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State lawmakers are being warned that rising gasoline prices could aggravate financial problems confronting the state Department of Transportation and New Mexico’s highway system.
The agency expects that as motorists cut back on their travel because of high gasoline prices, less money will flow to the state from New Mexico’s fuels taxes. Less fuel sold means less revenue to the state, based on per-gallon sold.
And that is already happening.
Taxes on fuels provide more than half of the revenue for the state road fund that pays for operations of the Transportation Department, which maintains and builds highways.
New Mexico already faces a transportation financing shortfall of a half-billion dollars and the department has put 29 state road construction projects on hold until more money is found to pay for them.
And guess where that extra money will come from?
Top department officials outlined other financial woes to the Legislative Finance Committee, including an $80 million gap in funding for a transportation package enacted last year for local government and tribal projects.
While the high oil prices help the state’s general fund with royalty payments, the high fuel prices are driving down consumption – and state highway revenue.
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