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Federal highway aid uncertain as legislators begin their study

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news Mitchell, 57301
Mitchell South Dakota 120 South Lawler 57301

PIERRE -- The federal government's highway trust fund will run out of highway money this summer, putting road and bridge projects into financial uncertainty, South Dakota Transportation Secretary Darin Bergquist said Thursday.

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He told members of the state Transportation Commission that the fund could be empty as early as July unless Congress provides an injection of general funds.

This isn't new. Facing a shortfall in 2008, the federal highway administration slowed reimbursements to states until Congress approved supplemental funding.

Complicating the situation, the current federal transportation law, known as MAP-21, expires Sept. 30 with the end of the 2014 federal fiscal year.

Bergquist said there is a $100 billion gap between expected revenue and current programs.

"That will be the real starting point to getting anything done," he said.

Leaders in the U.S. House of Representatives have said they want to pass a new six-year bill before going on October break, while the U.S. Senate's committee on environment and public works delivered its version earlier this month.

The federal-aid highway program apportions about $40 million annually for daily reimbursements to state transportation departments for road and bridge construction projects, according to testimony presented in February to the Senate committee.

Earlier this week, Gov. Dennis Daugaard said he is willing to consider increasing South Dakota's motor-fuel taxes. He previously was opposed to tax increases.

South Dakota's main rate has been 22 cents per gallon since 1999 for gasoline and diesel used for highway travel. Ethanol blends and biodiesel have lower rates.

Transportation Commission member Jerry Shoener of Rapid City said Daugaard's change could be significant because the Legislature has assigned a study committee to look at road and bridge funding.

Shoener recalled that he tried but couldn't get a fuel-tax increase passed while he was a state senator. "We are taxing the people using the facility, the roads," he said.

"That will be a main issue for that summer committee," commission member Ralph Marquardt of Yankton said.

The legislative panel's first meeting will be June 17 in Pierre.

Bergquist said the studies conducted in 2008 and 2009 played "a big part" in the legislation that passed in 2011 raising license plate fees.

Daugaard tried to stop the increases by vetoing the bill but legislators overrode him.

For the 2015 state fiscal year that begins July 1, 2014, the state Department of Transportation is budgeted to receive $380.7 million of federal funding, including $347 million for construction.

Another $220.2 million is budgeted to come from South Dakota sources such as motor-fuel taxes for construction and DOT general operations.

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