Federal Funding Uncertainty Cancels Paving Of Last State Gravel Highway

Uncertainty over federal-aid highway funding is leading the Arkansas State Highway and Transportation Department to withdraw three projects from a bid opening planned for Jan. 27.

Those include paving a gravel section of Highway 220 in Crawford County – the state’s last unpaved highway section, which leads into Devil’s Den State Park. The others were to be a major widening of Highway 1 in Lee and Phillips County, and replacing the Cedar Creek bridge on County Road 72 in Franklin County.

AHTD announced in a press release Tuesday (Dec. 23) that it was pulling the project bid lettings because of U.S. Department of Transportation projections that the federal Highway Trust Fund will be emptied of reserves as early as July.

Highway projects are funded with state funds, a portion of which are then reimbursed from the federal Highway Trust Fund. AHTD Director Scott Bennett said in a news release that the department is trying to account for potential shortfalls prior to seeking the reimbursements.

The federal Highway Trust Fund nearly ran dry in 2014 until Congress acted to shore it up using a variety of methods, including one, pension smoothing, that increased tax revenues by allowing companies to delay deposits into pension funds, increasing their taxable income. But that was only a short-term fix for a larger problem: too many highway projects being funded by too few dollars. The federal gas tax has not been increased since 1993 and no longer raises enough money to pay for current highway construction and maintenance.

The law that funds the nation’s highways, known currently as MAP-21, was extended earlier this year but expires May 31. Transportation advocates are hoping Congress can pass a measure addressing the long-term funding shortfall.

AHTD will continue to evaluate scheduled projects funded with federal dollars prior to each bid letting until Congress acts, the AHTD release said. Fifteen projects costing about $70 million were delayed in 2014 because of that same uncertainty.

“Same song, second verse,” Bennett said in the press release. “The federal government is putting the states in a real bind regarding the implementation of much-needed highway projects. We are hoping that a long-term revenue solution for the federal Highway Trust Fund can be found so we in Arkansas and across the country can continue to award planned construction projects and adequately invest in our nation’s infrastructure.”