States Forced to Delay Millions of Dollars in Highway Contracts

September 28, 2010

States have put the brakes on millions of dollars of highway construction projects and are scrambling to substitute scarce state funds for the federal funds that have been cut off due to the crisis in the Highway Trust Fund.

"States are suspending new contract awards, halting right-of-way acquisition and looking for ways to stop on-going construction while maintaining public safety," said AASHTO (American Association of State Highway and Transportation Officials) Executive Director John Horsley. "It is truly a crisis that Congress must resolve immediately. Every day the federal IOUs are piling up and the states’ financial hole gets deeper."

U.S. Secretary of Transportation Mary Peters recently announced that the federal government would slow down reimbursements to the states, and would likely be able to make only partial payments beginning next week, due to insufficient funds in the Highway Trust Fund. She urged Congress to enact an $8 billion transfer from the General Fund to preserve the solvency of the Highway Trust Fund. Action is pending in the Senate.

More than a dozen states have detailed the impacts of the federal default on state programs, either in news releases or via media reports. A rundown on the impact for each of these states is available on the AASHTO website