Highway Trust Fund $8-Billion Relief Bill Keeps State DOTs Contracting

By Liz Moucka | September 28, 2010

President Bush has signed legislation approved by Congress in September to transfer $8.017 billion to the Highway Trust Fund. The move allows state departments of transportation (DOTs) to pay their bills and to continue the millions of dollars of construction projects that had been put on hold after U.S. Secretary of Transportation Mary Peters announced that due to a shortage of federal funds, the government would pay only a portion of federal highway construction contracts.

This $8 billion in relief is not new money coming into the state DOTs. In early September, Secretary Peters announced that federal-aid payments would be rationed weekly, rather than twice daily, because of a shortage of federal funds. State DOTs had already begun making plans for reducing project lettings.

Revenue coming into the Highway Trust Fund from gas taxes has begun to dwindle as the high price of gasoline has drivers purchasing less fuel. Rep. James Oberstar, D-MN and chairman of the House Transportation & Infrastructure Committee, explained that approval of the bill restores to the Highway Trust Fund $8.017 billion that was siphoned off in a budget deal 10 years ago.


Shortly after Secretary Peters' announcement of delayed funding, ODOT postponed $80 million in projects that were let in August. ODOT Director Gary Ridley, who was in Washington, DC, witnessed the action in Congress.

"I believe I witnessed history in the making," said Ridley. "Senator Inhofe led the Senate and the nation on bringing about a speedy consensus on this matter in two days — an unprecedented amount of time to address such an important issue. Oklahomans should be utterly proud of our two senators, Jim Inhofe and Tom Coburn, not only for supporting but also for leading this action."

After President Bush signed the bill, the Oklahoma Transportation Commission scheduled a special meeting to consider reinstating the deferred projects back into the letting.


According to Mississippi Department of Transportation Executive Director Larry L. "Butch" Brown, "We are extremely pleased and grateful to the Senate leaders. Approximately 50 percent of MDOT's revenues for operations, maintenance and construction come from Federal Highway Administration reimbursements. This restoration is a plus for the state of Mississippi and for the nation."

The possible decline or shortfall in the Highway Trust Fund would have negatively impacted Mississippi's highway construction workforce, contractors and material suppliers, according to Brown. "With the signing of this bill by the president, it will allow Mississippi to move forward on projects that could have possibly been put on hold due to funding."


"For Louisiana, it means we will have the resources needed to deliver the state FY 2008–09 Highway Program once Congress appropriates and allocates funding to the states," according to Brendan Rush, spokesman for LA DOTD. "Without the rescue of the Federal Transportation Trust Fund, we would have had to begin deferring projects."


TDOT says that this bill will restore $235.6 million in funding for Tennessee to continue important bridge and road construction projects.


Arkansas decided to postpone a $24-million project in West Memphis from their September highway letting in response to Secretary Peters' announcement of reduced funding. Like several other states, Arkansas has funded numerous projects with GARVEE (Grant Anticipation Revenue Vehicle) bonds over the past decade and relies on federal money to make these payments.

Emergency Funding

In addition to the news about the Highway Trust Fund, Transportation Secretary Mary Peters has made $4 million in federal quick release funds available for Louisiana and Mississippi to help pay for urgent repairs to roads and bridges damaged by floods associated with Hurricane Gustav. The states will receive $3 million and $1 million respectively. The Secretary added that the Department of Transportation will continue to work with officials from Louisiana and Mississippi as they evaluate the extent of road damage caused by the floods. She said more resources will likely be made available based on those evaluations.

Just as rapidly as the weather's doubleheader, Secretary Peters announced that the federal government would make $2 million in quick release emergency highway funding available for road and bridge work in Texas, and another $2 million in emergency highway funding for Louisiana to repair roads, bridges and airports damaged by Hurricane Ike.

Damage assessment teams from the Federal Highway Administration (FHWA) and the Louisiana Department of Transportation and Development (DOTD) continue to assess hurricane-affected areas. For Ike, DOTD estimates it will cost about $66 million to repair roads and bridges that receive federal highway funding and to pick up debris along those routes.