Borrowed money fills highway fund

The Centennial Highway Fund was created as a way to finance statewide road construction projects.

But Utah lawmakers have at times treated it like a piggy bank or a cookie jar — a place to grab cash when the cupboards are bare.

Utah Department of Transportation officials say a total of $581 million in general-fund revenue has now been removed from the fund since its creation in 1997.

"Now, that doesn't mean the program's dead," cautioned UDOT executive director John Njord.

To the contrary, all of the Centennial Highway Fund projects — with the notable exception of two that have been delayed for non-financial reasons — are either completed, under way or on schedule for completion by 2007.

"The funding provided to us by the Legislature is just enough to continue on," Njord said.

Each time they've dipped into the 10-year fund, lawmakers have replaced the general-fund cash with borrowed money. Consequently, the amount of time needed to pay off the loans associated with the fund has continued to grow.

Now, according to UDOT, the earliest those loans could be paid off is 2017.

And the way things have gone during the Legislature in recent years, that pay-off date could be extended further.

During the 2003 session, lawmakers authorized borrowing up to $100 million to replenish the Centennial Highway Fund. Now, 42 percent of the $3.2 billion Centennial Highway Fund has been financed through bonding.

Lawmakers originally envisioned the Centennial Highway Fund as a 10-year construction plan. And UDOT says it's right on target to meet that goal, although the court-delayed Legacy Parkway and 11400 South/I-15 interchange may take longer.

Lawmakers created the fund in 1997 by raising the per-gallon gasoline tax by five cents as the primary method of funding. At the time, GOP leaders in the House, and some in the Senate, said they could pay off all the Centennial bonds within the 10-year life of the road plan.

But as federal contributions fluctuated and Utah's budget woes grew, legislators found the Centennial Highway Fund was a convenient piggy bank to raid. As more bonding replaced general-fund revenue, lawmakers gradually extended the amount of time they'd need to repay the loans.