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state failed to transfer proceeds of the motor vehicle excise tax from the general fund <br />to the highway user fund or to provide an alternative funding source for state, county, <br />and local roads and transit. This failure is expected to result in less road maintenance <br />and construction and increased local costs. It is hoped that the administration and <br />legislature will act during the 1988 legislative session to provide additional transporta- <br />tion funding. <br />The recent experience with wastewater treatment and transportation funding is <br />compelling evidence of the need for the state to evaluate its long term role in provid- <br />ing financial assistance in the public works and infrastructure areas and to make a <br />commitment that eliminates the rapid and extreme swings in assistance programs. <br />Pay As You Go State Government Costly To Cities <br />Like other levels of government, including cities, the state has over the past <br />several years increased many of its application, license, and user fees in an attempt <br />to increase its revenue sources and lower its reliance on tax revenues. <br />Many of these fees have risen significantly and increased the fiscal pressure on <br />cities. One example is air and water quality permit fees. Cities paid $750,000 for water <br />quality permits in 1987, usually for the operation of central sewage treatment facilities. <br />In 1988, that amount is estimated to soar to $1,068,622. While the irtireased revenues <br />from these fees will relieve pressure on the state general fund, the shift to cities and <br />other permittees which is required to generate the target fee revenues will result in <br />an average 74% fee increase per city. <br />13 <br />