Apr 182014

By Tammy Gray
Even with a state budget in place for the upcoming fiscal year, concerns continue over the distribution of Highway User Revenue Funds (HURF) that cities and counties, as well as the state, use to construct and maintain roadways.
The budget uses a new formula to distribute HURF monies among counties and the Arizona Department of Transportation (ADOT). Although the amount of money swept out of HURF to fund the Arizona Department of Public Safety (DPS) has been reduced, leaving more money for roadwork, the new formula directs extra money to urban areas rather than rural ones. It also leaves only a small portion for ADOT, the state agency that many rural areas rely on for road maintenance.
In the coming fiscal year, approximately $89 million in HURF funding will be swept out of the budget for DPS operations. That is less than the amount raided during the last two fiscal years, leaving a larger chunk for cities and towns.
The Arizona Rural Transportation Advocacy Council (RTAC) notes, “The last two years, local governments have had roughly $60 million of their HURF revenues raided each year. Three years ago, the number was close to $100 million. With the $30 million reduction in transfers, roughly half of which is provided to locals, and the additional $30 million appropriated, in a sense, the local funding raids have been reduced from $60 million to $15 million this year, a substantial reduction.”
While the reduction in raids is good news, RTAC cites serious concerns about how the legislature has decided to distribute funding. Changes to the distribution formula may make it easier for the state to redirect funds to certain agencies, counties, cities or projects in future years.
“While the additional $30 million for locals is a very positive development, the method and use of a new formula is a potentially dangerous precedent,” an RTAC legislative update report notes. “Not raiding the funding upfront and allowing it to be funneled through the established distribution allocation is far preferential to ‘backfilling’ it in this manner with a new formula, which is likely far more susceptible to annual legislative tinkering in the future.”
In addition, although distributing funds directly to counties and cities appears helpful on the surface, RTAC notes that cutting distributions to ADOT is harmful to rural areas.
“Obviously the state system is vital to rural areas. More often than not, state highways are also ‘Main Street’ for rural communities,” the RTAC report notes. “The state system also serves as the spine for freight movement, and its condition and capacity greatly influences our economic and job growth potential. Current funding trends suggest inadequate levels to maintain the existing system and just enough revenue to support one major new construction project per year for all of greater Arizona for at least the next 10 years.”