WASHINGTON — States could lose $768 million of highway funds this week and be forced to delay or cancel projects due to the failure of Congress to approve a short-term extension of federal aid to states, state officials and transportation advocates said Monday.
States stand to lose $157 million per day for highways alone, Larry “Butch” Brown, executive director of the Mississippi Department of Transportation and president of the American Association of State Highway and Transportation Officials, said at the group’s 2010 Washington Briefing here.
However, they may be able to keep projects afloat despite the loss of federal aid until “around Thursday,” Brown said.
Some states, including Washington, may have more leeway.
“We can last two weeks before I start getting nervous about whether we can” pursue planned projects, said Washington Transportation Secretary Paula Hammond. “We have a lot of state gas tax money in play, so our [bond funding] is pretty high.”
The House and Senate last week adjourned without approving any bill that would extend the federal government’s ability to send money to states for transportation projects beyond Feb. 28.
As a result, an estimated 4,000 federal employees in U.S. Department of Transportation agencies face furloughs. In addition, American Recovery and Reinvestment Act grants that are moving through the DOT are being processed manually.
States already have begun pulling back their transportation spending. Missouri canceled a request for bids on $60 million of projects, and the District of Columbia has halted a bridge project indefinitely.
At least one credit rating agency, Moody’s Investors Service, has contacted highway officials, concerned about debt-service payments on bonds that are backed by the now-endangered federal grants.
The timing of the crisis “could not be worse” for states, Brown said.