Shifts in the state’s economy, both good and bad, have an effect on the Arizona Department of Transportation’s budget and ADOT’s ability to serve our customers. ADOT’s operating budget is appropriated by the State Legislature based on funds received from fuel taxes and other transportation related fees or taxes. So, a downturn in the economy directly affects how much money is available for highway construction, maintenance and Motor Vehicle Division services. When the economy changes, ADOT feels it.

Over the past several years, ADOT has been building freeways and state highways due to the tremendous growth in Arizona’s population. Even though ADOT’s budget is decreasing, the amount of highway lane miles ADOT must maintain has increased to nearly 28,500 total miles. In addition, ADOT’s Motor Vehicle Division must continue to provide vehicle title, registration and driver’s license services.

ADOT has also stepped up to the plate by contributing $295 million in the past year to help resolve the state’s budget crisis. Putting it all together, these budget impacts will reduce the ADOT budget by more than $130 million for this current fiscal year.

ADOT, however, is committed to responsible fiscal management and has taken aggressive steps to balance the agency budget. Measures to close ADOT’s FY 2009 budget gap include:

• About $100 million in reductions to funding programs, including suspension of a highway project-acceleration fund, and elimination of proposed MVD service centers and other building improvements.
• $47 million in operational reductions, including:
  • Hiring freeze (350 positions; 7 percent of workforce)
  • No overtime except for public safety activities.
  • Elimination of nearly all travel using ADOT funds
  • Grounding of the ADOT airplane
• Deferring highway maintenance
• Delayed heavy equipment replacement
• Reduced frequency of roadway sweeping, landscaping and litter pick up
• Halting all pavement preventative maintenance activities
• Suspension of the airport grant program for 2009 and 2010
• Most employees will be required to take eight furlough days by July 1. This equates to a 10 percent salary reduction.

In spite of the budget challenges, progress continues to be made around the state – including projects to be funded by the American Recovery and Reinvestment Act. The federal recovery program will send $522 million to Arizona for road and bridge projects. Another $95 million will be provided for transit, and the FAA will distribute funding for airports. Transportation officials estimate that the recovery program will help create thousands of jobs in the state.

ADOT is ready for the challenge to move quickly and cooperatively on the recovery projects, allocating the state’s $350 million portion of highway funds for projects around Arizona based on a process of collaboration with local planning groups. These projects will have a positive effect on our transportation system and our economy.

As much as ADOT feels the effects of the economy, the agency is part of the economy. ADOT operates as a partner to the private sector, and is the prime source of construction sector activity today. About 80 percent of every dollar ADOT receives is paid out to private providers (much of the balance is for employee compensation and related expenses), and gets recycled through the state’s economy multiple times.

Despite the fiscal challenges, ADOT is at work for Arizona, building stronger connections and helping improve our diverse transportation network