Revenues decline in state transportation fund

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(Host) It looks like there will be less money available for new highway construction next year. The state Transportation Fund has seen a decline in revenues. So officials say they may ask the Legislature to borrow more money to fund major new road projects.

VPR’s John Dillon reports:

(Dillon) Vermonters seem to be driving less and they’re buying fewer new cars. That means less tax money has flowed into the state’s Transportation Fund. The monthly revenue numbers released on Monday show that the vehicle purchase and use tax was down 22% from November of last year. Gas tax revenues also dropped 28%.

The state still predicts the Transportation Fund will grow slightly this year. But there clearly won’t be enough money to pay for all the paving projects, bridge repairs, and new highway construction – such as the Bennington Bypass or the Circumferential Highway in Chittenden County.

Governor-elect Jim Douglas says he may support raising the state’s debt limit so Vermont could sell bonds to fund major new projects, like the Circ Highway. That would reverse a position taken by Governor Howard Dean, who didn’t want the state to borrow more money.

(Douglas) “Unlike the current administration, I’m open to the possibility of using bond proceeds for transportation projects. Governor Dean has a strong aversion to that but I don’t. There are many other states around the country – states with a higher bond rating than Vermont – that have issued debt for transportation infrastructure projects.”

(Dillon) The state now has a borrowing limit of $39 million. But the Legislature’s joint fiscal office says that won’t begin to cover all the projects that require bond financing. The office says school construction, new regional technical centers and other projects are expected to cost $105 million in the next fiscal year. And that’s before the highway projects are included.

House Speaker Walter Freed of Dorset says he’s open to the idea of using bond money for highway construction:

(Freed) “I’m not opposed to that. I’m not so sure I would favor it, but I would certainly consider it. In order to consider it, I’d want to see it done in such a manner that it was a special fund, that it was leveraging federal money that could get these projects done in a much more timely manner. Only under those circumstances; perhaps if it had allocated a special gas tax to pay it back.”

(Dillon) Bennington Democrat Dick Pembroke is the outgoing chairman of the House Transportation Committee. Pembroke says he thinks the public would support a higher gas tax to pay for paving projects and new construction. But he says the state should also stop using the Transportation Fund to pay for non-transportation programs:

(Pembroke) “I have no problem with bonding. But I’d like to get some of this money back that we’ve been giving away for the last 16 years or so and put that money back into roads, instead of other projects.”

(Dillon) Pembroke says there’s not enough money just to maintain the road network. The state Transportation Agency says it needs about $50 million to maintain roads, but it got $22 million this year to do the job.

For Vermont Public Radio, I’m John Dillon.

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