Oklahoma House of Representatives
February 27, 2004

By MIKE W. RAY
House Media Division Director
OKLAHOMA CITY -- Four proposals to provide more funds for maintenance of highways, roads and bridges throughout Oklahoma were considered recently by the state House of Representatives.

Two of the plans would schedule statewide votes on proposals to raise motor fuels taxes, and the other two plans would redirect existing revenues to specific transportation needs.

House Bill 2559 by Rep. Bill Nations is a legislative referendum that, if approved by Oklahoma voters, would raise the state gasoline excise tax by 7 cents, to 23 cents per gallon, and the diesel tax by 9 cents, to 22 cents per gallon.

(The state also collects a penny tax on gasoline and diesel that is deposited in an indemnity fund administered by the Corporation Commission for remediation of leaky underground storage tank sites.)

Analysts calculate that the higher rates would generate nearly $122 million more from gasoline sales and almost $61 million more from diesel sales, related Nations, D-Norman.

Based on formulas for allocating tax receipts, the $182.87 million would be divided among several transportation categories: a little over $4 million each for county roads, municipal streets, aeronautics, public transit, and for tourism and passenger rail service, and approximately $162.5 million for construction and maintenance of state highways and interstate highways.

A portion of the additional tax revenue would be placed in a "high-use county road" fund which would be created by an amendment to HB 2559 that was suggested by Rep. Frank Davis. A similar proposal two years ago by the Guthrie Republican passed the House but died in the Senate.

Davis' amendment provides that all 77 counties would be eligible to apply for the money. Criteria for tapping the maintenance fund would include:
* proximity of the applicant to counties that have a population of more than half a million;
* the applicant county's population grew at least 15 percent over the preceding decade;
* a particular county road has a high traffic count;
* the daily vehicle miles traveled in a county are at least 150.

The condition of rural roads has been "ignored by those in the urban areas" for years, Davis asserted. Many rural residents often have trouble transporting their children to school or driving into town to retrieve their mail at the post office, because they get stuck in mud when it rains, he said.

Statewide, Oklahoma has more than 85,000 miles of county roads and more than 15,000 county bridges -- approximately half of which need to be repaired or replaced -- records show.

According to the Association of County Commissioners of Oklahoma (ACCO), funding for county transportation programs in Oklahoma includes $20 million each year in federal aid for replacement of county bridges, which is matched with $5 million from the counties for bridge construction plus $1.5 million in county funds to pay engineering fees.

The federal government also allocates $6 million annually for county road paving projects; the counties match those funds with $1.5 million dedicated to paving and $412,000 for engineering fees, ACCO reported.

The gasoline and diesel tax receipts dedicated to county road maintenance are apportioned to the state's 231 county commissioner districts by a formula whose principal factors are population and county road miles; the funds are used to buy equipment, such as road graders and dump trucks; materials, such as gravel and asphalt; and to pay salaries of county road crews. Motor fuels taxes produced $119.6 million that counties spent on road and bridge maintenance in FY 2003, the Oklahoma Tax Commission reported.

Rep. Darrell Gilbert, D-Tulsa, expressed concern that Davis' measure would siphon off even more fuel tax revenue from state highway maintenance. Oklahoma dedicates some of its motor fuels tax receipts for public transit, railroad maintenance, for upkeep of municipal streets, for county roads and bridges, and to Indian nations for maintenance of roads on their tribal lands, ledgers reflect.

According to the Oklahoma Department of Transportation, one-fourth of the 12,266 miles of highway in this state need to be repaired or replaced, and nearly one-fourth of the 6,728 highway bridges in Oklahoma are structurally deficient or functionally obsolete and ought to be renovated or replaced.

The amended HB 2559 encountered some potholes but slogged its way through the House, 53-42, and was routed to the Senate for consideration.

A similar measure, House Joint Resolution 1050 by Rep. Wayne Pettigrew, would ask Oklahoma voters to raise the state's 16-cent gasoline tax and 13-cent diesel tax by 3 cents per gallon.

"For drivers who go through a 20-gallon tank of gasoline each week, on average, the increase would amount to 60 cents a week, $31 a year, for smoother, safer roads," the Edmond Republican said.

Pettigrew, a member of the House Committee on Transportation, stipulated in his legislation that all revenue derived from the increase would be used exclusively to repair and maintain existing roads and bridges. The measure also specified that funds generated by the levy would not affect current state funding levels for other transportation needs; the new revenues would be used "to enhance and not supplant"
current transportation funds, the resolution declared. Further, the 3-penny increase would expire after a decade unless Oklahomans voted to renew it.

Nonetheless, the House adopted an amendment that sent Pettigrew's plan to the junkyard in favor of an alternative offered by Rep. Jim Newport, R-Ponca City. The amendment would redirect more of existing motor vehicle tax dollars to state highways. Newport's plan would gradually increase, over a three-year period, the portion of motor
vehicle taxes that are allocated to the state highway construction and maintenance fund.

Beginning July 1, 2005, the first $5 million collected from state vehicle registration and license fees each month would be earmarked for highway construction and maintenance. The transportation share would increase to the first $10 million per month in 2006, and would reach a maximum of $15 million per month by July 1, 2007.

Newport, a member of the House Appropriations Subcommittee on General Government and Transportation, said that motor vehicle license and registration fees are expected to reach $564 million in the coming year. More than half of those funds are directed to non-transportation sources, such as wildlife conservation, the Oklahoma Law Enforcement Retirement System, municipalities and counties, public schools, and the
state's General Revenue Fund, he noted.

"When Oklahomans pay their tag fee, most think it goes toward our highways," Newport said. "Let's be honest and put those funds where they should be."

Newport said his legislation would allow the Transportation Department to eventually recapture $180 million in motor vehicle fees each year without a tax increase. "I'm challenging us to be better stewards of the state's money."

Pettigrew accepted the Newport amendment, and the House passed the revised HJR 1050 by a vote of 90-8. However, Pettigrew said afterward he intends to revive his proposal during negotiations in a House/Senate conference committee later in this legislative session.

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