DOT: Maintaining state highways is top priority; construction and maintenance take bulk of highway funds

Chairman Wozniak convened the Appropriations - Government Operations Division committee when Mike Garrett, deputy director for the North Dakota Department of Transportation, reviewed the department’s budget priorities under the North Dakota Century Code and explained how federal and special funds are distributed.

Garrett said the department’s first priority under the cited statute is “the maintaining of the state highway system,” and argued that maintaining existing roads is less expensive than replacing them. He told the committee that the DOT’s budget is “very complicated,” with federal funds targeted mainly to the construction program and grants, while special (nonfederal) funds are distributed across programs including construction and road maintenance.

The testimony established the rough scale and distribution of funds: Garrett said special funds were “looking at 1,150,000,000.00, which includes the SIFT requests,” and that of that amount roughly $880,000,000 are specific to construction programs and road maintenance. He described nonfederal dollars as about 55% to construction and 22% to road maintenance; he said 93% of federal dollars go to construction.

Why it matters: those allocations determine whether dollars pay for routine services such as snowplowing and blade work or for new construction projects. Committee members pressed agency staff on how revenue sources feed the highway fund and on recent proposals to change revenue streams.

Committee questions and revenue details

Garrett and other DOT staff explained the highway-fund revenue mix. In testimony, Garrett said fuel tax receipts are a fixed piece of the formula and noted fuel taxes have not changed since the early 2000s while construction and maintenance costs have risen with inflation and greater vehicle fuel efficiency. He said the department receives portions of fuel tax and registration fees; in committee testimony he gave the distribution percentages as 23% from fuel tax and 61.3% of registration fees into the highway fund. He noted other special funds include the legacy fund allocation (he said $60,000,000 of a $100,000,000 legacy distribution goes into the state highway fund) and one-time Strategic Investment and Improvements Fund (SIF) requests.

On electric vehicles and fees, Garrett said electric vehicles pay additional registration fees but the committee testimony did not supply a consistent, definitive dollar amount for that fee. Garrett initially said he believed the fee to be $120, and shortly thereafter a voice in testimony referenced "$1.20," producing an inconsistency on the record; the committee requested the exact amount be provided later.

Federal matching and flex funds

Garrett clarified that federal discretionary and formula dollars primarily appear in the construction program and that the department uses special funds to match federal grants, with the exception of a portion of the flex fund (25% dedicated to non–oil-producing counties) that may not be used as a match for certain federal grants. He described which roads are federal-aid eligible: the interstate system, the state system, county major collectors and certain urban roads.

Rest-area/visitor-center authority in western North Dakota

Ron Henke, director of the Transportation, Logistics and Tourism (TLT) division, asked the committee to restore language that would authorize construction of a rest area/visitor center in western North Dakota, in the Painted Canyon/Badlands area between Beach and Dickinson. Henke said the National Park Service currently owns a Painted Canyon rest area that must close seasonally because water and sewer lines freeze; he said the DOT is seeking year-round service and is willing to partner with the Park Service. Henke told the committee the department would use regular highway/flex funds for construction rather than a separate appropriation and that locations without existing exit ramps would require additional ramp construction.

Committee disposition

Chairman Wozniak closed the committee’s review of DOT (agenda item 2012) after the staff presentation and questions; the committee recessed to await the chairman’s return and to consider SB2020 later in the session.

Quotes in context

"The first and foremost is the maintaining of the state highway system," Mike Garrett, deputy director for DOT, said when describing statutory priorities.

"We've been focused between Beach and Dickinson because we really don't have one there," Ron Henke, director of TLT, said describing the area under consideration for a west-side rest area or visitor center.

Ending

The committee agreed to provide follow-up information on several outstanding items (exact electric-vehicle registration fee amounts and a list/average of projects funded under the legacy/flex process) and closed DOT business for the day.