Inflation leads to higher costs: The cost of maintaining and expanding Idaho’s transportation system to meet the unprecedented growth continues to escalate – at a rate that exceeds available resources. The price of concrete, steel, asphalt and petroleum increased an average of 14 percent in 2006; the previous year costs increased an average of 11 percent. The price of fuel – gasoline and diesel – increased 34 percent from August 2005 to August 2006.

During a two-year period, the cost of concrete for bridges in northern Idaho increased by 163 percent, from $298 per cubic yard on the South Fork Palouse River Bridge in 2003 to $784 per cubic yard on the Lower Moyie Bridge in 2005. Asphalt for a segment of Interstate-84 near Boise cost $152 per ton; in 2006, the cost increased to $450 per ton for a segment near Caldwell, a 196 percent overall increase. Aggregate for a highway base in Cassia County cost $7.07 per ton in 2003; two years later it cost $14.32 per ton for a project in Twin Falls.

Those increases impact department budgets and services to Idaho motorists, such as snow removal and treatment, spring and summer maintenance activities and other related operations. Rising petroleum costs contribute to increased prices of herbicides and pesticides, pavement markers and oil for operating equipment.

Operational costs are rising: Perhaps less visible to motorists, but just as pronounced in the budget dilemma are the rapidly escalating costs of conducting normal business operations, from salaries to supplies and services. The costs of fuel and highway materials are projected to increase 202 percent between 2000 and 2008. During the same period, the cost of providing health insurance for employees is expected to rise 151 percent, salaries and benefits will climb approximately 79 percent, technology costs will increase 43 percent and utilities will go up 29 percent.

Why is tremendous growth statewide not generating more revenue?

Vehicles have made increasing gains in fuel efficiency. This trend will continue as hybrid and alternative energy vehicles become more popular. The most popular vehicle in Idaho is the Ford F150 truck. It gets 18 miles per gallon. But the most popular passenger car is the Toyota Camry. It gets 30-34 miles per gallon.

ITD recognizes that these trends are good for Idaho and support the country's goal of energy independence. But at the same time vehicles are getting better gas mileage, more vehicles are using the state's highways.

Growth-demand gap widens: More drivers and more vehicles use Idaho’s transportation department than ever before. Yet, there has been no corresponding growth in state resources to operate the system. Growth simply is not paying for demand.

Since 1978, Idaho has experienced a 94 percent increase in the annual vehicle miles traveled. Yet, fuel consumption – the largest source of state revenue – increased just 49 percent. The rate of fuel consumption is growing at approximately half the rate of vehicle miles traveled the past 28 years.

Gallons of fuel taxed increased 50 percent, largely due to an increase in diesel, but the growth in gallons taxed for cars increased only 20 percent.

Construction costs are soaring

While ITD's revenue is flat and internal costs continue to climb, construction costs are soaring. An AGC analysis shows the cumulative change in highway construction material from September 2003 to September 2006 was 35.9 percent, nearly four times the rate of inflation.