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State DOTs Pull Back on Trans Projects Amid Funding Uncertainty

Four states have canceled or delayed $780 million in transportation improvement projects and another nine say over $1.8 billion are at risk

March 25, 2015

Four states have canceled or delayed $780 million in transportation improvement projects and another nine say over $1.8 billion are at risk because of continued uncertainty over whether Congress will take action soon to fix the ailing Highway Trust Fund (HTF).

The Washington, D.C.-based American Road & Transportation Builders Association (ARTBA) reviewed news reports, public statements and testimony from state officials to compile the list featured in a March 24 report.

On average, the HTF is the source of 52 percent of all highway and bridge capital investments made annually by state governments. Funding for the federal highway and transit program expires on 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.

So far in 2015, four states—Arkansas, Georgia, Tennessee and Wyoming—have shelved $779.7 million in projects due to the uncertainty over federal funds.

The Arkansas State Highway and Transportation Department (AHTD) has withdrawn 56 construction projects scheduled for consideration in its April 21, 2015 bid opening due to continuing uncertainty of Federal-aid reimbursements available from the Federal Highway Trust Fund.

The estimated value of projects withdrawn from the April bid opening is more than $112 million and includes $50 million authorized by the Arkansas Highway Commission for its 2015 highway overlay program. This brings the total number of projects withdrawn from the 2015 bid openings to 61. The estimated construction value of these withdrawn projects is $162 million. An attached list of projects and accompanying map provide additional details and an illustration of the location of all projects withdrawn in 2015.

Nine states—Colorado, Connecticut, Mississippi, Montana, Nebraska, Nevada, Pennsylvania, Vermont and West Virginia—have expressed concern over the feasibility of future transportation infrastructure projects totaling more than $1.8 billion if Congress does not act before May 31. ARTBA expects more states will make similar announcements as the deadline draws nearer.

Last year, before a last-ditch effort by members of Congress led to an extension of MAP-21, DOT officials in 35 states publicly stated that they would be impacted by the precarious HTF situation.

“It’s déjà vu all over again as Yogi Berra would say,” according to ARTBA President & CEO Pete Ruane. “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 added.

“The continued uncertainty with the Highway Trust Fund has real world, negative impacts as state governments begin cutting back on their construction plans because they don’t know if the funding will be there to pay the bills a few months from now,” Ruane said. “This, in turn, prevents private sector companies from hiring workers and making major capital investments such as purchasing equipment, both of which are key to bolstering economic activity.”

“The clock is on the field.  There are 34 legislative calendar days left in the Senate and just 22 days in the House,” Ruane said. “It’s time for Congress and the President to show they can govern and provide a permanent funding solution for America’s highway and transit program.”

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