Foxx: No Reimbursements From HTF After May 31 Absent Extension

DALLAS - All federal transportation payments to states will come to a stop on June 1 unless Congress extends the short-term fix to the Highway Trust Fund before it expires May 31, Transportation Secretary Anthony Foxx said on Monday in a letter to state transportation directors.

"Unlike last summer's shortfall when states faced the prospects of delayed payments under a lapse of authorization, reimbursements on all projects will be halted completely, not simply delayed," Foxx said in the letter.

"For all intents and purposes, federal support for highway infrastructure programs will stop," he said.

Foxx said the reimbursements to states will come to a halt because the Federal Highway Administration won't be able to process construction invoices from the states for reimbursements for money they have already spent on highway and transit projects without a reauthorization of the 2012 highway law, Moving Ahead for Progress in the 21st Century or MAP-21.

"FHWA will be forced to furlough non-essential employees and will therefore be unable to process obligations or reimbursements requests, or provide technical support to projects," Foxx said.

No new state projects will be authorized after May 31 without a new transportation bill or another extension, he said.

"FHWA will not have the authority to provide states with any additional contract authority for new projects," Foxx said.

Foxx's warning is back-tracking from statements the Transportation Department made in recent weeks that cash balances in the HTF would be sufficient to keep the reimbursements flowing through June without another patch of the fund's solvency. That would allow a so-called clean extension, which could be accomplished without transferring money from the general fund to the HTF.

Last year the department said reimbursements to states would be cut by 28% and delayed if the HTF balance fell to $4 billion. The cutbacks were averted in late July 2014 when Congress approved an extension of the HTF through May that required a $10.8 billion transfer to the HTF from the general fund.

Senate Finance Committee chairman Sen. Orrin Hatch, R-Utah, said last week that a month-long clean extension would give the committee enough time to find $11 billion of revenue to offset the cost of extending the HTF through the end of calendar 2015.

Sen. James Inhofe, R-Okla., chairman of the Senate Environment and Public Works Committee that will shape the Senate transportation funding plan, said he would be agreeable to an extension through 2015.

Foxx criticized congressional inaction on a multiyear transportation bill earlier on Monday at a transportation infrastructure forum sponsored by Bloomberg Government.

"The challenges we face are real," he said.

"If this extension goes [away] without being pushed forward in some way, we will not have the ability to spend the dollars we do have to support this nation's infrastructure," Foxx said. "It is that serious."

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