Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, December 19, 1993 TAG: 9312190016
SECTION: VIRGINIA PAGE: C5 EDITION: METRO
SOURCE: Associated Press
DATELINE: ABINGDON LENGTH: Medium
The department is in good financial shape at the moment, department Commissioner Ray D. Pethtel told western Virginia legislators.
"However, when you start looking at the demand for dollars, that's a different situation," he said during a round-table discussion.
The department needs an annual cash injection of $30 million to $50 million in the next two years, Pethtel said. Without it, the department would be hobbled by the end of 1995, he said.
To offset the department's expected budget shortfall for maintenance and improvement projects, Pethtel suggested the General Assembly move funds from the agency's Transportation Trust Fund.
The General Assembly created the fund to pay for new highway construction.
Pethtel said the alternative is a "revenue measure," or tax increase, possibly on gasoline and diesel fuel.
Pethtel said the department lost $500 million in funding from 1990-92, although the agency's financial situation has begun to improve.
State funding was $30 million more than expected this year, he said, and federal funds in 1993 have boosted the department's budget by about $100 million.
Part of the budget woes can be traced to the escalating cost of highway construction, Pethtel said.
Highway costs are going up partly from increased federal mandates on the planning and construction standards that states must follow, while federal funding hasn't kept up.
"Federal environmental regulations are driving up construction costs faster than any other single factor," said Jack L. Corley, administrator of the agency's Bristol District.
At the demand of Gov. Douglas Wilder, the agency three years ago began reorganizing to eliminate wasteful spending and duplication of effort.
After a two-year study, the reorganization began in July and is expected to save $34.5 million to $42 million annually. The funds would be redirected toward road construction and maintenance.
The redirected funds would still not be enough to cover the expected statewide demand by 1996 for agency services.
State Sen. William C. Wampler Jr., R-Bristol, said the state economy could improve by 1996.
Wampler, a member of the Senate Finance Committee, said that would mean greater tax revenues for the General Assembly to work with "after we address the needs of public safety and education."
by CNB