Highway Fund revenues also falling short

By Geoff Dornan

Appeal Capitol Bureau

Gov. Jim Gibbons was told Thursday that Nevada's budget woes have now spread to the Highway Fund.

At a Thursday meeting in his office, he was advised spending at the Department of Motor Vehicles, Department of Transportation and Highway Patrol will have to be cut back by up to $75 million this budget cycle.

"The projected decrease over what we thought we were going to collect and distribute to the Highway Fund in Fiscal Year 2008 is $25.4 million," said Department of Motor Vehicles Director Ginny Lewis.

She said the original projection was $482.9 million for 2008. That has been lowered to $457.4 million.

Lewis said if the economy doesn't recover, the shortfall for 2009 will be another $50 million short - a total over the two-year budget cycle of $75 million.

Gibbons has already had to order 4.5 percent cuts in all General Fund spending because of a projected revenue shortfall now estimated at $564.7 million.

DMV collects and distributes to the General Fund money from licenses, registration and the special fuel tax. The money provides the primary funding not only for DMV but the NHP and NDOT.

"Just as the General Fund is seeing issues, the Highway Fund isn't immune either," Lewis said.

This biennium, DMV was budgeted for $103.5 million of that Highway Fund money. Lewis said they wanted to protect current programs while making the necessary cuts. So she decided to postpone two projects that were funded by the 2007 Legislature. Those are the small express DMV office in Fernley and a similar office in North Las Vegas. Each would have had about three employees.

"We decided because there are salaries involved and those are ongoing costs, we'll delay, this biennium, doing those projects," she said.

NHP Col. Chris Perry said his priority was avoiding cuts to NHP's personnel resources. Gibbons, he said, agreed.

"So we're going forward with the hiring as was authorized by the Legislature," Perry said.

He said NHP's strength will increase by 20 troopers this year and 38 in 2009.

As its share of the reductions, NHP will surrender the $21.1 million appropriation to construct a new substation in North Las Vegas. Of that, about $19 million is Highway Fund money. The rest will go back to the General Fund.

"That was an easy hit to take," said Perry. "When you look at putting people on the road or putting a building up, it's a no brainer."

The highway patrol is budgeted for a total of $133.2 million in Highway Fund money.

The bulk of the Highway Fund money, well over a half-billion dollars for the biennium, goes to NDOT, and Director Susan Martinovich said the vast majority of that is dedicated to road construction and maintenance projects.

Her problem in making cuts, she said, is that much of the money is already committed to projects now under construction. Once the contract is signed and construction begins, she said, the funding can't be cut.

"What that means is that we look at delaying projects," she said. "New projects that are not started yet will have to wait."

Martinovich said NDOT's current construction program is about $470 million.

When considering new projects, she said the top priorities are those on the Interstate Highway System and others that qualify for large amounts of federal matching money. Martinovich said the state's mega-projects including I-80 in the north, U.S. 95 and I-15 in Southern Nevada, will remain top priorities for any available money.

"We want to be in a condition of trying to move those projects forward, but we also want to try have a pavement preservation program, so it's kind of a balancing act."

How much the reduced revenue will impact the roadway construction program, Martinovich said, "we're still evaluating." But she said going forward, that $470 million construction program could drop significantly at a time when the state's road construction needs for the next decade are projected at least $5 billion more than current revenue sources will generate.

"We've identified more projects than we have money for," she said.

As for the impact on non construction, Martinovich said: "We'll try hold things together with the districts but, maybe, we won't get to react to graffiti as fast or pick up garbage as fast."

"But we won't compromise on public safety," she said.

• Contact reporter Geoff Dornan at gdornan@nevadaappeal.com or 687-8750.