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Roads Suffer as W.Va. Lawmakers Block Tax Hike

Fri July 18, 2008 - Northeast Edition
Lawrence Messina

CHARLESTON, W.Va. (AP) West Virginia would be hard-pressed to look to its sister states, or even the federal government, for a better way to fund road repair and building needs.

The recent special legislative session helped highlight the Mountain State’s revenue quandary. Lawmakers voted to block a scheduled Jan. 1 increase to the state’s motor fuels tax, to help consumers with high prices at the pump. But they also had to set aside $40 million for the State Road Fund to offset expected losses from that tax, the fund’s chief revenue source.

“With gas prices, the consumer is really bearing too much of a burden on their own pocketbooks,’’ said Senate Minority Leader Don Caruth, R-Mercer. “But I think we all have begun to recognize that the historical method for raising revenues for West Virginia roads is not adequate.’’

So has neighboring Virginia, where legislators proved unable recently to agree on dueling highway revenue measures. Stalemate ended the second special session that state has held in as many years to address transportation funding.

Virginia lawmakers rejected both an array of tax and fee hikes as well as an alternative that banked on potential offshore oil drilling royalties and future growth at seaports and airports.

New Jersey, meanwhile, is scrambling for options after lawmakers there balked at significant rate hikes to its extensive toll road system. It expects to exhaust its transportation funding in 2011.

“Nationally, the trend that we’re seeing is a lot of states are struggling to come up with these dollars,’’ said Matt Sundeen, a transportation analyst for the National Conference of State Legislatures.

Federal highway officials are no better off. They project that the nation’s main highway trust fund will end 2009 between $4 billion and $5 billion in the red. A special commission completed a two-year study of the problem earlier this year, but ended up divided over possible solutions.

West Virginia expects to raise $638 million for its State Road Fund during the budget year that began July 1. The projected revenue is $23.8 million less than what the fund raised last year, when state highway officials were already complaining that needs had outstripped available dollars.

The state is counting on its per-gallon tax on gasoline and diesel to provide nearly 60 percent of this year’s road fund revenues. But the tax failed to reach last year’s estimate, partly because high prices reduced consumption.

That decline is projected to depress gas tax revenues by $25.8 million this budget year compared to last year. But as the state already sports the nation’s 13th highest gas taxes, according to the latest American Petroleum Institute figures, the recently approved freeze underscores the Legislature’s mood on the topic.

“With gasoline prices headed the way they are, it’s a very difficult political sell to raise gas tax rates,’’ Sundeen said. “Yet, in a significant majority of states, motor fuel taxes are the biggest component of transportation funding, or at least highway funding.’’

With lawmakers loathe to raise such taxes, Sundeen added, over time their rates have failed to keep pace with inflation.

Alternatives include a tax based on vehicle miles traveled. The two-year study by the National Surface Transportation Policy and Revenue Study Commission touted a VMT tax, while noting the technological hurdles involved in calculating and collecting it.

Sundeen cited a recent pilot project in Oregon that relied on GPS devices to find a VMT tax feasible.

“Proponents see that as a truer user fee,’’ he said. “The downsides to it include a lot of people being concerned with the privacy implications.’’

Three of the special commission’s 12 members broke with the majority and instead advocated tolls. But Caruth, whose district includes the West Virginia Turnpike and its toll booths, is a leading critic of such an option.

“Tolls are not my idea of maintaining highways,’’ Caruth said. “If we use tolls, use them to build a road or portions of a road. When the bonded indebtedness is paid off, the tolls go away.’’

Sen. Brooks McCabe believes West Virginia must revamp not only the road fund but its entire approach to transportation. The Kanawha County Democrat was among three senators who opposed the gas tax freeze.

Besides stunting fuel tax revenues, high gas prices have also made petroleum-using asphalt more expensive for road building, McCabe noted.

“We’ve reached a crisis point,’’ McCabe said. “We should have a multifaceted approach. We need to look at regional rail, and more innovative types of transportation systems. The answer is not always more roads.’’

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