When it was first developed, the Long-Range Transportation Plan applied no fiscal constraints to the process. When it sought public opinion, MoDOT did not ask citizens to base their expectations on costs. The department asked for their opinions on what the state’s transportation priorities should be and asked them to rank the priorities. MoDOT used the results of the public input processes and engineering principles to determine the system needs. The department also identified the existing gap between the current investment level and what it would take to fund all the needs. The gap is enormous. While the needs are real, MoDOT realizes the level of funding sufficient to meet all transportation expectations probably never will be reached. Establishing goals that move toward meeting these expectations is a more reasonable approach. For example, Missourians told MoDOT they would like 12-foot lanes, wider shoulders and smoother pavement on the collector routes. Collector routes normally carry local traffic. Most lettered routes are collectors. The estimated cost to upgrade all collectors to this condition was $4.1 billion. Although these roads make up 72 percent of the state highway system, they carry only 18 percent of the traffic. With the limited resources available, upgrading these roads is not a high priority. Most funds will be devoted to the National Highway System (NHS) and remaining arterial roads. The collectors for the most part will be maintained at current levels. The National Highway System includes roadways considered to be of state and national significance. It consists of all interstate routes and other major highways. Arterials generally carry traffic to destinations within the state or serve as connectors to the NHS. Remaining arterials are those not included in the NHS. While all modes of transportation have needs that cannot be met with existing funding, highways and bridges, passenger rail and bus service between cities, and public transportation have the costliest needs. Establishing priorities among each mode’s needs allows MoDOT to meet the most important needs first. Highway and bridge investments will concentrate on the NHS and remaining arterials and establish goals for the entire highway and bridge system. The state’s most important passenger rail needs can be met by implementing the Midwest Regional Rail Initiative on existing rail tracks with modifications between St. Louis and Kansas City. Missourians consistently rated public transportation as a high-priority need. Trying to meet 90 percent of the established needs will bring significant improvements in urban and rural areas. The changing economy affects the costs in the Long-Range Transportation Direction and what improvements Missourians can expect in their transportation system. It is difficult to predict economic changes for a long period of time. The Long-Range Transportation Direction, for example, uses a 20-year timeframe. The longer the time between when a project’s cost is established and when that project begins, the more uncertain the cost projection becomes. The uncertainty is greatest for projects that are anticipated more than five years in the future. When, for example, this document’s development started in 1999, the economy was robust. Since then, economic conditions have changed, resulting in less money available through the department’s usual funding sources. These types of changes, along with possible upcoming changes to federal laws governing transportation funding, may affect transportation revenue. It is impossible to predict with certainty what new funding levels and/or restrictions might someday be applied. MoDOT assumes costs of projects in all modes of transportation will grow at approximately 3 percent per year in the first five years. Beyond five years, the average growth and inflation factor is assumed to be 4.5 percent annually. These estimates are based on a combination of historical data and the best practices of other states. These cost increases have a dramatic impact on the gap between existing resources and transportation needs. This gap right now is more than $1 billion a year for 20 years. This figure is not adjusted for inflation or growing project costs over time. When those factors are calculated, the resulting gap almost doubles, climbing to $2 billion a year. Chart 1 is an example of how variations in revenues and needs can affect the funding gap. It shows the gap between highway and bridge anticipated revenues and estimated needs for the next 10 years. As MoDOT’s revenues decline, it is clear the gap will continue to widen over time. The declining revenue reflects several factors. It shows the steep drop-off in 2004 when MoDOT no longer is using bond money to finance projects and is repaying the existing bond debt using program funds. It shows another drop-off in 2008 when the 1992 six-cent gas tax is eliminated. At the same time, assuming the project growth and inflation factors discussed above, the needs continue to increase, resulting in an ever-growing gap.