By Elizabeth “Sam” Grosz - CNS
Two-thirds of the state’s transportation funds are federal dollars, a group of state lawmakers was reminded recently. Darin Bergquist, state Secretary of Transportation, said almost all of that comes from the federal highway program. The old federal program expired in 2009, he said, “and to date we still don’t have a replacement program for that—we continue to operate under periodic extensions of the old program, getting a little bit of funding at a time, with the hope that at some time Congress will pass a new long-term program to provide some certainty to states…”
South Dakota lawmakers in the House Transportation Committee received an overview of the department from Bergquist and others. He said the corresponding Senate committee had also received the presentation that week.
The extension the department is operating under now, he said, expires March 31.
“So, Bergquist said, Congress is in a position where they are going to have to do something, one way or another.. to continue that federal funding.”
The problem Congress faces, he said, is that in the past few years, the expenditures have far exceeded the revenues coming in.
“As a result of that,” Bergquist said, “the federal highway fund has been on the verge of going broke on multiple occasions.” To date, he added, three different times general fund money, totaling $35 billion, has been added to the highway fund.
One House committee proposal had been to reduce the federal funding 35 percent, which Bergquist called “a big deal for South Dakota and a big deal for every other state.” He said that could mean the loss of about $90 million for South Dakota.
The Senate disagreed with that and said they could come up with their own approach, he said, and has introduced a funding program, called MAP-21, or Moving Ahead for Progress in the 21st Century.
It would be a two-year program, he said, with a small inflationary increase from the previous transportation program. The problem remains a $2 billion shortfall on how to pay for it.
Bergquist said South Dakota now gets back $2 for every $1 collected, and that remains the same in the Senate proposal.
“One of the big concerns under MAP-21,” said Bergquist, “is there is a provision that while providing funding for the states on one hand, would rescind all prior standing earmarks that have not already been obligated.” The state using other funds.
There are a number of such projects in the state, said Bergquist, including the Sioux Falls Railroad Relocation Project, which has about $35 million earmarked, but not obligated.
It is expected the federal House will introduce its own version of the bill, with a five-year provision, seeking funding at the same level as the prior transportation program.
Bergquist said his thought is that there will be another extension the end of March to get Congress past the November election.
In response to a question by Rep. Steve Street, D-Revillo, about trying to make up a federal shortfall, Bergquist said the state’s gas tax generates $6 million per penny.
He also noted that it costs $1 million per mile for total reconstruction of state highways.
County, city funding
One organizational change has moved the Local Government Assistance office from the Division of Finance and Management into the Division of Planning and Engineering, said Bergquist.
He said it is hoped to provide a better level of service and assistance to local governments, particularly those counties and cities receiving an allocation of highway funds each year they use for projects. It is expected to better share resources, he added.
In 2007, Bergquist said there were a number of programs that had to be suspended for financial reasons, but over the past year a couple have been reinstated. One of those is the economic development program, which is a combination of the community access grants, the agri-business grants, and industrial park grants.
Prior to 2007, he said, it was about a $3.5 million program. Last year, a version of it was reinstituted, he said, and three eligibility categories were combined into one. Grants totaling $1.5 million were awarded to local entities to help with their road needs, Bergquist said.
Last fall, he said, $2 million in grants was awarded. But, there were 35 applicants totaling $7.1 million, so it is expected they will apply again.
“There is a significant amount of need out there,” said Bergquist.
The other local government assistance program they were able to implement last spring is the old 90-10 slot program, Bergquist said. This allows communities to trade federal highway funds for state highway funds, he said.
A lot of the needs were not necessarily on federal projects, Bergquist said, so “having state funds rather than federal funds gave them much more flexibility for projects off their federal aid system.”