PIERRE - State and local officials told a legislative study committee Thursday that the revenue outlook for road maintenance and construction is not good, and the condition of roads across South Dakota will deteriorate without extra funds.

Most money for highway projects comes from the federal government, but future prospects for that funding are uncertain.

"Both in South Dakota and across the nation, we are facing a crisis in maintaining and building highways," said Darin Bergquist, state transportation secretary.

The state fuel tax and the excise tax on vehicle purchases account for the bulk of non-federal money that's spent on roads in South Dakota.

But high gasoline and diesel fuel prices have taken a toll on those revenues as motorists cut back on the miles they drive.

Fuel tax revenues had been holding their own until falling a whopping 38 percent last month in South Dakota, Bergquist said.

"It seems that $4-a-gallon gas has been kind of the break point," he said.

Bergquist said people have historically driven more miles with each passing decade. The recent reduction in driving marks the first time that miles traveled have declined, he said.

A loss of fuel-tax revenues compounds the shortage of federal money for road projects, he said.

Money has become so tight that the Transportation Department is focusing on maintaining highways rather than improving roads or building new ones, Bergquist told legislators.

"We are in preservation mode," he said.

The revenue shortfall has been coupled with highly inflationary costs of road projects in recent years, Bergquist said. "We have seen unprecedented increases."

Although federal highway funding has doubled since 1993, inflation has far outpaced the extra money, he said.

Nearly 80 percent of state highways are in excellent or good condition, most of the rest are fair, and only 3 percent to 4 percent are in poor condition, Bergquist said. But he said no change in federal funding could lead to 19 percent of state highways slipping into poor condition by 2020.

Bergquist said his agency would provide the Legislature's interim Highway Needs and Financing Committee in September with options to increase revenues for highways.

Cities, counties and townships also have unmet road needs, he said.

Increased federal funding is crucial for South Dakota to properly tend to highways, Bergquist said.

Federal highway funds of $216.5 million have been allocated to South Dakota for next year, and $171 million of the total will go to the state system of highways and bridges, he said.

The federal trust fund for highways is projected to be $5.3 billion in the hole next year, he said. That could result in a $130 million loss of federal road funds in South Dakota, Bergquist said.

Because of its rural nature and small population, South Dakota may be the most dependent of all states on federal highway money, he said.

The state is responsible for 7,848 miles of highways. There are 36,672 miles of county roads, 4,059 miles of city streets and 32,410 miles of township roads in South Dakota. Although the state highway system makes up just 9 percent of total mileage in South Dakota, 69 percent of the 8.5 billion miles driven by motorists in 2006 was on state highways.

Rep. Gordon Pederson, R-Wall, said the state road system is 30 years behind actual needs because of inadequate funding. Much of the blame lies with the federal government, he said.

"The U.S. government doesn't do anything unless it's a crisis," Pederson said. "We have a crisis in transportation."

Pat McElgunn of the Rapid City Area Chamber of Commerce said it's unlikely Congress will provide the highway funds that will be needed in the future. He suggested that the state and local governments will have to come up with the needed revenues.

The state fuel tax on gasoline and diesel fuel is 22 cents a gallon and has not been changed since 1999. It is 20 cents a gallon on the traditional ethanol-blend of gasoline.

South Dakota's fuel taxes are in the middle of all states. The gas tax ranges from a low of 7.5 cents a gallon in Georgia to a high of 32 cents in West Virginia.

Rep. Jim Putnam, R-Armour, said it's interesting that gasoline sells for virtually the same price everywhere in the nation although state taxes on it vary widely.

"It's been mystifying to me," he said, suggesting that South Dakota motorists may wind up paying no more for gas than motorists in other states if the fuel tax is raised in South Dakota.

Putnam also said legislators should explore the idea of issuing state bonds to borrow money for highway construction and repairs.

Fuel tax revenues through the first 11 months of the current fiscal year, which ends June 30, totalled $112 million. That was $1 million more than the amount collected in the same period last fiscal year, but it was $4 million less than 2004.

The 3 percent excise tax on vehicles brought in $56 million in the first 11 months compared to $51 million a year ago.

Deb Hillmer, state motor vehicles director, said it may be time to look at a new system of funding roads in South Dakota.

She said it may be wise to base vehicle license fees on their weights and the number of miles traveled.

Hillmer noted that road damage is caused by vehicle weights and the amount of use, although vehicles are now taxed on the basis of age. Motor-vehicle licensing fees of $60.6 million were collected last year in South Dakota, she said.

Hillmer said 58.5 percent of license-plate fees are kept by the state, and the remainder goes to counties for road needs.

Thirty-eight of the state's 66 counties also collect a wheel tax of up to $4 per wheel on vehicles licensed each year. The wheel tax raises about $8 million annually.