BISMARCK, N.D. (AP) — Declining oil activity is forcing North Dakota’s Transportation Department to make up for a more than $69 million projected shortfall in fuel tax collections, motor vehicle registrations and other fees, the agency’s director said Tuesday.
Transportation Director Grant Levi told the Legislature’s interim Transportation Committee that some planned road projects “probably” won’t get completed but did not give specifics. The department has identified several other cost-saving measures, including not filling about 20 positions and closing five of the state’s 28 rest areas.
Rest areas at Finnish, Germantown, Norwich, Pleasant Lake and Sykeston are set for closure, a move that will save the state about $70,000, agency officials said.
Levi said the state also was cutting its budget for temporary employees by $1.4 million, though he did not know how many employees it would affect.
The agency did its “best to manage the impacts,” Levi told lawmakers.
The cuts are unrelated to those it and other state agencies submitted last week to help close a more than $1 billion spending gap blamed largely on slumping oil activity. The department’s share of those cuts, which were mandated by Gov. Jack Dalrymple, total more than $26 million.
The Transportation Department is one of the state’s largest agencies. It has about 1,100 employees and a two-year budget of more than $2.8 billion, $616 of which comes from the federal government. Normally, the state chips in $1 for every $2 in federal highway aid it collects.
Its budget has more than quadrupled in the past decade mainly due to the explosion of oil development — and tax revenue — from western North Dakota’s oil-producing region. Levi told lawmakers that statewide traffic levels — including heavy truck traffic — in January fell to the lowest level since 2011, a result of slumping oil activity.
That means fewer dollars from fuel taxes and other fees to support its operations. Levi said the agency became worried that revenues would fall below projections last fall.
Cities, counties, townships and transit systems that get a share of the revenue also are getting about $31 million less than expected revenues due to declining oil activity, and those entities will choose where to make cuts, Levi said.
“Our partners are experiencing the same challenges,” he said.
Copyright 2016 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.