DALLAS — States have canceled or deferred almost $800 million of highway projects and have put another $1.8 billion on the chopping block as the federal transportation funding law is set to expire in 67 days.
Federal reimbursements for state road, bridge, and transit projects are being reduced and delayed as Congress fails to move toward extending the Highway Trust Fund solvency's beyond the May 31 expiration of the latest funding extension, the American Road & Transportation Builders said in a report.
On Tuesday night, Senators voted 45 to 52 against a budget amendment offered by Sen. Bernie Sanders, I-Vt., the ranking minority member of the Senate Budget Committee, which would have provided $478 billion of federal transportation funding over the next six years by closing a loophole that allows corporations to keep offshore earnings in overseas tax havens.
The Transportation Department said it will begin limiting disbursements to states from the HTF when the cash balance in the highway portion of it hits $3 billion and the transit account's balance falls to $1 billion.
Four states have put projects totaling $779.7 million on hiatus while transportation officials in nine others have publicly expressed concern that $1.8 billion of their projects are in jeopardy over lack of progress in Congress on a multiyear transportation bill, ARTBA said.
Arkansas, Georgia, Tennessee, and Wyoming have canceled or delayed projects and Colorado, Connecticut, Mississippi, Montana, Nebraska, Nevada, Pennsylvania, Vermont, and West Virginia are considering similar actions, said ARTBA president Peter Ruane.
"The continued uncertainty with the Highway Trust Fund has real world, negative impacts as state governments begin cutting back on their construction plans because they don't know if the funding will be there to pay the bills a few months from now," Ruane said. "This, in turn, prevents private sector companies from hiring workers and making major capital investments."
Georgia Transportation Commissioner Russell McMurry said earlier this month that 329 projects totaling $715 million, some of them still in preliminary planning stages, would be delayed because of federal funding concerns.
"We have to spend Georgia's dollars first and send the bill to Washington to get reimbursed," he told a group at the University of North Georgia. "We have to sort of pay it forward and we're not able to."
Arkansas highway director Scott Bennett said 61 road and bridge projects have been removed from the state's 2015 construction schedule.
"If you stop and think about the economic impact this has, not only on construction jobs but the lost commerce that results in each local area because construction isn't taking place, then you begin to understand the trickle-down effect," Bennett said.
ARTBA expects more states to defer or delay projects as the HTF deadline gets closer, Ruane said. Reimbursements from the HTF are the source of 52% of all highway and bridge capital investments by state governments.
"This is one of the most easily avoidable crises because Congress has known the May deadline was coming for about eight months," he said. "Yet, here we are again flirting with another economic meltdown in the peak of the construction season."
The HTF is structurally insolvent, with expenditures from it exceeding dedicated revenues from federal gasoline and diesel taxes by about $13 billion a year. Extending the HTF's solvency through May required a general fund transfer of almost $11 billion last year, and another $10 billion will be needed to keep it solvent through the end of fiscal 2015. Since 2008, some $65 billion has been transferred into the HTF from the general fund and other sources
The Senate Republican fiscal 2016 budget resolution introduced by Budget Committee chairman Mike Enzi, R-Wyo., directs Senate Finance Committee chairman Orrin Hatch, R-Utah, to develop a plan for restoring the HTF's solvency, but doesn't include any specific instructions.
The House Republican budget resolution recommends Congress reduce HTF expenditures to match revenues from gasoline and diesel taxes. That would reduce federal transportation spending from $53.7 billion in fiscal 2015 to $39.6 billion in fiscal 2016.