State DOTs Plan Ways To Cope With Uncertain Federal Funds
With federal highway authorizations due to expire in three months, and no replacement bill even introduced yet in Congress, some state agencies are postponing highway contract bid lettings, and others are drawing up contingency plans that could delay project starts, officials say.
The search for a new surface transportation bill was front and center at the American Association of State Highway and Transportation Officials (AASHTO) annual winter meeting, held Feb. 24-27 in Washington, D.C.
Leaders of state departments of transportation strongly prefer that Congress pass a robustly funded five- or six-year surface transportation measure by May 31, when a current short-term bill lapses.
Attendees heard U.S. DOT Secretary Anthony Foxx and key House and Senate committee chairmen advocate a multi-year bill.
State officials find those signs of consensus encouraging, but also are well aware that the deadline is approaching and no agreement has surfaced yet on the keystone of the bill—where to find the tens of billions of dollars needed to supplement the weakening Highway Trust Fund.
Some officials think that, before the May deadline, Congress again will turn to another stopgap—Foxx says there have been 32 such temporary measures over the past six years.
Shailen Bhatt, Colorado DOT’s new executive director, says, “I am pretty optimistic we’re gong to get a short-term extension, because I just don’t see them working out all these issues by May 31.”
“Maybe they’ll surprise us, but it’s just not the way D.C. has worked,” adds Bhatt, who formerly led Delaware DOT and earlier was a Federal Highway Administration associate administrator.
Wyoming DOT Director John Cox says, “The need for the long-term funding capability and predictability is, I think, a huge issue for everybody.”
But there's no deal yet, and that hazy picture is having an effect on state highway programs.
Cox, who also is AASHTO’s current president, says that in his state, “We’ve cancelled two of our lettings this year, largely because of the uncertainty [over] federal funding.”
He notes that his department will hold those lettings later, but adds, “In Wyoming, when you have a real short construction window, that could mean a year [later], pretty easily.”
Looking ahead, Cox says, “I would not be surprised to see a short-term extension.” But he also sees “a concerted focus on getting a bill passed this year. That is truly what I’m hoping for … a long-term bill” in 2015.
In Arkansas, “We’ve already pulled $60 million worth of projects from the first two lettings of this calendar year,” says Scott E. Bennett, State Highway and Transportation Dept. director of highways and transportation. The department left about $10 million in federal-aid safety-related projects in those lettings.
Bennett adds that “without a fix of the Highway Trust Fund being in place past May 31, there’s another almost $500 million dollars that are at risk this year.”
If an agency lets a project now, “the payouts are going to start really in the spring and the summer, which is when the federal Highway Trust Fund is going to go in a cash-management mode. Well, that’s the heart of the construction season, when we can’t rely on full reimbursement from the federal Highway Trust Fund.”
In West Virginia, funding uncertainty caused state DOT officials to reduce and rework highway funding levels in 2014, and that has continued this year. Gregory L. Bailey, state highway engineer, says that before 2014, West Virginia’s annual highway program had totaled about $500 million, but “because of the funding levels and the uncertainty, we’ve reduced that down to a little over $400 million a year.”
The mix of funds also changed. Highway expansion projects, which had been about $250 million a year before 2014, were trimmed to about $120 million. But what Bailey terms the state’s “regular” program—which includes paving, small bridge-replacement jobs and resurfacing—rose to $280 million a year from $250 million.
