CHEYENNE - State highway spending may not increase as dramatically as some transportation officials and policy makers had hoped.

Gov. Dave Freudenthal is calling for a $25 million increase for highway construction in his 2009-10 budget - a far cry from the $145 million WYDOT officials had asked for.

But Freudenthal, in a Wednesday news release, said more funding may be available later if state revenue projections improve.

Top lawmakers, meanwhile, said it may be time for a fuel tax increase to help pay for highways.

"This is not as much as proponents might have hoped, and the total should perhaps be revisited in the supplemental budget" in 2010, Freudenthal said.

The state highway system increasingly suffers from more traffic, higher costs and lower federal funding.

In response, the Legislature invested an additional $175 million from the general fund during the last two years - money that is now considered part of WYDOT's standard two-year budget.

Freudenthal's proposed $25 million increase would bring to $200 million the total general fund appropriation for highways during the two-year budget period.

"We are mindful of the challenge faced by the governor in balancing the state's budget, and grateful for his additional recommendation for surface transportation," WYDOT Director John Cox said in a written statement.

WYDOT officials had hoped for an additional $121.6 million for contract surface transportation projects, $8 million for maintenance work, $6 million to meet the required match for federally funded highway projects and $5 million for equipment.

Even that amount would have been well shy of the $250 million a year WYDOT officials say they need to fully maintain the state's highway system.

"The bottom line," said State Budget Director Mike McVay, "is more money may be available if state revenue projections improve."

The smaller-than-requested proposal from the governor could ignite support behind a proposed fuel tax increase when the Legislature meets in February.

The Joint Interim Transportation, Highways and Military Affairs Committee plans to sponsor a 10-cent-per-gallon increase spread over three years. The Legislature may also consider an increase in drivers license fees.

Committee Chairman Sen. Michael Von Flatern, R-Gillette, said a "user fee" is needed to care for highways over the long term.

He said WYDOT would do "wonderful things" with Freudenthal's proposed $25 million increase, but similar increases may not be available if the state economy sours.

"If our commodity prices drop in the next few years, that revenue is no longer there," said Von Flatern, who took over the committee when former state Sen. John Barrasso, R-Casper, resigned to serve in the U.S. Senate.

Similarly, state Senate President John Schiffer, R-Kaycee, and House Speaker Roy Cohee, R-Casper, said they'll take a serious look at the fuel tax increase bill.

Schiffer in a Wednesday telephone interview said it's important not to let the state's transportation system fall by the wayside.

And he said a stable funding source for WYDOT would promote critical long-term highway construction planning, which isn't possible under the current year-to-year system.

Schiffer also noted that out-of-state drivers would shoulder about half of a fuel tax increase.

"My gut feeling - and I have to go back and read the bill - is I'm pretty favorable to it," Schiffer said.

Cohee, whose own trucking company would take a hit from a fuel tax increase, said this could be the year to seriously consider a higher tax.

Cohee said it's tough to raise taxes, but he said a 10-cent increase would cost the average two-vehicle family around $150 extra per year - not extraordinary when one considers the overall benefit to the state highway system.

He also noted that Wyoming has one of the lowest fuel taxes in the nation.

It's critical, Cohee said, to maintain a highway system that businesses can rely on and families can travel without fear for their safety.

"At some point, the people of the state have to get earnest about paying for what they use," Cohee said.

Freudenthal's transportation budget also includes $10.2 million in general funds for airport improvements. State officials expect to attract an additional $46.1 million in federal and other funds for projects at local airports.

The governor recommended an additional $3 million to the state's air services enhancement program, making a total of $9 million available to support additional passenger air service agreements with commercial air carriers.

Freudenthal has promised to make his entire budget public by Friday.

Reach capital bureau reporter Jared Miller at (307) 632-1244 or at jared.miller@trib.com.