News & Observer | newsobserver.com | Highway trust fund dries up

Published: Sep 06, 2008 12:30 AM
Modified: Sep 06, 2008 01:43 AM

Highway trust fund dries up

As Americans drive less, the gas-tax fueled account will soon fall short by millions

 

Story Tools

Advertisements
WASHINGTON - The federal highway trust fund will run out of money this month, requiring delays in payments to states for transportation construction projects, Transportation Secretary Mary Peters said Friday.

The trust fund -- a federal account used to help pay for highway and bridge projects -- will run about $200 million short of its commitments for the fiscal year, which ends Sept. 30, Peters said during a conference call with reporters.

The deficit will mean short delays -- and in some cases a temporary reduction -- in payments to states for infrastructure projects the federal government has agreed to help finance.

Although the fund started with a $8.1 billion balance in October 2007, transportation officials say revenue for the past year was $8.3 billion below what the government had committed to spend.

Peters blamed the funding shortage on the high price of gasoline, which has prompted Americans to drive less. This means less fuel has been purchased, and less gasoline taxes have been collected for the trust fund. Americans drove 50 billion fewer miles between November and June than during the same period a year earlier.

Compounding the problem, Peters said, is federal lawmakers' habit of loading up highway spending bills with pet projects, or earmarks, for their home states. The current highway spending bill has more than $24 billion in earmarks, she said.

"Americans cannot afford to have Congress play 'kick the can' with highway funding for another year, another month or, frankly, another week," Peters said, urging immediate passage of legislation that has $8 billion to shore up highway funds.

Less than two months ago, the White House said President Bush would veto that bill if it reached his desk. Taking money from the general fund to prop up the highway system was "both a gimmick and a dangerous precedent that shifts costs from users to taxpayers at large," according to the White House.

N.C. could take a hit

The slowdown in federal reimbursement could cost North Carolina more than $300 million in highway and bridge construction funds this year, state transportation officials said in Raleigh.

If the Senate fails to join the House in an $8 billion bailout for the federal Highway Trust Fund, North Carolina will eventually have to cancel or postpone construction projects planned for the coming year. In the past, the federal fund has covered 80 percent of most highway and bridge building costs.

The state is counting on $943 million in federal funds to help support a $3.9 billion state transportation budget for fiscal year 2008-09.

"Everybody's been hoping Congress will do something to fix this looming shortfall," said Calvin Leggett, program development manager for the state Department of Transportation. "We budgeted very conservatively on the federal side for 2009 -- or we called ourselves budgeting conservatively, anyway."

Federal officials said the repayment rate will probably be cut by 30 to 40 percent, and North Carolina will have to wait longer to get any money it does receive from Washington.

John Horsley, executive director of the American Association of State Highway and Transportation Officials, said the funding delays proposed by Peters will "have grave repercussions for the states, for hundreds of thousands of workers in the construction industry, and the driving public."

(Staff writer Bruce Siceloff contributed to this story.)

All rights reserved. This copyrighted material may not be published, broadcast or redistributed in any manner.

Get $150+ in coupons in every Sunday N&O. Click here for convenient home delivery.

Staff writer Bruce Siceloff contributed to this story.
No comments have been posted for this story. Log in to be the first to comment.
 

 

The News & Observer is pleased to be able to offer its users the opportunity to make comments and hold conversations online. However, the interactive nature of the internet makes it impracticable for our staff to monitor each and every posting.

Since The News & Observer does not control user submitted statements, we cannot promise that readers will not occasionally find offensive or inaccurate comments posted on our website. In addition, we remind anyone interested in making an online comment that responsibility for statements posted lies with the person submitting the comment, not The News and Observer.

If you find a comment offensive, clicking on the exclamation icon will flag the comment for review by the administrators, we are counting on the good judgment of all our readers to help us.

Hosting Partners of
newsobserver.com

A subsidiary of The McClatchy Company