Society for Civil Engineers (ASCE).
This was the reason why GOPC argued against funding yet another feasibility study. $1.5 million is pocket change compared to the $13-22 billion price tag of a new highway, but is this infrastructure project necessary when Ohio barley has a passing grade on our existing roadway infrastructure?
We want to see every region, every community in Ohio, have the opportunity to spur new economic growth and revitalization. Southern Ohio, particularly this corridor between Columbus and the Ohio River, has been among the most overlooked for decades. But a new highway is not the answer.
Better for Ohio to identify ways to maintain what we already have before we start worrying about ways to pay for things we don’t really need.