Arkansas Highway Officials Warn Of Federal Funding Shutdown On May 31

Arkansas State Highway and Transportation Department (AHTD) officials said that they received word Monday from U.S. Secretary of Transportation Anthony Foxx that federal transportation funds for projects across the state will expire at the end of the month.

“We knew this would happen if Congress did not take appropriate action in time,” said AHTD Director Scott Bennett in a news release on the department’s website. “Although we have been preparing for reductions or delays in Federal-aid reimbursements, we now have to consider the impacts of a complete FHWA shut-down.”

In a letter by Foxx addressed to Bennett and other state DOT officials across the U.S., Foxx outlined how the Federal Highway Administration (FHWA) will be unable to make new obligations of Federal-aid funds to the states.

“Unless Congress acts prior to this date, the Federal Highway Administration will be unable to make any new obligations of federal-aid funds to your department’s highway projects,” Foxx warned in the May 11 letter. “Unlike last summer’s cash shortfall when states faced the prospect of delayed payments, under a lapse in authorization, reimbursements on all projects will be halted completely, not simply delayed.”

Since December 2014, AHTD has evaluated its scheduled Federal-aid projects prior to each bid opening to ensure sufficient State funds are available to fulfill commitments during anticipated reductions or delays in Federal reimbursements.

Last week, the AHTD withdrew nine construction projects with a construction value of $120 million from its June 9 bid opening. The projects include a planned improvement to the I-30/I-430 interchange in Little Rock and an overlay project on I-30 in Pulaski and Saline counties.

To date, AHTD has withdrawn 70 projects worth an estimated $282 million in construction dollars from the 2015 bid opening schedule. “This places all of our Federal-aid projects – including those currently under construction – at risk,” said Bennett. “Congress must act now or work in many construction zones across the country will come to a complete stop.”

This year, a total of 120 projects with an estimated construction value of $490 million are at risk because Congress has yet to replace or extend MAP-21, the federal highway bill that funds the Highway Trust Fund. MAP-21 expires at the end of May, and the Highway Trust Fund is almost depleted. The department says that 130 projects with an estimated value of $520 million are at risk for 2016.

The Obama administration has requested Congress to approve a six-year, $478 billion transportation funding bill that it says can be paid for largely with taxes collected on corporate profits offshore.

Arkansas’ congressional delegation has remained mostly quiet on the pending shutdown of short-term highway funding, but Sen. John Boozman, R-Arkansas, has said in the past that lawmakers will find new funding methods for transportation projects beyond the $18.4 cents per gallon federal gas tax.

In a video blog post to constituents on his website Thursday, Rep. Bruce Westerman, R- Hot Springs, said he is working on legislation to keep the federal highway fund in operation.

“I would like to let you at home know that I am working hard to find ways to keep the Federal Highway Trust Fund financed for the long-term and Arkansas roads paved,” Westerman said. “I introduced legislation in March that would exempt federal highway trust fund dollars from paying local sales tax on projects, focusing those funds on actually constructing and maintaining our roads and bridges.”

Westerman also said that in coming weeks, he plans to introduce additional legislation that would add $15 billion annually to fully fund the highway trust without raising taxes.

Rep. Rick Crawford, R-Jonesboro, said a short-term plan may be what is approved ahead of the May 31 deadline. “As of now, a long term reauthorization before the deadline is not likely, so the most probable option is a short term patch that’s going to allow (House) Ways and Means additional time to secure funding for a full authorization later this year,” Crawford said.