AUGUSTA (AP) – A $594 million state highway budget that relies on fuel tax hikes starting in July received final Senate approval Monday and was sent to Gov. John Baldacci, who is expected to sign it.

There was no debate before the Senate voted for the budget covering state expenses for roads, bridges, state police, motor vehicles and other transportation services for the two years starting July 1. It’s funded to a large degree by excise taxes on motor fuels.

A law that passed last spring authorized indexing of gas and diesel fuel taxes to account for cost-of-living increases. A 2.6 cent-per-gallon increase to take effect this summer is factored into the highway budget that passed Monday, and the tax could rise by another half-cent in July 2004.

The current tax rates are 22 cents per gallon of gasoline and 23 cents for diesel fuel.

Before signing off on the two-year budget by a 31-1 vote, senators approved a related bill to update finances for the current fiscal year.

Supporters hailed approval as a go-ahead for the spring’s construction season.

“The green light is on,” said Rep. Ronald Usher, co-chairman of the Transportation Committee, adding that the spending plan represents thousands of jobs and tens of millions of dollars in construction spending.

“It’s economic development,” said the Westbrook Democrat.

Baldacci is expected to sign the budget documents into law, said the Democrat’s spokesman, Lee Umphrey.

One possible if unlikely glitch remained. A separate proposal, supported by only two of the Transportation Committee’s 13 members, seeks to repeal indexing while leaving a one-time gas tax increase in effect.

The exact amount of that increase remained in flux Monday.

Passage would force the Legislature to redo the whole highway budget, Usher warned. But he also said that the repeal provision faced an uphill fight because only two committee members supported it.

The bill would also need two-thirds legislative approval, he said.

Two other bills that propose to scrap indexing but provide no tax increase were killed by the committee.

Opponents of indexing see it is government by “autopilot” and say that each legislature should take responsibility for tax hikes it imposes.

AP-ES-04-07-03 1550EDT

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