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State waiting on Congress for Irene aid
MONTPELIER — Forty-five days after flooding damaged hundreds of roads and brought down scores of bridges, officials say they still don’t know how much it will cost to fix the state’s transportation system, or who’s going to pay for it.
“You are probably all wondering how much this is going to cost, and how we’re going to pay for it all, and you’re probably all hoping I’m going to answer those questions for you,” Lenny LeBlanc, director of finance and administration at the state Agency of Transportation, told a panel of House and Senate lawmakers Wednesday afternoon. “Well, I’m not.”
Transportation Secretary Brian Searles has pegged preliminary damage estimates on the state system at $500 million, and municipal officials say the cost to repair Irene-related damage to town roads will be several hundred million dollars more.
The final bill to Vermont taxpayers depends largely on an ongoing budget battle in Washington, D.C., where negotiations over transportation and disaster spending will determine the scope of federal aid available to states.
“I think the message to everyone needs to be that we need to urge Congress to act promptly,” LeBlanc said during a joint hearing of the House and Senate committees on transportation.
In a best-case scenario, according to LeBlanc, the federal government pays for 100 percent of the damage to state roads, and 90 percent of damage to municipal roads. Worst-case, he said, Vermont is on the hook for nearly 20 percent of the cost to repair the estimated half-billion dollars in damage to state highways, and the federal government picks up only 75 percent of cost to repair damage to municipal roads and bridges.
“I think we all know there are going to be costs in state transportation funds associated with this disaster that were not addressed in current fiscal year budget,” LeBlanc said. Due to the uncertainty federally, he said, “we don’t know quite how much that’s going to be yet.”
LeBlanc said the agency already has begun taking steps to address cash-flow issues associated with Irene-related repairs. Notably, transportation officials have redirected $37 million in federal formula funds that had been slated to go to other road and bridge projects.
LeBlanc said that won’t be a problem if Vermont enjoys a best-case scenario federally, which would supply the funds needed to backfill the redirected formula money. If Congress fails to provide optimal levels of emergency aid, LeBlanc said the flood damage will begin to disrupt the state’s regularly scheduled slate of transportation projects.
Thus far, he said, the state has already postponed advertising bids for interstate bridge projects in Milton and Windsor.
“The longer we have to use (federal) formula funds to cover those (recovery) costs, the more risk we have of our ability to deliver the transportation program that you all passed last session,” LeBlanc said.
State officials say answers could come as early as Nov. 18, when a recently passed short-term spending bill expires.
The Senate version of a pending transportation bill would see the federal government to cover 100 percent of all repairs to the state highway system. The House version does not contain similar language.
A Senate bill for FEMA funding, meanwhile, appropriates $6 billion in disaster relief, money that would improve the state’s chances at securing a 90-10 match for damage to municipal roads. The House version contains only $3.65 billion.
Rep. Patrick Brennan, a Colchester Republican and chairman of the House Committee on Transportation, made clear at the outset that Wednesday’s hearing was an “informational meeting only.”
“We don’t intend to get into money or any funding today,” he said. “The picture on that is still unclear at this point.”
But conversations about the use of bonds to fund Irene-related repairs are already under way. In a letter sent last week to Gov. Peter Shumlin and key legislative leaders, State Treasurer Beth Pearce detailed the options.
The Transportation Infrastructure Bond program, passed by the Legislature in 2009 and funded by a 3-cent tax on diesel and 2 percent on unleaded gasoline, could yield up to $83.5 million in debt capacity, Pearce wrote.
In the event that isn’t enough to cover the repairs, she wrote, she’s “prepared to conduct scenario analyses that contemplate increased … bonding capacity above the current $83.5 million.”
She said however that expanding debt capacity without compromising the state’s credit ratings would likely require “greater revenues derived from higher assessments,” i.e. an increase in taxes on gasoline and diesel.
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