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Federal Funds
MDOT has several sources of funds both state and federal. The Federal funds are mainly two different types. One is an annual allotment to the state, which amounts to approximately $200 to $300 million per year which goes directly to MDOT. MDOT then allocates these funds at its own discretion for the most part.
Secondly, the federal government periodically grants funds to states over a specified period of time, usually six years. Some of these funds may be earmarked to specified projects. For instance, some of the bridges in Jackson County were paid for with such funds. These type funds are usually referred to as “Pork.” In the latest bill just signed by the President in August 2005, Mississippi received $2.5 billion over six years. The United States Senators and Congressmen may have some influence over these funds, but the state legislature has none.
Gasoline Taxes and License Plates
The second major source of funds for MDOT is the state tax levied on gasoline, which was approved by the state legislature in 1987 and is commonly known as the 1987 Four Lane Program (1987 FLP). Originally, this was a $1.6 billion program passed for the purpose of building a network of four-lane highways throughout the state. The Program was to be completed in 2002. However, in 2001, the legislature learned that MDOT was at least three years behind in highway construction and needed at least at least several billion dollars more to complete the $1.6 billion program.
The gasoline tax raises approximately $300 million per year for the Program. The legislature has influence over this program in that the legislature set up the Program and obviously can take it away. However, MDOT has wide latitude on what it does with the funds and where and when it builds highways.
Casino Taxes
The third major source of funds is the Gaming Road Program (GRP). The purpose of the Program is to provide for the construction, re-construction, and general improvements of highways, roads, streets, bridges, interchanges, and other improvements within and approaching those counties where gaming is authorized. This program was originally passed in 1994 and was to run through 2002.
The GRP is funded by a tax on casinos. The 1997 legislature extended the tax through 2012 and authorized MDOT to issue bonds in the amount of $325 million to be paid back with the tax. At that time, the tax was producing approximately $50 million a year in income. $26 million per year was used for debt service bonds, leaving $10 million per year for other projects and the remainder of $14 million was used for statewide highway maintenance.
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