Under Governor Haslam, Tennessee Department of Transportation ‘Overhead’ Costs Have Grown 63 Percent, While ‘Highway Infrastructure’ Spending Has Shrunk By 33 Percent

The Tennessee Department of Transportation (TDOT) total costs for “Administration” plus “Headquarters Operation,” what would be considered “overhead” in the business world, have grown by 63 percent, from $78.9 to $117 million, in the seven years between Gov. Haslam’s first budget in FY 2011-12 and his  proposed budget for FY 2017-18.

While TDOTs overhead has skyrocketed, spending on one of the main Programs for road improvements, “Highway Infrastructure,” has gone down by more than 30 percent in that same time period.

Table 1 provides the details of TDOT’s “Recommended Budget By Program and Funding Source” obtained from multiple years of budget documents and includes the links to the source documents and the page references.

The table demonstrates that since fiscal year 2010-11, the last year of Governor Bredesen’s administration, there are multiple Programs, including Administration, Headquarters Operation, State Industrial Access, Planning and Research, Interstate System and Highway Infrastructure and TDOT as a whole, for which the funding was reduced by Gov. Haslam’s in his first year and have never recovered.

Table 1
Department of Transportation
Recommended Budget by Program
	Source	Source	Source	Source	Source
	Sheet 46 of 656	Sheet 46 of 550	Sheet 46 of 558	Sheet 47 of 558	Sheet 48 of 558
	Page A-14	Page A-14	Page A-14	Page A-15	Page A-16
	2011-2012	2014-2015	2015-2016	2016-2017	2017-2018
Administration	$  52,408,200	$ 60,187,600	$  63,533,700	$   80,149,900	$   82,636,000
Headquarters Operation	$   19,283,400	$ 18,955,600	$  21,762,900	$   31,706,800	$   34,203,300
Field Operations	$   49,503,100	$ 58,577,000	$  61,669,100	$   63,090,200	$   68,217,900
Flight Services	$   –	$   1,944,500	$    2,072,900	$   –	$    –
Garage and Fleet Operations	$  20,824,000	$   4,241,700	$   11,352,600	$   36,112,500	$    37,963,500
Capital Improvements	$    3,085,400	$   1,102,100	$    1,827,800	$  –	$   –
Highway System Maintenance	$  266,996,600	$283,866,200	$  279,195,800	$  306,323,900	$  306,323,900
STATE-FUNDED PROGRAMS
Betterments	$    9,470,000	$   3,931,900	$    4,211,300	$      800,000	$        800,000
State Aid	$  25,797,700	$  28,113,800	$  44,853,800	$   30,622,000	$  30,622,000
State Industrial Access	$   13,694,500	$  30,596,900	$  25,595,600	$   30,000,000	$  35,000,000
Local Interstate Connectors	$     5,487,000	$    4,537,000	$    1,912,600	$     2,000,000	$     2,000,000
Sub-Total State-Funded Programs	$  54,449,200	$  67,179,600	$  76,573,300	$   63,422,000	$  68,422,000
FEDERALLY FUNDED PROGRAMS
Planning and Research	$      5,215,000	$   4,095,200	$   3,459,000	$    6,571,000	$     6,561,000
Interstate System	$      6,087,800	$   2,945,200	$       735,300	$  18,200,000	$   18,110,000
Forest Highways	$  –	$ –	$   –	$        200,000	$  –
Highway Infrastructure	$ 242,608,600	$  176,827,100	$134,824,200	$ 150,844,700	$  441,698,500
Bridge Replacement	$   68,511,800	$ 12,625,900	$   –	$   –	$  –
Transit	$   31,320,500	$  41,370,400	$ 36,821,000	$  49,735,000	$    50,548,900
Air, Water, and Rail	$   46,592,700	$ 58,301,700	$ 46,818,000	$   38,200,000	$    22,600,000
Sub-Total Federally Funded Programs	$ 400,336,400	$296,165,500	$ 222,657,500	$ 263,750,700	$  539,518,400
TOTAL APPROPRIATIONS	$ 866,886,300	$792,219,800	$  740,645,600	$ 844,556,000	$1,137,285,000
STATE FUNDING SOURCES 2017-18
Highway User Taxes					$ 722,500,000
2017 IMPROVE Act Legislation					$ 278,570,000
Sales Tax-Transportation Equity Fund					$   22,600,000
Fund Balance and Reserves					$   12,000,000
Miscellaneous Revenue					$   21,615,000
Bond Authorization					$   80,000,000
TOTAL STATE FUNDING SOURCES

Referencing just a single section of the budget and compiling it in a table does not tell the whole story.

In January of each year, the sitting Governor proposes a budget for the upcoming fiscal year which runs July 1 through June 30.  Included in the budget document, which has averaged just under 600 pages since 2011-12, is how the current fiscal year is “estimated” to finish as well as the “actual” revenues and expenditures for the prior fiscal year.

Within the Budget Overview section of the budget document, information about TDOT funding appears in two places:  Recommended Budget by Program and Funding Source and, a few pages later, Comparison of Programs.

Initially, the two pages contain the same funding totals.  But, as the data for each fiscal year moves through the three-year publication cycle, not only is the data changed from initial publication, the data no longer aligns between the two appearances in the budget document.

Taking the Total Appropriations line and adjusting it for how fiscal year 2016-17 is “estimated” to finish from the Comparison of Programs page (A-22, sheet 54 of 558), and reducing the Highway Infrastructure funding by the $278,570,000 revenues anticipated from the four state tax increases contained in the IMPROVE Act (gas, diesel, motor vehicle registration and rental car), Table 2 below tells quite a different story.

Table 2 – STATE APPROPRIATIONS TO TENNESSEE DEPARTMENT OF TRANSPORTATION
	2011-2012	2016-2017	2017-2018	2011-12 to 2017-18 Growth	2010-11 to 2017-18 Growth
State Appropriations WITH IMPROVE Act Funding	$866,886,300	$ 756,856,000	$ 1,137,285,000	31%	28%
State Appropriations LESS IMPROVE Act Funding	$866,886,300	$ 756,856,000	$  858,715,000	-1%	-3%

The two TDOT Programs directly tied to state road improvements are Highway System Maintenance and Highway Infrastructure.

Highway System Maintenance funding for 2017-18 is flat from 2016-17, showing no apparent impact from the additional revenues anticipated from the IMPROVE Act tax increases.

Highway Infrastructure, however, shows a significant increase in funding in 2017-18 over 2016-17.  Table 3 below shows year-over-year funding for and Highway Infrastructure, with and without the IMPROVE Act additional revenues, as well as Highway System Maintenance.

Table 3 – HIGHWAY INFRASTRUCTURE AND HIGHWAY SYSTEM MAINTENANCE
	2011-2012	2014-2015	2015-2016	2016-2017	2017-2018	2011-12 to 2017-18 Growth	2010-11 to 2017-18 Growth
Highway Infrastructure WITH IMPROVE Act Funding	$ 242,608,600	$176,827,100	$ 134,824,200	$ 150,844,700	$ 441,698,500	82%	60%
Highway Infrastructure WITHOUT IMPROVE Act Funding	$ 242,608,600	$176,827,100	$ 134,824,200	$ 150,844,700	$ 163,128,500	-33%	-41%
Highway System Maintenance	$ 266,996,600	$283,866,200	$ 279,195,800	$ 306,323,900	$ 306,323,900	15%	17%

Highway Infrastructure has been decimated under the Haslam administration, and Highway System Maintenance has seen modest growth.

Meanwhile TDOT overhead has increased steadily and disproportionately to actual road work, as Table 4 below shows:

Table 4 – TENNESSEE DEPARTMENT OF TRANSPORTATION OVERHEAD
	2011-2012	2015-2016	2016-2017	2017-2018	2011-12 to 2017-18 Growth	2010-11 to 2017-18 Growth
Administration	$   52,408,200	$ 63,533,700	$   80,149,900	$   82,636,000
Headquarters Operation	$   19,283,400	$  21,762,900	$   31,706,800	$   34,203,300
TOTAL	$   71,691,600	$ 85,296,600	$  111,856,700	$ 116,839,300	63%	48%

Without the benefit of the IMPROVE Act tax increases to the budget to compensate for the defunding of road projects, TDOT overhead has grown to represent 14 percent, up from 9 percent, while Highway Infrastructure represents just 19 percent, down from 28 percent under Governor Haslam.

NOTE: Links to Source documents referenced in Table 1.

2010-2011	2011-2012	2012-2013	2013-2014	2014-2015	2015-2016	2016-2017	2017-2018
Source	Source	Source	Source	Source	Source	Source	Source