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Utah may lose highway funds

$56 million cut possible unless Congress acts

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WASHINGTON — Utah could lose $56.7 million in federal highway funds next year because of declining gasoline tax revenues.

States could lose a total of more than $9 billion, and the Bush administration isn't going to make up the difference in its budget proposal.

The amount Utah stands to lose is second only to Colorado's $66.3 million.

Bush's spending plan for the 12 months beginning Oct. 1 will include $22.7 billion for highways, a reduction of $9.1 billion, or almost 29 percent, according to the Federal Highway Administration. This year's budget provides $31.8 billion.

The amount of money allocated for highways depends on how much the government takes in from the gasoline tax and other levies.

Several members of Congress, state transportation officials and the construction industry say the reduction would cost more than 300,000 jobs over seven years.

House members who oversee highway projects, including House Transportation Committee Chairman Don Young, R-Alaska, and ranking Democrat James Oberstar of Minnesota, vowed to add money to Bush's budget.

"This nation cannot afford this drastic $9.1 billion cut in our states' highway investments in these economic times," the lawmakers said in a statement.

"This cut could result in hundreds of thousands of Americans being thrown out of work" at a time when "we need more family wage jobs," they said.

Transportation Secretary Norman Y. Mineta said the administration did not propose the reduction. "It is a simple mathematical calculation based on the law, which on whole has resulted in significant additional construction," he said.

Officials acknowledge, however, that Bush is not trying to keep highway spending at current levels. That would require cutting spending elsewhere, raising taxes or increasing the administration's projected budget deficit.

The situation stems from a 1998 law that renewed highway and transit programs for six years. The law guarantees that money raised through gasoline taxes, which goes into a highway trust fund, will be spent on construction and repair. Earlier administrations built up balances in the trust fund to make it appear that the federal deficit was lower than it actually was. The actual amount to be spent depends on how much money is collected from gasoline taxes, and revenue has been lower than projected.

In addition to the 18.4-cent a gallon gasoline tax, levies on diesel and other fuels and taxes on trucks go into the trust fund.

Brad Mallory, president of the American Association of State Highway and Transportation Officials, questioned the administration's calculations. Mallory, Pennsylvania's transportation secretary, said gasoline tax revenue in his state and many others was up, not down.

Lawmakers have asked Congress' General Accounting Office to review the federal government's estimates.

Federal funds pay 90 percent of the construction costs for new interstate highways and a smaller percentage for other major roads. The reductions in federal monies would come at a time when states are coping with the twin budget problems of the recession and higher post-Sept. 11 security costs.

"The last thing we want to see is removing the ability to sustain economic expansion," said John Horsley, executive director of the transportation officials association. "One way to bring in more revenues is to grow the economy. Infrastructure investment becomes the foundation on which economic growth can take place."

Because highway projects are paid for over several years, state transportation officials said restoring just $2.7 billion of the $9.1 billion would allow a considerable amount of construction to continue.

"I don't think members of Congress are going to want to explain why highway funding is being cut when they're up for re-election," said William Buechner, a vice president of the American Road and Transportation Builders Association, a construction industry group.