Bidding on Road Projects Delayed Due to Lack of Funding

Tue December 27, 2016 - West Edition #26
Construction Equipment Guide

HELENA, Mont. (AP) The state Department of Transportation is delaying requests for bids on $144 million in road construction contracts until May due to a budget shortfall that could put the funding for the projects in jeopardy.

Cary Hegreberg, executive director of the Montana Contractors Association, said the delays are likely to trigger layoffs by businesses that planned to bid on the 30 projects.

“We are very frustrated that this problem wasn't identified and dealt with prior to now,' Hegreberg told Lee Newspapers of Montana. “We're very disheartened that the governor's budget proposal does not deal with the issue, and we certainly will be imploring the Legislature and the governor to work together as quickly as possible to fix the problem.'

The projects would be paid for with $130 million in federal money and $14 million from the state.

The Montana Infrastructure Coalition is proposing a 10-cent increase in the state's 27-cent-per-gallon fuel tax, which would generate an additional $80 million. The coalition includes 80 public and private organizations involved in infrastructure in the state.

The fuel tax generated $300 million for the transportation department and $39 million for the Department of Justice in Fiscal Year 2016, which ended in July. The governor's office expects the DOT will get $234 million and DOJ $34 million in 2018 — a cut of 20 percent.

Budget Director Dan Villa said Gov. Steve Bullock is open to discussing a fuel tax increase, but is not advocating for it.

Republican House Speaker Austin Knudsen speculated that the road project delays and a proposed 10 percent cut to the Montana Highway Patrol budget were timed to pressure Republicans into supporting a tax increase.

Darryl James, executive director of the Montana Infrastructure Coalition, told the Great Falls Tribune the group is optimistic that the governor and the Legislature would resolve the issue.

The Highway Special Revenue Fund was projected to run out of money by July 2017 if immediate cuts were not made, Villa said. He said he talked with DOT Director Mike Tooley to help identify projects that could be delayed without raising public safety issues or leading to increased costs.

The state needs to have money in the bank since it must often pay contractors before receiving federal reimbursements, Villa said.

Tim Crowe, Bullock's communications director, said the governor has proposed $283 million in infrastructure projects in the next two-year budget, including issuing $157 million in bonds to pay for the work.

Both parties have said infrastructure projects are a high priority for the 2017 Legislative session, which starts on Jan. 2.

The 2015 Legislature adjourned after failing to pass a bill that called for $150 million in infrastructure and building projects across the state. Some lawmakers didn't support two major building projects included in the plan while others did not like that bonds would be issued to pay for some of the work.

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