ROAD PLAN SHORTFALL FOUND DURING REVIEW SOUGHT BY COMMISSION

Staff of the Missouri Highways and Transportation Department determined that the state's 15-year road plan would be underfunded during a progress review requested by the highway commission.

About $2.2 billion of the shortfall came from errors made by department staff in late 1991 and early 1992, when it drafted the plan. Another $2 billion shortage could come from changes in federal funding allocations and a change in state law giving counties a greater share of state gas tax money.

Lew Hancock, assistant division engineer for planning and development, explained Tuesday that they were asked to review the first three years of the program and project any changes.

Hancock said the study showed that after three years, the program was right on schedule, with $55 million more put under contract than anticipated with original estimates.

But as part of that review, two errors were found in original calculations.

Hancock said one mistake occurred when resurfacing costs that were projected for the 15-year plan covered just three years instead of 15 years, which reduced the projected needs by about $1 billion.

Another error occurred when drafters of the plan projected a 4 percent annual growth rate in maintenance costs, when a 6 percent figure should have been used.

Hancock said mistakes were made and the department is doing its best to correct them so there is an accurate accounting of revenues and costs of the 15-year plan.

"We flat missed it somehow," admitted Hancock, in explaining how the resurfacing costs were left out.

Cape Girardeau attorney John Oliver, vice chairman of the highway commission, said the department should be commended for admitting mistakes.

"They made two mistakes. What are you going to do about it except tell the truth," said Oliver. "I can assure you, none of the gas tax money has been wasted."

Hancock said one reason for the mistakes was staff had a short time to put all the numbers together as a plan was taken to the General Assembly to get their support for a phased in 6-cent gas tax.

"Through the meetings with legislative leaders, people wanted to adjust things. In trying to make all those adjustments, most of those at the 11th hour, it does not provide for a good orderly review," said Hancock.

He pointed out that originally the department had proposed a 10-cent gas tax hike, phased in at 2 cents per year for five years. But a compromise called for a 6-cent hike phased in over six years.

Hancock said most highway departments avoid proposing plans longer than five years because of the uncertainty of costs and federal funding. But Hancock said Missouri officials decided to move forward with a 15-year plan, recognizing that adjustments would need to be made.

"We think we would make different assumptions today than were made three years ago," said Hancock. "We intend to review the plan annually and there are certain trends we will watch closely."

He said one reason for increased costs of the 15-year plan is a decision by the commission to used heavier pavement with a life of 30-40 years instead of 20 years. That will add $300 million in costs over the plan, but will reduce maintenance costs in the long run.

Besides the current federal highway bill, Hancock said at least two other bills will be written during the life of the 15-year plan, which could alter federal funding. He said highway officials were poised to react to any changes and would do what it could to carry out the plan.

If funding continues to be short, ultimately projects would have to be cut, the time frame expanded, or additional revenue would be needed.

Besides monitoring costs and revenues annually, Hancock said the department is trying to do things as efficiently as possible and qualify for federal gas tax money other states are not able to match.

A real key is what happens with distribution of the federal gas tax money.

Hancock explained, for example, that a 2.5 cent gas tax imposed for deficit reduction, is scheduled to go into the highway trust fund Oct. 1. If that is done, more money will be available to the states.

In addition, there is another 4.3 cents collected for deficit reduction that could be earmarked for the trust fund in the future. If both taxes were put into the trust fund, Hancock said Missouri's share would be enough to erase the shortfall.