Federal highway funds dwindling to near nothing

Mississippi Business Journal, The, Sep 15, 2008

Federal highway administrator Tom Madison has informed the Mississippi Department of Transportation (MDOT) that effective September 8, the Federal Highway Administration (FHWA) will be delaying reimbursements to the states under the Federal Aid Highway Program, and likely will be able to distribute only partial payments of such claims in the coming weeks.

This is in response to a dramatic decline in the balance of the Highway Trust Fund, which had fallen to less than $1.4 billion in August as a result of an imbalance between reimbursement requests and revenue. Funded by the 18.3¢ federal gas tax, it is projected to run out of money by the end of the month.

MDOT executive director Larry L. "Hutch" Brown said, "Approximately 50% of MDOT's revenues for operations, maintenance and construction comes from these FHWA reimbursements. A potential decrease in monthly reimbursements from FHWA could drastically impact our operations as well as those of cities and counties, which receive federal aid funding through MDOT."

Percentage distributions will be made based upon the amount of claims submitted and the amount of cash on hand.

Madison indicated that because of the "dire consequences" of this cash shortfall, Secretary of Transportation Mary Peters and the Administration will urge that Congress immediately pass the House-approved Rangel bill (H.R. 6532) to transfer some $8 billion from the General Fund to the Highway Trust Fund. Senate Finance Committee leaders had attempted to move similar legislation before the August recess, and are expected to rekindle those efforts when Congress returns next week.

Brown said, "This is cause for concern for our state and our nation. I encourage everyone to contact their U.S. congressional representatives and senators and urge immediate passage of H.R. 6532 to fund the Federal Highway Program for another year."

The Associated General Contractors of America (AGC) applauded Secretary Peters' reversal of policy to support an immediate fix of the Highway Trust Fund.

"Unless Congress acts quickly to fix this shortfall, highway contractors will be forced to lay off workers at the peak of the construction season," said Stephen E. Sandherr, CEO of AGC.