CHARLESTON, W.Va. - Faced with declining revenues and soaring costs for construction materials, the state Division of Highways is shifting from road building to maintenance of existing highways and bridges, state Transportation Secretary Paul Mattox told legislators Tuesday. "We're transforming the Division of Highways into more of a maintenance organization to maintain our bridges and highways," Mattox told an interim Finance Committee.
The main source of funding for DOH, the state Road Fund, is projected to slowly but steadily decline as high gas prices reduce travel. That will reduce revenue from the state gas tax, the major component of the fund, Mattox said. "We're projecting state Road Fund revenues will remain flat," Mattox said.
Projections are that the Road Fund will decline from $660 million in the current budget year to $648 million in fiscal 2012-13, as drivers cut back on travel and gradually switch to more fuel-efficient vehicles.
Meanwhile, Mattox said federal road funds are projected to decline by about $25 million in the current budget year, to $325 million - and that decline could be much more severe if Congress and the president don't approve a $3.2 billion bailout to offset deficits in federal highway fund collections.
Without the bailout, federal funding to the state will be cut by $119 million, to $206 million for fiscal 2009.
Even if Congress passes a bailout bill, Mattox said President Bush has indicated he will veto it.
Also, Appalachian Regional Commission funding for construction of the Appalachian corridor highways is projected to drop from $85 million to $32 million, beginning this fall, Mattox said.
Meanwhile, Mattox said costs for road-building materials have jumped 71 percent since December 2003. The price of asphalt is up nearly 82 percent, while the price of structural steel has jumped 134.7 percent in that period, he said.
Senate Finance Chairman Walt Helmick, D-Pocahontas, noted that while the division has about $505 million in road construction projects underway, higher material costs effectively means those projects are scaled back.
"In reality, it's more like $300 million bang for the buck," he said.
