Lawmakers react to rapidly disappearing surplus
The good news is the state Department of Transportation has installed new systems to track and forecast its costs and revenue with great precision after a scathing audit report last year led to the resignation of the former transportation commissioner, Carol Murray. But now that policymakers know what’s going on now, the news is bleak.
Interim Transportation Commissioner Chuck O’Leary last month announced that the surplus in the state highway fund has shrunk from $93 million in 2006 to an expected $300,000 in 2009.
Revenue has grown a scant 1.8 percent yearly, he told the House Public Works Committee, while costs have risen 15 percent a year the last three years. That’s largely driven by the price of asphalt.
“The budget was out of balance by design,” O’Leary said. “These are the facts. We’ve been spending too much and collecting too little. It is what it is.”
The commissioner said receipts from the gasoline tax will increase at the same slow rate because vehicles are getting better mileage. He warned that many projects in the 10-year transportation plan will be delayed.
“It has to come from someplace,” O’Leary explained. He offered to be more specific after briefing Gov. John Lynch and then key lawmakers.
O’Leary said the widening of Interstate 93 to four lanes each way south of Manchester has burgeoned into a $710 million project, up from $450 million three years ago. The new figure accounts for inflation, as will estimates from now on. The $450 million figure ignored that factor.
“It might be cost-effective to borrow the money to get some of our work done quicker,” the commissioner said. “Our purchasing power is eroding dramatically.”
Lawmakers last year approved about $200 million in bonding for the I-93 widening to speed its completion. The House has approved another $59 million this spring in bonds for general highway work in the capital budget.
Rep. Gene Chandler, R-Bartlett, sits on Public Works and chaired that committee last year.
“It’s a very big problem,” he said. “My fear is many projects will be put back considerably longer than that. I don’t know if people will have the will to raise the gas tax and turnpike tolls. It’s been a long time since both of them increased, and we’ve got to stop spending highway fund money on the turnpikes. The tolls have to be high enough to make that system whole.”
Chandler thought the long-delayed Conway Bypass project will probably hold its place.
“It’s still set to start as soon as 2008,” he said. “I believe that project is safe. It’s our big one up here.”
Maine indexes its gasoline tax to the inflation rate, something Chandler thought New Hampshire might consider.
“I don’t know how often they change it,” said, “but it must help.”
Nationwide squeeze
Rep. Franklin Tilton, R-Laconia, serves on the public works panel and wasn’t surprised at the news about the fiscal problems. He’d known about the dramatic cost escalation for I-93.
“It helps to get some of the specifics out, though,” he said.
Tilton asked O’Leary if he plans to use for bridge repairs some of that $59 million the state would borrow in the draft capital budget.
“Yes sir,” the commissioner said.
Afterward, Tilton had a specific river span in mind, the Main Street Bridge in downtown Laconia. He’s familiar with its weak underside as the former city engineer.
“The mayor (Matthew Lahey) told me this morning the city would fund the design for the bridge repair to encourage the state to accept it into their program,” Tilton said. “The earliest the work can happen is 2014 if we move now. We’re afraid any year’s delay could become two or three.”
Bill O’Donnell of the Federal Highway Administration’s Concord office said road budgets are getting squeezed nationwide.
“We’re concerned whether the federal highway trust fund can remain effective,” he said.
Mike Izard, a principal planner at the Lakes Region Planning Commission, said area towns have compiled a list of 18 priority road projects as the first step in updating the state’s 10-year plan, which happens every two years. They all gained approval in April from the commission.
He said four are currently on the fast track for completion by 2012 in the state plan, if funding still lets them proceed:
• Study the feasibility of a limited access connector between Franklin and Northfield
• Rebuild Route 28 from the Alton Traffic Circle into Barnstead
• Rehab the highway and four bridges on Routes 16 and 25 in Ossipee
• Renovate 3.2 miles of Route 3 from Center Harbor to Pleasant Street in Meredith.
“But all 18 projects are very important to us,” Izard said.
Rep. John Tholl, R-Whitefield, said he’s worried the 10-year plan could become 20 or 25 years. Little projects up north could become even smaller projects.
“The state was planning to put in a new culvert where several streams feed under Route 135,” he said. “Now they’re just going to shim the ends. It’s a Band-Aid. The road is undermined in places.”
