The council receives subsidies from NZTA for Glenorchy Rd and Crown Range Rd - both of which are deemed "special purpose roads" and local roads.
The subsidies cover maintenance, including environmental maintenance; renewals; emergency reinstatement; preventive maintenance; and community activities, construction and planning.
In total, the council obtained $19.9 million from NZTA for this financial year - $2.6 million less than the requested $22.5 million.
The biggest cuts came from the maintenance section.
Figures released to the Otago Daily Times by the council show it asked NZTA for $418,822 for maintaining the Crown Range Rd this financial year. The NZTA approved $358,293, a difference of $60,500.
The council also received $3.796 million from NZTA for maintaining "local roads", $638,200 less than the requested $4.434 million.
Glenorchy Rd was the only one which was approved as requested, with maintenance funding totalling $468,919.
Over the next three financial years the council asked for a total of $68.702 million.
NZTA approved total funding of $60.983 million, a $7.719 million cut - maintenance received $2.387 million less than the $16.584 million requested, leaving a total maintenance allocation of $14.197 million.
Mr Geddes said the situation was even worse in the Southland District, which would lose $20 million over the next three years.
The Southland District had the longest roading network in the country, and its roads suffered because of the shift in traffic from "farm utes" to milk tankers.
"The case that we're going back to Government with at a local, regional and Otago-Southland [level] is cutting these types of budgets mean that a lot of capital works . . . are now being wasted. We can't maintain them properly - we are creating a financial time-bomb for some community in the future."
Mr Geddes said maintenance budgets needed to be kept around the estimates provided by local authorities - which were based on past years and lessons learned.
"I think it's extremely short-sighted to cut maintenance budgets.
"We can probably deal with less support for capital projects than maintenance."
