Inflation has taken a big bite out of what Oklahoma can build on its roads and bridges, and the state's top transportation official told lawmakers Thursday that the gap is growing.
Transportation Secretary Tim Gatz told a legislative panel that the state is about $255 million a year short of what it needs to keep its highway system in its current condition, Oklahoma Voice reported. In what could be one of his last addresses to lawmakers before he leaves the Oklahoma Department of Transportation, Gatz warned, "We are going to start to see more of the deterioration we have seen in the past."
For the road builders, bridge crews and suppliers who do that work, the message was clear: costs are up, and funding hasn't kept pace.
Costs climbing faster than groceries
Gatz said the highway construction cost index has risen as much as 18% in one year. "The reduction that causes in your buying power is something that has already knocked us to our knees," he said, according to Oklahoma Voice.
He said highway construction inflation runs significantly higher than the price of a loaf of bread, because it reflects labor, materials and many other factors.
His clearest example: in 2021, $245 million would build 100 miles of two-lane road with shoulders. Today, the same money would cover only 65 miles. Gatz called 2021 an inflection point, saying the state saw inflation in 2021 and 2022 like it had never experienced.
Progress at risk
Gatz pointed to real gains in recent years. Oklahoma cut its backlog of structurally deficient bridges from about 1,200 to about 35, which he credited to a legislative commitment. The state also moved from about 24th or 25th in pavement condition to 16th or 17th, he said.
But the work isn't done. Gatz said Oklahoma has 1,100 highway bridges that are 80 years old and need attention.
"It's going to be hard for us to catch up with that kind of deterioration in our infrastructure with flat funding and the longer you wait, the more it costs," he said.
The budget picture
For fiscal year 2027, ODOT's appropriation was about $837 million, Gatz said. Certain commitments, including a $3 million allocation for a new state plane, brought that down to about $778 million.
The state's eight-year construction program costs about $7.3 billion, or less than $1 billion a year. About 60% of that comes from federal highway dollars, which Gatz said face some uncertainty.
Turnpikes face the same pressure
The Oklahoma Turnpike Authority is in the same boat, chief engineer Trent January told the panel. The authority is in the middle of an $8.2 billion turnpike improvement and expansion program financed by bonds that are paid off with tolls, and inflation has pushed the price up, according to Oklahoma Voice.
January said the authority also needs to reconstruct 311 miles of its system that aren't part of the expansion program, at a cost of $1.9 billion in today's dollars.
Looking for new money
Gatz walked lawmakers through options other states are using. Twenty-six states index motor fuel taxes to inflation or construction costs, he said, though he called that a difficult subject with gas and diesel prices where they are. Other states are looking at delivery fees on online orders, managed toll lanes and per-mile road user charges. "We're not ready for that yet," he said of road user charges.
Oklahoma's gas tax is 20 cents a gallon, one of the lowest in the nation, Gatz said.
"We've got to diversify our funding," he said. "I promise you, there is no magic bullet that is going to come in and address it."
Why it matters for contractors
When an agency's buying power drops by about a third, as Gatz's 100-miles-to-65 example shows, fewer miles get let to contract. Oklahoma's heavy civil contractors, asphalt and concrete suppliers and bridge crews should expect flat state funding to mean tighter lettings unless lawmakers find new revenue.
There's still a lot of work on the books. The eight-year program runs about $7.3 billion, the turnpike program is $8.2 billion, and the turnpike authority has another 311 miles needing reconstruction. Those 1,100 aging bridges also aren't going away. Contractors should watch the coming legislative session closely, since any move on fuel tax indexing or other new revenue would directly shape how much road and bridge work Oklahoma can afford to buy.