03/03/2011

Budget Rumblings

The Governor’s Budget was released week before last and gave no help to our industry. Contract Resurfacing and System Preservation both took a hit. After conversations with DOT it became clear to me that they were just as blind-sided as I was by the breakdown within the Transportation budget. DOT lost no time in suggesting changes to their budget – using the same dollars but allotting the money differently. Their recommendation would restore 2010 funding levels to Contract Resurfacing and Preservation plus add additional funds to both pots.

Last week the House leadership gave guidelines for budget cuts to the appropriations subcommittees. Transportation funding does not come from the General Fund and currently both the Highway Fund and the Highway Trust Fund are growing slightly. Therefore, the guidelines to the Transportation Appropriations Sub-Committee did not suggest cuts but instead listed areas to be examined for increased efficiencies. One of the topics listed for examination was the Equity Formula. The Equity Formula applies only to Highway Trust Funds. It requires that 50% of funds be distributed based on population, 25% is based on remaining intrastate system miles, and 25% is distributed equally among the divisions.

Where you stand on the Equity Formula depends on where you live and work. Urban centers need additional funds to solve congestion. Rural areas and small towns need infrastructure to attract industry and needed jobs.

The overarching issue is the need for more money. Changing the Equity Formula will just re-slice the existing pie.