Appropriations committee advances DOT budget; bill moves with new gas tax, Highway 85 bonding and reworked flex fund

Senate Bill 2012, the budget for the Department of Transportation (DOT), cleared the Appropriations Committee on a voice/roll call vote after the committee adopted an amendment and then voted to report the bill as amended. Representative Brandenburg carried the bill and spoke at length about funding buckets, program changes and how the proposal would shift revenue streams to stabilize state transportation funding.

The measure reconfigures a previously proposed “prairie dog” bucket into a flexible transportation fund, increases the legacy earnings distribution, authorizes $155 million in bonding for work on Highway 85, and includes a 5-cent increase in the state gas tax that sponsors estimate will generate about $70 million annually for transportation purposes.

Why it matters: The bill changes how oil-related and other transportation revenue is distributed among the DOT, counties, cities and townships; it explicitly funds a federal grant match that sponsors said is required to secure certain highway grants, and it authorizes bonding and spending that supporters say are needed to keep multi-year projects, including NEPA approvals, viable.

Key provisions and committee discussion

- Gas tax increase and revenue flow: The bill adds five cents to the gas tax. Sponsors estimated the increase will produce about $70 million in new revenue, with distribution changes that direct a portion to the DOT, counties, cities and townships. Speaker Robin Weiss said the change was intended to stabilize a variety of transportation revenue buckets and noted the state had not raised the gas tax since the late 1990s. "You have 5¢ gas tax that goes into the distribution fund generate $70,000,000 of new revenue," Weiss said.

- Flexible transportation fund and distributions: The package converts a prior $400 million “prairie dog” bucket into a $370 million flexible transportation fund and a broader set of buckets. Representative Brandenburg and staff walked the committee through percentage splits tied to the new fund. Sponsors cited the need for certainty because the prairie dog pot had historically been volatile. The…