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Sharp curve ahead: more road bonds

Utah legislators will likely end up borrowing more than $200 mil-lion next fiscal year for roads, a much bigger bond than GOP leaders had hoped when the 1998 Legislature convened a month ago.

Democrats can barely hold back their smiles and nod with an "I-told-you-so" attitude.Friday morning Republican legislative leaders met with GOP Gov. Mike Leavitt for two hours talking about "hot spots" in the fiscal 1998-99 budget. The $6.1-billion budget must be adopted before lawmakers adjourn in a week and a half.

Much of that meeting was spent on the transportation funding plan for next year. And the word isn't as good as leaders had hoped four weeks ago.

That's because of group misfortunes or missteps: dropping estimates in federal road cash; so-called "efficiency savings" from the Utah Department of Transportation that have evaporated; contributions from local counties and cities that didn't come in; and cash legislators had put into road budgets that now may be needed for other state programs.

It's a pile of bills that have put GOP leaders in a bind.

"We're not going to reduce the number of road projects we'll build" in 1999 from the Centennial Highway Fund, said House Majority Whip Kevin Garn, R-Layton. "That means we have to borrow."

Garn said that Friday Leavitt and administration officials agreed that $12 million in "efficiency savings" within UDOT aren't available for roads next year. There are still differences on exactly what such savings are - some senators maintain the savings in engineering and other cost-cutting measures were actually used on non-I-15 projects. In any case, said Garn, "They aren't cash, so we can't spend it next year."

In addition, said Garn, $25 million that leaders took out of general state funds and earmarked for roads may have to be given back, all or in part, because of other critical state needs.

While Senate President Lane Beattie and Senate Majority Leader Craig Peterson say the $25 million won't be touched, Garn questioned whether prisons, education and other "hot spots" can be dealt with adequately without it.

Finally, $2.1 million that Leavitt had hoped for in local government contributions and/or toll roads isn't there, either.

House Minority Leader Dave Jones, D-Salt Lake, said Democrats doubted all along that UDOT could save $20 million a year in efficiencies for 10 years - as Leavitt and department officials promised last year when the huge $2.8 billion Centennial Highway Fund was put together.

"We're gratified that our Republican colleagues have come to see reality," Jones said.

Early in the session, House budget chairman Marty Stephens, R-Farr West, said GOP lawmakers hoped to borrow about $125 million for roads next fiscal year. In 1997 they borrowed $600 million for the I-15 project.

Now that $125 million is officially $184 million and growing.

Friday, Leavitt said road funding must be settled on "a one year-at-a-time basis."

"Is there uncertainty" in long-range funding plans? "Yes," said the governor. But that's the nature of the beast.

For example, state officials had hoped for $100 million from the federal government next year. Now that number is projected to be $50 million. "And we may only get $45 million," Garn said.

Each year actual costs of different parts of I-15 reconstruction must be measured against estimates, Leavitt said. Those could increase as well.

"We need to solve the $191 million (road funding shortfall) that we need for this coming (fiscal) year," said the governor.

At the start of the session, GOP leaders hoped they could pay cash for much of that amount. Now they're looking at bonding for much or all of it.