AUGUSTA — Reduced state spending for road and bridge improvements in the next two years is raising concerns about needed upkeep and higher costs in the future.

The Maine Better Transportation Association, a 700-member group representing contractors, engineers and others, released a report last week detailing the “good, bad and ugly” results of the recently completed legislative session.

It praised lawmakers for adding about $3 million a year for aviation, rail, transit and other nonhighway needs.

It lauded the designation of proceeds anticipated in the state’s renegotiation of its wholesale liquor distribution contract for transportation needs. The allocation could be as much as $7 million per year starting in 2014.

And it said that 600 miles of roads each year will get surface treatment, the “skinny mix” paving that is a temporary fix for the state’s worst roads.

But with no borrowing approved by the Legislature and no plan to replace falling gas tax revenue, the industry association is raising red flags.

“It’s an interesting juxtaposition between what was going on in the prior administration,” said John Melrose, a former state transportation commissioner and an advisor to the association. “There was very, very heavy reliance on borrowing, and you get to this circumstance, and you fall off the cliff with no borrowing.”

In his budget address in February, Gov. Paul LePage said he would support no new borrowing this year. In turn, lawmakers delayed any action on bond proposals until next year.

Transportation Commissioner David Bernhardt said the state borrowed too much for transportation in recent years, including more than $300 million in the last two-year period.

“That’s 25 percent of the total program,” he said. “That’s just unsustainable. … This biennium, we are going to be paying interest and principal of $75 million.”

Bernhardt said the current work plan “stretches the dollars” with lower-cost treatments and by working with cities and towns to share costs for work on state roads. Also, the state is getting bids 20 percent lower than estimates and getting offers from multiple bidders, freeing up money for other projects.

Maria Fuentes, executive director of the Maine Better Transportation Association, said the state should be making investments now to take advantage of hungry contractors and engineers, who will do the work for less.

“They are seeing a lot of bidders, even on small projects,” she said. “Why wouldn’t we take advantage of that? Our concern is, moving forward, it just gets us further and further behind” if road work is delayed.

She criticized the Department of Transportation for shifting money from long-term projects to short-term maintenance paving, saying it will just cost the state more in the long run.

“You know why they do it — because it’s less expensive than actually fixing the road,” she said. “They’ve got to do something so the road won’t fall apart.”

The current two-year highway fund budget, which is separate from the state’s general fund, is $988 million, down from $1.23 billion in the last two years. The highway fund is supported primarily by a 30-cent-per-gallon tax on gas.

Bonding accounted for 25 percent of the budget in the last two years; it’s 5 percent in this budget. A $55 million bond that already has been approved will go toward bridge work in the current budget, Bernhardt said.

The transition from one administration to the next, the uncertainty of federal funding, and gas tax revenue that is expected to keep declining because of more fuel-efficient cars mean it’s time for Maine to consider other ways to pay for roads and bridges, said Sen. Ron Collins, R-Wells, co-chairman of the Legislature’s Transportation Committee.

The state must examine its budget priorities so that transportation needs are funded, at least in part, by the general fund, he said.

“A $6 billion budget should be ample for any state of our size to maintain services we provide through the revenue we raise,” he said.

Melrose, who was transportation commissioner under independent Gov. Angus King, said most states provide some funding for transportation from general-fund revenue. While the national average is more than 17 percent, Maine will provide no money from its general fund for transportation in the next two years.

If the general fund contributed to Maine’s roads and bridges at the national average, that would represent $104 million a year, he said.

LePage did propose an initial allocation of $20 million, which he later cut to $10 million. By the time the budget was approved by lawmakers, the amount was zero.

“I think there were a lot of folks in the Legislature who felt that the priorities were going to be different this time and … Maine was going to follow the lead of many other states and use general fund money more regularly and consistently for highways,” Fuentes said.

Just getting transportation in front of the Legislature’s Appropriations Committee was an important first step, Bernhardt said. And while there’s nothing from the general fund in the next two-year period, he cited additional money in the future from sales tax collected on car rental fees ($3.1 million) and the liquor contract ($7 million).

“That’s $10 million a year over 10 years,” he said. “That is something continuous that we were not receiving.”

Also, Bernhardt said, he will continue to work with lawmakers to reconfigure funds now shared with state police based on time they spend on traffic enforcement.

The state’s highway fund now pays 49 percent of traffic-related state police costs. Legislation that nearly passed this year called for 33 percent, which would have left an additional $8 million for transportation.

Relying on the state’s general fund — which supports schools, human services, higher education and all other state agencies — to cover transportation costs isn’t realistic, said Sen. Bill Diamond, D-Windham, a former co-chairman of the Appropriations Committee who now serves on the Transportation Committee.

“There should have been a bond package,” he said. “That was the biggest failure of the highway budget.”

The state missed out on federal matching funds by not borrowing, and lost an opportunity to create jobs, Diamond said.

Even if lawmakers agree on bonds next year, and if they are approved by voters in June, it will be too late for next summer’s construction season, Melrose said.

Susan Cover — 620-7015

[email protected]