July 10, 2011

Group laments drop in highway funding

Red flags go up after the Legislature fails to OK borrowing or pass a plan to replace falling gas taxes.

By Susan M. Cover scover@mainetoday.com
State House Bureau

AUGUSTA - Reduced state spending for road and bridge improvements in the next two years is raising concerns about needed upkeep and higher costs in the future.

The Maine Better Transportation Association, a 700-member group representing contractors, engineers and others, released a report last week detailing the "good, bad and ugly" results of the recently completed legislative session.

It praised lawmakers for adding about $3 million a year for aviation, rail, transit and other non-highway needs.

It lauded the decision to fund transportation needs with proceeds anticipated from the state's renegotiation of its wholesale liquor distribution contract. The allocation could be as much as $7 million per year starting in 2014.

And it said that 600 miles of roads each year will get surface treatment, the "skinny mix" paving that is a temporary fix for the state's worst roads.

But with no borrowing approved by the Legislature and no plan to replace falling gas tax revenue, the industry association is raising red flags.

Transportation Commissioner David Bernhardt said the state borrowed too much for transportation in recent years, including more than $300 million in the last two-year period.

"That's 25 percent of the total program," he said. "That's just unsustainable. ... This biennium, we are going to be paying interest and principal of $75 million."

Bernhardt said the current work plan "stretches the dollars" with lower-cost treatments and by working with cities and towns to share costs for work on state roads. Also, the state is getting bids 20 percent lower than estimates and getting offers from multiple bidders, freeing up money for other projects.

Maria Fuentes, executive director of the Maine Better Transportation Association, said the state should be making investments now to take advantage of hungry contractors and engineers, who will do the work for less.

"They are seeing a lot of bidders, even on small projects," she said. "Why wouldn't we take advantage of that?

"Our concern is, moving forward, it just gets us further and further behind" if road work is delayed.

She criticized the Department of Transportation for shifting money from long-term projects to short-term maintenance paving, saying it will just cost the state more in the long run.

"You know why they do it -- because it's less expensive than actually fixing the road," she said. "They've got to do something so the road won't fall apart."

The current two-year highway fund budget, which is separate from the state's General Fund, is $988 million, down from $1.23 billion in the last two years. The highway fund is supported primarily by a 30-cent-per-gallon tax on gas.

Bonding accounted for 25 percent of the budget in the last two years; it's 5 percent in this budget. A $55 million bond that already has been approved will go toward bridge work in the current budget, Bernhardt said.

The transition from one administration to the next, the uncertainty of federal funding, and gas tax revenues that are expected to keep declining because of more fuel-efficient cars mean it's time for Maine to consider other ways to pay for roads and bridges, said Sen. Ron Collins, R-Wells, co-chairman of the Legislature's Transportation Committee.

The state must examine its budget priorities so that transportation needs are funded, at least in part, by the General Fund, he said.

"A $6 billion budget should be ample for any state of our size to maintain services we provide through the revenue we raise," he said.

John Melrose, who was transportation commissioner under independent Gov. Angus King, said most states provide some funding for transportation from General Fund revenue.

While the national average is more than 17 percent, Maine will provide no money from its General Fund for transportation in the next two years.

(Continued on page 2)

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