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Contractors say fund sweeps cost 42,000 highway jobs, want HURF reimbursed

Desperate times call for desperate measures, and at the Legislature, those measures have included sweeping money from state funds and agencies.

But now that the fiscal outlook is less bleak, some opponents would like the state to reimburse those funds.

David Martin, president of the Arizona chapter of the Associated General Contractors, is pushing for a bill next session that would halt any further sweeps of the Highway User Revenue Fund, and possibly force the state to reimburse the money that has already been swept.

Those sweeps, he said, have cost an estimated 42,000 jobs due to the lack of highway construction.

“Those are our members building Arizona’s highways, roads and streets. It’s our folks who build roads,” he said. “When you take away money that’s supposed to go to construction, that’s affecting their livelihood.”

HURF is funded through fuel taxes and other highway-user fees and taxes. The money is shared by the state, counties and municipalities to be used for road maintenance, improvements and construction.

But with the state facing staggering budget deficits over the past few fiscal years, the money has been diverted for other highway-related functions, such as the Department of Public Safety for highway patrol and the Arizona Department of Transportation’s Motor Vehicles Division.

Since fiscal year 2010, a total of $373 million in highway construction money has been lost due to those shifts, according to the Joint Legislative Budget Committee.

That means less money for construction projects, which means less work for contractors that the AGC represents. And Martin said he believes that money should be paid back.

“I would recategorize this issue as a debt — a debt to the taxpayers for infrastructure funding,” he said.

But House Appropriations Chairman John Kavanagh,

R-Fountain Hills, said that the swept HURF cash has been used for appropriate reasons. By using the money to help maintain highways rather than pay for new construction, the state was just trying to manage with what little revenue it had, he said.

“The HURF money that we spent, we still spent on road-related expenses,” he said. “That was money that was properly spent, so I don’t know what their beef is.”

So far, Martin says he hasn’t found a sponsor for the bill, although he’s talking to lawmakers from both parties. He acknowledged that it’s not likely that the swept funds from HURF would be reimbursed anytime soon, and certainly not in one lump sum.

But there may be an option for an incremental payback of the fund, or other more moderate measures.

“We have to make sure that whoever the sponsor is, they’re comfortable with whatever concept is driven,” Martin said.

Rep. Vic Williams, chairman of the House Transportation Committee, said he would be willing to consider sponsoring the bill, or at least helping to push it.

“I’ve always believed it was fiscally irresponsible for the state Legislature to take these funds,” said Williams, a Tucson Republican. “I very much would like to see a piece of legislation that would call for a state IOU to address revenue that has been taken from the highway fund.”

Williams said he believed that among constituents across the state, there would be support for any law to halt those fund sweeps.

That line of thinking appears to be validated by an October poll commissioned by the construction advocacy coalition We Build Arizona. Of 600 likely voters in Arizona, 69 percent said they disapproved of the HURF sweeps and 79 percent said the state should pay back that money once the economy improved.

Kavanagh said he believes there would be support, but said the bill was irrelevant, since there were no plans to make any additional fund sweeps next fiscal year.

Meanwhile, Sen. John Nelson, chairman of the Senate Transportation Committee, said that while he understood the frustration from Martin and others, the state needed to keep its options open when it came to managing the budget.

“It’s robbing Peter to pay Paul,” said the Republican from Litchfield Park. “The very thing they’re asking for is to take taxpayer money to use for their purposes at the expense of someone else.”

It’s true that fiscal forecasts are predicting a surplus for the next two fiscal years, Nelson said. But the state still has a long way to go before getting back on sound fiscal footing. Besides a looming cliff in fiscal 2014 due to the expiration of the education sales tax, the state doesn’t even own some of its own buildings, he pointed out.

And with more money comes more responsibility. He said that the Legislature will have to be judicious with how it doles out any extra cash it has.

“Everyone’s going to be coming down here with their hands out,” he said. “It’s going to come down to what we have and what we’re going to be facing in the future.”

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