DALLAS — States may see a cutback in federal reimbursements for highway and transit projects as early as June unless Congress passes a multiyear transportation bill by the end of May, Transportation Secretary Anthony Foxx said Wednesday at a hearing held by the House Transportation and Infrastructure Committee.
"Without a bill by May, we will be notifying states sometime in June of our cash management procedures, which will mimic what we did last time," Foxx said.
"It's important to get something done right now," he said.
The 10-month extension adopted by Congress last year of funding under the Moving Ahead for Progress in the 21st Century Act (MAP-21) will expire May 31.
Before the extension was approved, the Transportation Department said it could be forced to cut reimbursements to states by 28% and make the payments once a month rather than daily. The procedures were set to go into effect if the cash balance in the roads portion of the Highway Trust Fund dwindled to $3 billion and the transit portion fell to $ 1 billion.
The curtailments never occurred, but Foxx said they could be back unless a new, fully funded transportation bill is in place before June.
Arkansas and Tennessee have already postponed projects that were to begin in 2015 over uncertainty of federal funding, he said.
"I can assure you that transportation departments in all the other states are scanning for project lists for ones that can be delayed and deferred," Foxx told the lawmakers. "May is actually late in the game and most will have to make decisions before then."
The 2014 extension kept federal transportation dollars flowing with an $11 billion infusion into the Highway Trust Fund because expenditures outpaced revenues from dedicated federal gasoline and diesel taxes.
Passage of a multiyear transportation measure is one of the committee's top priorities in 2015 and a top priority for congressional leadership, said Rep. Bill Shuster, R-Pa., chairman of the panel.
"Everybody's talking about a long-term bill," he said.
President Obama's proposal for a six-year, $478 billion transportation bill includes $430 billion of one-time revenue from a mandatory, one-time 14% tax on corporate offshore earnings and $437 billion from the fuel taxes. Other funding proposals include a higher gasoline tax and variations on the offshore earnings tax, but Shuster said a funding solution is not a responsibility of the committee.
"A bill that is not fiscally responsible simply will not pass this Congress," he said. "I am confident that, working with leaders in House and Senate, the Ways and Means Committee, and others, we can figure out the funding issues."
Finding the funding will be the hardest part of reaching consensus on a transportation bill, said Rep. Don Young, R-Alaska.
"We're like a bunch of dogs circling around a skunk," Young said. "Kill the skunk. If we don't, we're in deep doo-doo."
Rep. Reid Ribble, R-Wis., said 285 lawmakers have so far signed a letter that he and three other representatives are circulating that urges House leadership to pass a multiyear highway bill before May 31.
The president will soon unveil a revised version of the Grow America Act he proposed in 2014 with two more years and a higher level of transportation funding, Foxx said. The earlier bill provided $302 billion over four years.
"We must take care of the systems we have, and we must build new things," he said. "We need to step beyond where we are, and go big."
The administration is willing to listen to other funding options but thinks the corporate tax reform is the best solution, Foxx said.
"We've put our cards on the table," he said.
In a conversation on Twitter social media after the hearing adjourned, Shuster rejected suggestions that the federal government get out of transportation funding and leave it to the states, a process known as devolution.
"60 years ago the states had the responsibility & we were unable to build a national transportation system," Shuster tweeted.
