A New Transportation Look for the Show Me State

by John Schneidawind, vice president of public affairs, ARTBA 

Since becoming director of the Missouri Department of Transportation (MoDOT) in 2015, Patrick McKenna has put his deep financial expertise to full use. A graduate of Bentley College with a bachelor of science in Finance and a master of science in Management and Finance from the University of Maryland University College, McKenna presides over one of the nation’s largest state transportation budgets. The hallmark—a $2.8 billion project to expand I-70. But it wasn’t always that way.

McKenna’s background includes stints as the deputy commissioner of New Hampshire’s Transportation Department, 13 years in the Nation’s Capital serving as chief financial officer of the U.S. Senate, and a one-year term as president of the American Association of State Highway and Transportation Officials (AASHTO).

He sat down recently with ARTBA Vice President of Public Affairs John Schneidawind to discuss Missouri’s unique transportation climate, and how the Infrastructure Investment and Jobs Act (IIJA) is helping shape it.

Q: Can you give us an overview of the transportation landscape in Missouri?

A: In Missouri, the last time a significant initiative was passed for transportation revenue was in 1996. We literally had 30 years of deferred maintenance and a backlog of work and a condition deficit that was growing.

To give you a sense of what that was, I walked into an annual capital plan over a five-year basis of $325 million a year with the seventh-largest transportation network of roads and bridges in the country. Assets valued at about $160 billion, with $325 million a year to operate.

So, the real task at hand was to build public consensus. It’s very common to have concerns about the operating efficiency of a state DOT as a kind of red herring for avoiding revenue increases. We “right-sized” the department about 15 years ago, down by about 2,000 employees… But that wasn’t sufficient even to draw public consensus to increase revenues, and inflation was just eating our lunch. So, the plan I walked into was to abandon 26,000 miles out of 34,000 miles of roadway for maintenance on an estimated basis, and close between 150 to 200 bridges a year.

Q: How did you turn that around? How did the I-70 project finally get rolling?

A: Obviously I-70 was the first segment of the Eisenhower Interstate that was constructed here in Missouri—just west of St. Louis—and that hadn’t been modernized or upgraded since that time. We were patching it together, keeping it running, but a two-lane Interstate with heavy freight traffic led to really considerable concerns.

So, we started building the public outreach and created what we called the “Citizen’s Guide for Transportation.” We went around the state explaining how transportation funding works. How it wasn’t general revenue, it’s user fees. We started doing this in 2016. We explained how we use a local planning process with regional planning commissions; and how we have 1,200 volunteers at transportation advisory committees. If a community doesn’t bring a project through that process, it really doesn’t get recognized. So, everything comes spread out bottom up, prioritized by available funding and need, and then built into the hopper.

There was a lot of pent-up demand because we just weren’t at the level of funding needed. We were barely keeping up with basic maintenance.

Q: What else helped you in your effort?

A: I think the single biggest ingredient in a state to really make progress is to have a governor who understands the issues and really supports them and is willing to put political capital into the process. And Governor Mike Parson came in five years ago and made infrastructure investment and workforce development the two pillars of his early tenure. He has been very consistent throughout. He came in with the notion that if we get those two things right, everything else will start getting better, and we’ll start digging out of this hole.

Q: How did the resurrection of Missouri’s transportation network begin?

A: We had a really unique thing happen in 2019. We had a little bit of money left in the budget, and the Governor came and said “what can we do with this?”

We came up with a bridge plan and it became the governor’s focus. It was the first time general revenue had ever been used for transportation projects. We were able to advance 250 bridge repairs and replacements all over the state. These were smaller bridges but real impactful for communities. We just cut the ribbon on the last of them in December. The program is completely done, and we’ll have paid off the bonds in 18 months from now.

That was a turning point as well as getting a federal grant, an INFRA grant, for our Rocheport Bridge project on I-70. Those two things were linked. We got the bonding ability from the General Assembly only if we got the grant from the federal government. It was a real inflection point.

Q: What happened next?

A: With that, in the 2020 legislative session, the legislature passed a motor fuel tax increase for the first time since 1996, and we talked about how the federal bill was on the horizon. The increase here was 2.5 cents a year for five years, so a 12.5 cent increase on what was a 17-cent base—a pretty significant increase.

We passed the bill, and it went into effect before the Infrastructure Investment and Jobs Act (IIJA). But we timed it perfectly because we saw that coming. I think we were one of the first states in the country to allocate every single penny for road and bridge investment in the infrastructure law. We did it within six months of its passage. We had 18,103 projects funded on an estimated basis over five years, fully utilized the state revenue to pair those together, and we came out of the blocks fast with it.

Q: Now that we are in year-three of the IIJA, how have the historic levels of new investment helped shape your state program?

A: I think the historic levels of funding were in the discretionary areas and some of the areas that really hadn’t seen funding increases. So, when you’re talking about public transit, when you’re talking about rail, when you’re talking about those on the highway side, you know it was about a 21 to 22 percent increase over the five years, which is in line with some of the other surface transportation bills. Frankly, a lot of that got chewed up by inflation. But we had programmed the whole thing before inflation hit. So, we’re holding to those commitments. We’re adjusting as we’re going and we’re killing it.

Right now, I have $3.8 billion of road and bridge contracts that are active, with $2.1 billion of unfinished work still going on. And we’re adding to that, on average, about $200 million a month. So, we’re at a clip that we haven’t ever seen, and our team is just responding beautifully, and industry’s doing a phenomenal job.

The other thing we did is toured the state with the governor…We’d open a bridge, and he’d slap a big yellow sign on—“completed as promised.” We’re kind of a project delivery machine here… In a 10-year period, we completed 4,206 projects, for an $11.1 billion program estimate, and we completed at $536 million under budget—and that’s just work done. We’ve averaged 460 completed projects a year.

Q: How are you balancing demands for new capacity with the need to maintain and improve existing facilities within your system?

A: When we do long-range planning, the very first thing—and it’s been consistent over the last 30 years—is fix what we have. If you go back over that 30-year stretch, you always have political pressure for economic development work. And that’s part of what we have to do, is to build the economy.

But we were building out road capacity that we couldn’t maintain. It was creating a real disjointed construct. On average—in about the 10 years before I came here—we were adding about 40 lane miles of highway; and in my first six years here we subtracted 40 miles a year. We’re trying to balance it. We do a rolling 10-year asset management plan, and we have goals for what the conditions of the different roadways should be.

Q: How indispensable is the IIJA to all of this?

A: It’s the biggest criticality, in that every time we get a medium or long-term authorization at the federal level, it enables me to take risks at the state level financially because then we can commit to more substantial work. We have right now actively under construction the five biggest projects in the last 15 years. They’re all on track, they’re all on budget and they’re all on schedule.

And with the Interstate 70 infusion that is very unique—that is $2.8 billion of Missouri general revenue without an expectation that we’re drawing federal funds to match that. And because there was some great economy here, and the governor did an extraordinary job managing through the pandemic—the coffers were filling up—we decided to make a generational kind of investment. It is unique to have a 200-mile Interstate expansion project borne solely by the state.

Q: What are some ways that you stay in touch and work with the industry in your state?

A: To give you a good sense of the relationship—I think if you asked the industry groups, they would say we are very demanding owner operators because we have to bring value to the taxpayer. And they are very exacting contractors, and they’re trying to make their margins. We recognize that they have to make money to stay in business. And so we try to move some of the bureaucracy out of the way so that we can work together… Every time we have an uncompetitive bid, we go back and talk to the prospective bidders and ask—what did we do wrong? We assume that if we put something out that industry didn’t respond to—that’s our fault. We really work collaboratively.

Q: When you started out in your career, did you envision yourself running a state DOT someday or did you take an unexpected path to your current position?

A: Well, considering I have two degrees in finance, I would say that no, I did not envision myself running a state DOT to start. I got an undergraduate degree in finance, and I grew up in New Hampshire and put myself through college doing construction. So I’ve always been involved in that, always worked and been fascinated by it.

I figured I’d be an investment banker on Wall Street. I got a job offer when I was graduating, and I spent three weeks in New York and hated it. So I said, well, what am I going to do next?

A bunch of friends were political science majors, and they all wanted to go to D.C. and work on the Hill. I went along for the ride, and none of them got jobs on the Hill. I got a job on the Hill. I worked as a staffer in the Senate for 13 years at the beginning of my career. It turned out that with the finance background, I ended up being the chief financial officer in the Senate.

I got very involved in that and then started having a family. And I wanted to raise the kids in a small town environment, and so did my wife. We moved back to New Hampshire, and I ran my own business and operations of several nonprofits for a few years.

But then the CFO job at the New Hampshire DOT popped up and I thought, wow, that sounds interesting. I took on the deputy commissioner role, was there for about five years and got recruited to come to Missouri—pretty much because of the financial aspects of what I was doing.

The funding situation here was dire, and so it was really a turn-around opportunity. For a position in government, it’s been one of the most rewarding places.