Eastern states still hurting from the recession have exceeded their budgeted funds for snow removal after being slammed by last week's snow storms and are applying for federal emergency relief. But the financial strains will not affect their debt service payments on outstanding bonds, according to a credit rating agency analyst and state officials.

Several areas in the mid-Atlantic broke snowfall records following back-to-back storms Feb. 5-6 and Feb. 9-10. Virginia, West Virginia, Maryland and the District of Columbia said they are finalizing cost estimates and are preparing applications to the Federal Emergency Management Agency for emergency funds.

Sources at state departments of transportation said the additional snow removal costs will come from maintenance funds.

Any debt service payments made by a state or state DOT would come first and would not be affected by the snow removal costs, according to Nicholas Samuels, an analyst covering the District of Columbia and Virginia for Moody's Investors Service.

State officials agreed, saying bond covenants require debt service payments to take priority.

However, the added costs will not help states' finances if they do not receive sufficient emergency funds from the federal government.

Virginia, which already faces a $2.2 billion budget shortfall in fiscal 2011 and 2012, had spent the $79 million it had budgeted for snow removal for the 2009 and 2010 winter by Feb. 1, Virginia Department of Transportation spokesman Jeffrey Caldwell said Tuesday.

VDOT has spent $25 million, the full amount of its emergency fund, he said.

A final tally of the costs from the February storm may not be available for weeks as municipalities add up their costs, said Robert Spieldenner, director of public affairs at the Virginia Department of Emergency Management. Once a clearer picture of the storms' costs are available, the state will apply to FEMA for aid, he said.

The White House announced Tuesday that Virginia will receive FEMA funds for a Dec. 18-20 snowstorm but an agency spokesperson said the total amount has not yet been determined. The state had submitted a $50 million application for the December storm, Spieldenner said.

The snow storms have hit Virginia as the state's transportation revenues have suffered amid the recession. VDOT's December revenue estimate for fiscal 2010 dropped by more than $85 million from the projection it had made in June.

"Here, the patient is bleeding to death and suffers another blow like this," said Jeffrey Southard, executive vice president at the Virginia Transportation Construction Alliance and a former VDOT assistant commissioner, referring to the snow storms.

Virginia plans in May or June to issue the first series bonds associated with a $3 billion transportation package that the state legislature approved in 2007, Caldwell said.

In Maryland, which is struggling with a $2 billion budget shortfall for fiscal 2011, the government had $60 million budgeted for snow removal after it spent $57 million prior to last week's storms, according to state DOT spokeswoman Erin Henson. She said initial estimates peg the storms' cost at $50 million.

Maryland applied for about $19 million of FEMA aid related to the December snow storm, but has not yet heard back.

The snowstorms have affected states on the revenue side as well. The Maryland Transportation Authority released traffic statistics from the December storm at two of its toll plazas: the Fort McHenry Tunnel on I-95 and the Francis Scott Key Bridge on I-695. Traffic was down by 8% and 27%, respectively, during the December storm compared to the same days in 2008. Figures are not available for the February storms, a spokesperson said.

States' sales tax revenue also could take a hit, but only in the short term, Samuels said.

West Virginia had $54 million budgeted for snow removal. As of Feb. 14, it had about $5 million remaining, according to the state DOT. West Virginia also applied for FEMA funds related to the December storm and expects to apply for federal funds for the February storms. West Virginia has a $120 million mid-year budget shortfall.

The District of Columbia — which is facing $104 million less revenue than projected for fiscal 2011 — had $6.2 million allocated for snow removal and has spent about $10 million, said Nancee Lyons, a spokewoman for the district's Department of Public Works.

U.S. Rep. Eleanor Holmes Norton, who chairs the House subcommittee with jurisdiction over FEMA and national emergencies, last week called for a presidential emergency declaration for the district, Maryland and Virginia.

A spokesperson for the Washington Metropolitan Area Transit Authority said Wednesday that preliminary cost and revenue loss estimates will be made at a finance committee meeting today.

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