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Highway department budget increases because of rising fuel costs Wednesday, Jun 11, 2008 By Rob Moritz Arkansas News Bureau LITTLE ROCK - Highway officials Tuesday blamed the rising cost of fuel and other oil-based products and a decrease in gas-tax revenue as motorists take fewer trips for the bulk of a 3.2 percent increase in the state Highway and Transportation Department budget for next fiscal year. The state Highway Commission approved the department's $290 million operating budget for the fiscal year that begins July 1 and agreed that higher costs and lower revenues may force the panel to revisit the operating budget from time to time during the year. No divisions of the highway agency will see their budgets reduced, but some programs could be cut back. One of the first could be mowing along state highways, Highway Director Dan Flowers said. "We're going to have to visit this regularly, maybe every month," Flowers told the Highway Commission. The director cited a federal highway study that found highway travel in the state was down about 8 percent in March, same as percentage as the dropoff in tax revenue, more than 75 percent of which comes from the state fuel tax collections. Larry Dickerson, the department's chief financial officer, said after the meeting that in April the number of gallons of gasoline consumed in the state was down 1.4 percent from last year, and the amount of motor fuel revenue was down about $1.5 million, or .54 percent, from last year. "We're going to be watching this real closely," Dickerson said. Under the budget approved Tuesday, the highway department's 10 district offices will see a 4 percent increase in their budgets - $1.9 million - mostly to offset fuel costs, officials told the commission. The state Highway Police will receive an additional $350,000 to purchase new radio equipment and body armor vests for highway police officers, and an additional $306,000 is for mowing contracts. The department expects to see about $15 million next year in revenue from a state severance tax increase on natural gas that goes into effect Jan. 1. The highway department will not actually begin receiving tax revenues March, Dickerson said, estimating the department should receive about $36.8 million the following fiscal year. Also in the department's budget is a 2 percent cost-of-living increase for employees, amounting to about $2.9 million, as well as another 1.5 percent - $2.2 million - in merit pay for employees who have performed at an overall satisfactory level. |
