Gas tax revenues lagging for road budget

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Stagnant gasoline tax revenues have prompted the Legislature to consider another approach to paying for road repairs - using a share of North Dakota's excise tax on car and truck sales.

"It's a change … from what we've done before," said Sen. Rich Wardner, R-Dickinson. "We're tapping that to try to make up the shortfall."

The North Dakota Senate is considering changes to the Department of Transportation's two-year budget bill, which was stalled Wednesday after senators voted to include a $550,000 Nelson County road project in the legislation.

As drafted by the Senate, the Transportation Department budget includes $902.3 million in spending for the 2007-09 biennium, compared to the current budget of $955 million.

The blueprint relies on fuel taxes, including a 23-cents-per-gallon tax on gasoline and diesel fuel, and motor vehicle registration fees. It expects to get $321.8 million in tax and vehicle registration revenues over the next two years, with cities and counties getting $119 million of that sum.

Tax collections on gasoline and ethanol-blended fuel, which should reach $161 million during the current two-year budget period, are expected to decline to $147.7 million in the next two years.

Higher fuel prices are prompting North Dakotans to drive more fuel-efficient vehicles or simply to drive less, says Francis Ziegler, the Department of Transportation's director.

In addition, the agency's federal aid allotment - most of which goes for road construction - is expected to drop $58.6 million, or 11 percent, in the next two years.

Wardner said the shortfall is one of the reasons lawmakers are turning to the 5 percent motor vehicle excise tax as a money source for roads. Unlike the gasoline tax, excise tax collections grow with inflation because they are pegged to the value of vehicles.

Gov. John Hoeven, in his spending recommendations to the 2007 Legislature, included $20 million in state general fund spending in the department's budget. The sum has been lowered to $14 million, provided by the excise tax, most of which now goes to the general fund.

Senators also voted Wednesday to include a Nelson County road project in the agency's budget. The money is intended to build up a county road that provides a crucial link to the western part of the county, said Sen. Joan Heckaman, D-New Rockford.

The road is in danger of being swamped this spring by the expanding waters of Stump Lake, Heckaman said. Raising it while the road bed is still reasonably dry will be much less expensive than trying to do so after the water has crept up, she said.

Senators voted 24-23 to include the project in the budget bill despite opposition by Sen. Bob Stenehjem, R-Bismarck, the Senate majority leader, and Sen. Raymon Holmberg, R-Grand Forks, the chairman of the Senate Appropriations Committee.

"We have tried in the past to restrain ourselves when it comes to us deciding what road projects we're going to do around the state," Holmberg said. "Once we start down this road, no matter what its height, it's going to continue."

Sen. Dave Oehlke, R-Devils Lake, was sympathetic. Miles of roads within his own district are submerged beneath Devils Lake.

"To work with that lake and roads when the water is lapping at the banks of the road is not a cheap predicament. It is very expensive," Oehlke, said. "For every five loads of gravel in, you lose four."

The bill is HB1012.

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