WSYM FOX 47 News - Lansing News, Weather, Sports and ContestsNM transportation agency facing budget problems
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SANTA FE, N.M. (AP) - The New Mexico Department of Transportation is struggling to cope with a drop in tax revenues that pay for its operations and highway projects.
Transportation Secretary Gary Giron has told lawmakers the agency is preparing to cut spending and that highway maintenance may be postponed.
The agency's financial problems are separate from a $650 million revenue shortfall that legislators are trying to plug in the state's main budget for public education and general government operations.
The department is financed by federal highway money and earmarked state revenues - taxes on gasoline and diesel, vehicle registration fees and weight distance taxes paid by truckers.
However, those state revenues have been declining as motorists cut back on travel because of higher fuel costs and the poor economy. Cars and trucks also are becoming more fuel-efficient, which means less revenue from gasoline and diesel sales.
The department initially expected to receiveabout $400 million in state road fund money this year when its budget was approved by the Legislature, but the revenue estimate has been pared back to $360 million and could drop to $340 million, Giron told the House Appropriations and Finance Committee in a briefing Tuesday on the agency's budget problems.
The department received about $365 million in state revenues in the last budget year, which was down from $382 million in 2008.
New Mexico expects to receive about $360 million in federal highway money this year, about the same as last year.
Faced with a continued drop in state revenues, Giron said, the agency is moving to cut its budget "as quickly and as responsibly as we can."
The state road fund has cash-flow problems and in recent months has been running in the red because revenues haven't come in as quickly as needed to pay the department's bills.
The agency has implemented plans to trim spending by almost $31 million this year and is looking at other reductions to save an extra $9 million, Giron said. The department pared back its spending by about $50 million last year and $30 million in 2008 because of declining state revenues.
About 15 percent of the agency's 2,700 staff positions are vacant. Giron said the vacancy rate could reach 20 percent as the department tries to squeeze more savings out of personnel.
Giron warned lawmakers that the department has no cash reserves to meet unexpected expenses and that a harsh winter will create problems because it will require increased overtime for maintenance workers and boost spending on fuel and supplies. If the state revenue problems worsen, he said, it will hurt the department's ability to come up with required money to match federal financing for highway construction projects.
Rep. Patricia Lundstrom, D-Gallup, told her budget committee colleagues that the department's problems should come as no surprise because she and others have warned for years that the state needed to increase transportation financing.
"Now we're at the point where the chickens have come home to roost with these negative cash balances," Lundstrom said.
A 2007 task force suggested several proposals to deal with the transportation budget squeeze, including raising vehicle registration fees, indexing the gasoline tax to rise with inflation and increasing the state's gross receipts tax rate, with the money earmarked for transportation.
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