AUGUSTA – Double-digit increases in construction costs and changes in federal law have resulted in the Maine Department of Transportation deferring one-fifth of all of the projects it had proposed for the current two-year budget cycle, a total of $130 million worth of projects located in 140 communities across the state.

“This is a wake-up call,” Sen. Dennis Damon, D-Hancock, co-chairman of the Legislature’s Transportation Committee, said Monday after the panel was informed of the deferrals at a special meeting. “This will have a major, major impact on the state.”

Transportation Commissioner David Cole said the hurricanes that hit the Gulf Coast this fall have created a huge spike in the demand for construction materials from asphalt used in paving to steel used in bridges. In addition, he said, the continuing cost of construction is expected to be greater because of higher oil prices that greatly affect highway and bridge repairs and construction.

“Complicating all of this are the provisions in the new federal transportation law that will affect our cash flow,” he said. “We will be getting more money overall over the five years, but it will come at different times than we expected based on the expectations we had under the old law.”

The deferred projects affect communities from Fort Kent to Kittery and include road resurfacing and reconstruction in numerous towns – Ashland, Belfast, Charleston, Ellsworth, Gouldsboro, Houlton, Lincoln, Newport, Orono, Thomaston and Veazie, to name a few.

Proposed project postponements also affect Bangor byways, including the Burleigh and Griffin roads, Main and Ohio streets, and Mount Hope and Stillwater avenues. Plans to modify traffic signals at the intersection of Hogan Road and the southbound I-95 ramp at Exit 49 near the Bangor Mall also are being put on hold.

Design work for replacing a bridge over the Narraguagus River in Milbridge will continue, but construction has been deferred. Curb work to improve traffic flow along several streets in Caribou would be put off, as would repairs, upgrades or installation of signals at railroad crossings in communities including Bucksport, Fort Kent, Greenville, Pittsfield and Presque Isle.

Rep. Damon said the problem is broader than the recent disasters and the increased cost of oil. He said Maine and the United States are in a global economy and increased oil demand in China as well as the surge in construction there are being felt in Maine.

“This is not temporary,” he said. “This change in the world economy will continue to affect our ability to invest what we need to invest in our economy.”

Deputy Transportation Commissioner Bruce Van Note was peppered with questions from committee members about the rationale behind which projects are being deferred into the next two-year budget cycle of fiscal 2008-2009. (The current fiscal 2006-2007 budget cycle started on July 1, 2005, and ends June 30, 2007.)

“Just look at this deferral on Warren on Route 1,” said Sen. Christine Savage, R-Union, the senior GOP member on the Transportation Committee. “I consider this a public safety matter. Just a few weeks ago we had a three- or four-car pileup on this stretch.”

Van Note promised the committee further information on the crash history on that project and others that have been deferred. Rep. Ron Collins, R-Wells, criticized several projects that are going forward which he said are not essential.

“Look at this construction of a snowmobile bridge over Route 116 and these pedestrian and bike paths,” he said. “I quickly added up about $11 million in projects that I don’t see as essential.”

Van Note said some of the projects are required under the new federal transportation law. He said the DOT had to consider a number of factors in determining which projects go forward and which are deferred.

Existing contracts were not deferred, neither were projects specifically required by federal legislation.

Public safety was given a high priority, but it is tempered by whether a project has all necessary permits to proceed and whether the project is part of an ongoing improvement or a new initiative. He said projects already under way were given priority over new ones.

The project deferrals were spread across the state to try to be equitable, Van Note said.

Maria Fuentes, executive director of the Maine Better Transportation Association, said the deferrals would increase the more than $1 billion backlog of needed road and bridge improvements that already exists in Maine and would mean hundreds of fewer construction jobs in the state.

“We estimate 42 jobs for every $1 million spent on roads and bridges,” she said. “That’s a lot of jobs when you figure $130 million less being spent.”

Fuentes said the state needs to take a hard look at how it funds repairs and improvements to its transportation infrastructure. She said a smaller and smaller percentage of overall state revenues is going to what she calls the “backbone” of Maine’s economy – its road and bridge network.

“In the mid-’70s, we spent 26 percent of state revenues on transportation. Now it is 11 percent,” she said. “If jobs are a priority, if economic development is a priority, then we are going to have to look at shifting those [spending] priorities.”

Damon said the panel would look at alternative ways to fund projects and would review more closely the list of deferred projects when lawmakers reconvene in January.