Uncertain federal funding delays 56 Arkansas highway projects (Updated)

Uncertainty over federal funding has caused the Arkansas Highway & Transportation Department (AHTD) to withdraw 56 construction projects set for an April 21 bid cycle, with 11 of those projects in the Northwest Arkansas and Fort Smith metro areas.

The estimated value of projects is more than $112 million and includes $50 million authorized by the Arkansas Highway Commission for its 2015 highway overlay program, according to an AHTD statement issued Tuesday (March 24). This brings the total number of projects withdrawn from the 2015 bid openings to 61. The estimated construction value of these withdrawn projects is $162 million.

“Now that we have cancelled our overlay program for this year, there are few areas in the State that are not affected by projects withdrawn from the April bid letting,” said AHTD Director Scott Bennett said in the statement. “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 and the urgency of solving this national problem.”

Following are the projects withdrawn in the Northwest Arkansas and Fort Smith metro areas. No dollar amount was provided for the projects.

Northwest Arkansas
Benton County
Sulphur Springs-Spavinaw Creek overlay project
Springtown-Highway 279 overlay and shoulder work

Carroll County
County Road 704-west of Highway 103
Highway 62-Indian Creek overlay project

Madison County
Washington County Line-east overlay

Washington County
Razorback Road-Garland Ave.

Fort Smith region
Franklin County
Highway 352-Rock Creek overlay project

Johnson County
Highway 315 South overlay

Logan County
West of Highway 393-Yell County Line overlay

Sebastian County
Highway 10-Flat Rock Creek overlay

Scott County
Polk County Line-Highway 71 overlay
(Link here for more detailed information from the AHTD.)

FEDERAL FUNDING ISSUE
Arkansas is part of the American Association of State Highway and Transportation Officials (AASHTO), an organization that has been a frequent critic of how the federal government funds highway construction. Bennett said in the statement that problems with the federal Highway Trust Fund will result in more costly infrastructure problems.

“(O)ur State’s highway infrastructure has suffered severe damage from a harsh winter weather season. The lack of an overlay program is going to make repairing the damage that has occurred even more challenging,” Bennett noted. “As the Federal Highway Trust Fund heads towards the fiscal cliff, we are not only facing reduced and delayed reimbursements later this year, we are also facing the absence of a Federal-aid highway program next year. Congress must act soon to solve this problem by reinvesting in our Nation’s infrastructure.”

AHTD officials say they evaluate each round of bidding to ensure that state funds can cover the project in the event of reductions or delays in federal funding.

“Highway construction projects in Arkansas are initially paid with State funds, and then the State seeks reimbursement from the Federal Highway Trust Fund for the Federal portion of those payments. Without action from Congress, reimbursements from the Federal Highway Trust Fund are expected to be curtailed this summer,” noted the AHTD press release.

The American Road and Transportation Builders Association, a group with a clear interest in freeing up more federal highway funding, also reported Tuesday that four states – Arkansas, Georgia, Tennessee and Wyoming – have canceled or postponed $780 million in road and other transportation projects because of the federal funding uncertainty.

According to the association, the federal Highway Trust Fund (HTF) is on average the revenue for 52% of all highway and bridge capital investments made each year in the states. Money for the fund is set to expire May 31 unless Congress acts.

“The HTF has suffered five revenue shortfalls between 2008 and 2014, and the next cash crisis is expected to occur in summer 2015,” noted the ARTBA report.

ARTBA President and CEO Pete Ruane said the problem is “avoidable” if Congress would act.

“This is one of the most easily avoidable crises because Congress has known the May deadline was coming for about eight months. Yet, here we are again flirting with another economic meltdown in the peak of the construction season,” he said.

CONGRESSIONAL INPUT
U.S. Rep. Steve Womack, R-Rogers, said Congress must act soon to return the HTF to solvency.

“While we must continue to address wasteful spending in Washington, it need not come at the expense of our nation’s roads and bridges,” Womack noted in a statement. “Safe and reliable transportation infrastructure is critical to economic development in our state; I saw the benefits first-hand as Mayor of Rogers. We must find a long term solution that returns solvency and dependability to the Highway Trust Fund and makes possible continued, crucial infrastructure investment."

U.S. Rep. Bruce Westerman, R-Hot Springs, called Congress “irresponsible” for “kicking the can down the road with temporary fixes while our infrastructure deteriorates and exasperates the problem.” Westerman also told The City Wire he plans to introduce a bill Thursday (March 26) to exclude sales taxes from trust fund reimbursements.

“I plan to introduce a bill Thursday that would remove sales tax from reimbursements of projects paid from the trust fund. This will allow federal monies placed in the fund to go to asphalt and concrete rather than to pay state and local sales taxes. This is just one step in the right direction to making the fund sustainable,” Westerman said. “I am also working on proposals for long term funding strategies that will shift tax dollars from out-of-control mandatory spending programs that are consuming over two-thirds of American tax dollars into the highway trust fund. It will hopefully give states like Arkansas certainty in terms of the trust fund's solvency.”