9/29/08-A crunch on available funding for road projects in South Dakota has officials there exploring what options might be available to ease a shortage of available dollars.
A special legislative committee met recently to discuss a potential $70 million shortfall for highway needs next year. The state has targeted $250 million to keep up with regular maintenance next year, but may only have $165 million available, Keloland TV in Sioux Falls, SD, reported.
Some members said they believe it is inevitable that taxes and fees will increase if the state, cities, counties and townships are to be able to keep pace with road needs.
Others said that the South Dakota Department of Transportation and local governments must make better use of their existing funds before more money is made available.
Data made available to the lawmakers showed that 36 percent of possible fuel tax revenues are diverted for such uses as Highway Patrol operations, snowmobile trails, the State Radio system and aeronautics projects, The Associated Press reported. The road fund could have had an additional $49 million a year ago.
Among the options brought up for consideration to increase funds is applying a sales tax on fuel, in addition to the per-gallon tax. Also a possibility is increasing a 3 percent excise tax on new and used vehicle purchases.
Any efforts to increase taxes must go through the full Legislature. A two-thirds majority vote of both chambers would be needed to raise taxes, not to mention the governor’s signature.
The panel came to no conclusions or consensus. They are scheduled to meet again after the November election.

8/13/08-In hopes of closing a road funding gap in South Dakota, lawmakers there are giving thought to applying a tax to drivers based on how many miles they travel in the state. Stopping the diversion of road funds to other budgets also is drawing attention.
The state’s tax applied to fuel purchases generated $121 million during the fiscal year, which ended in July. While it amounted to a 4 percent increase, a legislative panel studying highway funding said it doesn’t come close to meeting the state’s needs for roads.
State Rep. Shantel Krebs, R-Sioux Falls, said the practice of charging for miles traveled may work in South Dakota. The revenue source was tested in Oregon and other states also are taking a look at the results, she told The Associated Press.
Krebs said the practice of taxing drivers for each mile traveled would ensure that those who rack up the most miles pay more for wear and tear.
Advocates for the practice say that special devices could be installed in vehicles to gauge how many miles people drive. They say that something must be done to help pay for road work in the state because of the combination of fewer federal dollars available for states and escalating costs for road building materials.
About 75 percent of the state’s funding for roads comes from the federal government, but the future of those funds is in doubt. The federal highway fund is facing a deficit that could result in the state losing at least $70 million, if nothing changes.
The cost of construction materials, including asphalt, also continues to rise.
The panel is scheduled to meet in late September to review several options to generate revenue for road and bridge work. Any tax change that could emerge from the meeting would require a two-thirds vote in each chamber of the statehouse. The other option is to let voters decide the issue.