CHEYENNE - Gov. Dave Freudenthal said Wednesday he cannot support a bill that would increase the gasoline tax by a nickel a gallon and offset the cost by a reduction in motor vehicle registration fees.

The Joint Interim Revenue Committee endorsed the bill Tuesday to raise about $34 million, most of it targeted at the state highway system.

"I don't, frankly, expect it to get to my desk," the governor said during his weekly news conference. "It is not a measure I would support."

He said all the legislators are doing is indirectly taking money from the state's general fund and putting it into highways. It would be better, he said, for the lawmakers to encourage members of the Joint Appropriations Committee to restore funds they cut from his governor's budget last week.

The committee cut the governor's request for highway construction and repairs from $162 million to $98 million. The committee also reduced his $15 million request for airport improvements to $9 million.

"We're running around talking about raising taxes when the real issue is having the political will to allocate these funds we have currently available to the immediate needs that exist," he added.

Freudenthal recommended taking the $180 million total for air and surface transportation from $200 million the Legislature appropriated last winter for transfer to the Permanent Mineral Trust Fund in 2007 and 2008.

The Joint Appropriations Committee members instead took the $107 million they are recommending for transportation from the state's general fund.

Freudenthal insists the Permanent Mineral Trust Fund is getting plenty of money now- $700 million for the current biennium - and will total $4 billion before 2010, which has been the goal of legislative leaders.

Joint Appropriations Committee members said they felt the need to cut the governor's budget requests in response to a preliminary report that current natural gas revenue projections are $100 million too high. They also said they wanted to save the $200 million in the permanent fund and objected to the governor tapping into that appropriation for his transportation package.

Freudenthal said he decided on an appropriation for highways because the Legislature has been unwilling to do anything about the caps it has placed on federal mineral royalties to the highway fund.

The Legislature, he said, still is focused on a battle over caps on mineral revenue streams that happened before he became governor. That dispute was between the lawmakers and the recipients of the money, including highways and local governments.

"This is not a state without resources. This is a state that has to step away from a lot of old fights about caps and who gets along with who," he said.

Making permanent the revenue streams to highways and local governments would be more rational and would save time on legislative debates over appropriations, he said.

Also among the millions of dollars of cuts, the Joint Appropriations Committee reduced aid to local governments from $150 million to $100 million. The committee also denied all $91 million requested for community college construction projects.

Legislators have agreed the logical place to train workers to meet the state's work force shortage is the community colleges, yet the committee did not make a decision to support that idea.

"If they have another way to address it, I'm fine with that, but my frustration is you can't just walk off, because that problem is real," Freudenthal said.

Capital bureau reporter Joan Barron can be reached at (307) 632-1244 or at joan.barron@casperstartribune.net.