DATE: Tuesday, November 18, 1997            TAG: 9711180251

SECTION: LOCAL                   PAGE: B7   EDITION: FINAL 

SOURCE: ASSOCIATED PRESS 

DATELINE: RICHMOND                          LENGTH:   70 lines

REPORT: ROAD FUND RUNNING ON EMPTY PREDICTED SHORTFALL ASIDE, GOV. ALLEN'S ADMINISTRATION DOESN'T WANT A TAX HIKE.

Virginia faces a $2.1 billion to $4.1 billion annual shortfall over the next 20 years to build and maintain its roads, ports, rail lines and airports, according to an interim road-funding report.

The commission that authored the study, however, did not discuss Monday how to close that shortfall, which might include raising the state's 17 1/2-cent-a-gallon gasoline tax. The gas tax makes up 42.5 percent, or $692.6 million, of the $1.63 billion the state expects to collect in 1998 for transportation construction and maintenance.

``We're going to deal with revenue,'' promised Del. William Robinson, D-Norfolk and chairman of the Commission on the Future of Transportation in Virginia. However, in the next breath, Robinson said, ``It isn't likely we can do something.''

The commission did agree to ask the General Assembly to establish a permanent Transportation Commission made up of key legislators and citizens, which Robinson said was a better forum for discussing any tax increase.

The Allen administration opposes raising taxes, and Secretary of Transportation Robert Martinez took issue with some of the commission's numbers.

He said the report failed to include several other sources of money, including public and private debt, that could cut the shortfall. In addition, Martinez predicted that highway-funding legislation currently before Congress could add an additional $500 million annually to the state's road fund.

Martinez also said the report's prediction of costs over the next 20 years may be inflated, and that several high-cost items, such as a third bridge-tunnel for the Tidewater area and a Western Corridor in northern Virginia, could be built in phases that would spread costs beyond the 20-year period.

Increasing taxes, Martinez said, was not an acceptable option.

``I think the overall impact on our Virginia economy and our comparative competitive position vis-a-vis neighboring states would be just detrimental,'' Martinez said of any tax increase.

Though most commission members were reluctant to discuss any revenue increase, they closely questioned Martinez about a coming shortage in the state's road maintenance fund.

Road money is divided between construction and maintenance and operations. Currently, 36.5 percent ($594.4 million) of the $1.63 billion goes to new construction, while 63.5 percent ($1.04 billion) goes to maintenance and operations.

Within the next three or four years, the state will have to move money from construction to cover growing maintenance and operations costs.

Martinez called the matter an accounting issue. With construction funding increasing, ``It's not as if we are reducing construction to take care of maintenance needs. I can't get excited about this when we are growing our construction (funds),'' he said.

Not everyone on the commission was willing to let the tax increase issue rest.

John Milliken, secretary of transportation under former Gov. L. Douglas Wilder, said that even taking the lowest shortfall figure of $2 billion and supposing that half the projects were not done, that left a $1 billion annual shortfall. A $500 million annual increase in federal funding would still leave a shortfall of $500 million a year.

``The gas tax is not growing as fast as the economy. . . . This is the future of transportation: Will our revenue meet our long-term needs? I think not,'' he said.

The commission is expected to approve a final report at its Dec. 10 meeting.

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