Wyoming Highway Funding Dispute

Staff | September 28, 2010

Cheyenne— Within days after he submitted a budget plan calling for $915 million in additional spending for the second half of the current biennium, Wyoming Gov. Dave Freudenthal's proposal was slashed by the Legislature's Joint Appropriations Committee. Among cuts made by the legislators: highway construction and repairs from $162 million to $98 million; airport improvements from $15 million to $9 million; water development fund spending from $45 million to $15 million; and the entire $91 million in community college capital construction.

At the same time, the Joint Revenue Committee endorsed a bill that would raise the state fuel tax by 5 cents a gallon, while decreasing vehicle registration fees by about one-third. The fuel tax increase (to 19 cents per gallon) would generate about $34 million a year for highways, and the revenue loss from cutting registration fees (about $25.2 million) would be taken from the school foundation fund, which is swelling because of increased mineral revenue.

The governor, however, said he will not support the fuel tax increase when money is readily available in the Permanent Mineral Trust Fund for highway funding. Speaking of the proposed fuel tax hike, Freudenthal said, "I don't, frankly, expect it to get to my desk. It is not a measure I would support." He explained, "We're running around talking about raising taxes when the real issue is having the political will to allocate these funds we have currently available to the immediate needs that exist."

The governor had recommended taking the nearly $180 million total for surface and air transportation from $200 million the Legislature appropriated last winter for transfer to the Permanent Mineral Trust Fund in 2007 and 2008. He insists the Permanent Mineral Trust Fund is getting plenty of money already — $700 million for the current biennium — and will reach a $4-billion total before 2010, the goal of legislative leaders.

The Joint Appropriations Committee members instead want to take the $107 million they are recommending for air and ground transportation from the state's general fund.

The Wyoming Department of Transportation has documented a $250-million annual budget shortfall and was pleased with Gov. Freudenthal's request for an extra $162 million for highways next year. If both the $98-million appropriation and the fuel tax increase are approved, WYDOT stands to receive about $132 million in added funding. Kevin Hibbard, the agency's budget officer, said any increase in revenue will be of help in sustaining the department and its activities, which, he said, are "in survival mode."