Work now being done on 131 federally funded road and bridge construction projects in Arkansas worth $1.5 billion would cease if congressional authorization for transportation funding expired May 31 without a new deal, according to state highway officials.
Scott Bennett, the director of the Arkansas Highway and Transportation Department, made the assertion in a news release his agency issued Tuesday, one day after U.S. Transportation Secretary Anthony Foxx warned Bennett and other state transportation directors that the Federal Highway Administration would begin furloughing employees and thus be unable to process state requests for reimbursements on federal-aid projects if Congress were unable to reach a deal by the end of the month.
"We knew this would happen if Congress did not take appropriate action in time," Bennett said in the release. "Although we have been preparing for reductions or delays in Federal-aid reimbursements, we now have to consider the impacts of a complete FHWA shut-down."
The department already removed 70 projects worth an estimated $282 million from its 2015 bid-letting schedule to ensure it had enough state funds on hand to pay for existing work if federal reimbursements were cut or delayed.
The total included nine projects worth an estimated $120 million that the department withdrew last week from its June letting. One of those projects was replacing the White River bridge on Interstate 40 in Prairie County.
But now the agency faces the prospect of shutting down work on the existing 131 construction projects, including the $125 million makeover of the Interstate 430/Interstate 630 interchange and a $10 million bridge on West Roosevelt Road near the State Fairgrounds in Little Rock.
"This places all of our Federal-aid projects -- including those currently under construction -- at risk," Bennett said in the release. "Congress must act now or work in many construction zones across the Country will come to a complete stop."
Richard Hedgecock, executive director of the Arkansas chapter of the Associated General Contractors of America, expressed worry at the latest development. Members of his organization, which represents highway contractors based in the state, met with members of the state's congressional delegation last month in Washington.
"It's our hope that the words of Secretary Foxx will open the eyes of the legislative leaders who can do something about this," Hedgecock said. "The Arkansas delegation is ready and willing to get on board [with a new deal]. But it's the legislative leadership in both the House and the Senate that has to kick off that plan.
"They are the ones that will have to get off the sidelines. Perhaps this threat will do that."
It is difficult to tell whether Foxx's "threat" is political gamesmanship or a very real concern for the nation's state highway departments, their contractors, the thousands of people they employ, the motoring public and the nation's taxpayers.
What is real is the dilemma facing Congress, which wants a new transportation funding bill but is unable to find agreement on how to pay for it. The problem is federal gas taxes, which fund the U.S. highway trust fund. They bring in about $34 billion annually, but the federal government spends about $50 billion a year on transportation projects.
Congress must either come up with the difference or drastically cut back the number of federally funded construction projects.
"While we must continue to address wasteful spending in Washington, it need not come at the expense of our nation's roads and bridges," Rep. Steve Womack, R-Ark., said in a statement released by his office Tuesday. "We must find a long term solution that returns solvency and dependability to the Highway Trust Fund and makes possible continued, crucial infrastructure investment."
Ryan Saylor, a spokesman for Rep. Bruce Westerman, R-Ark., said Congress needs to find a permanent solution to highway funding.
"Congressman Westerman is working tirelessly with his House colleagues to find a solution for the monetary crisis facing the Federal Highway Trust Fund," Saylor said in a release. "While highway funding in our country is at a critical juncture, the Congressman believes it is important that he and his colleagues find a real and lasting solution to financing the Federal Highway Trust Fund instead of kicking the can down the road with a short-term fix. He believes that solution can be found before May 31 so Arkansas highway projects can stay on track."
The trust fund is financed by the 18.4 cents the federal government collects on each gallon of fuel purchased in the United States. It was last raised in 1993. More fuel-efficient vehicles and higher construction costs also have hurt.
Instead of trying to find an agreement on raising the tax or finding another long-term fix, Congress in recent years has turned to short-term fixes in the form of taking money from other parts of the budget.
Among the latest ideas to bolster the trust fund is to offer a one-time repatriation tax to allow U.S. companies to repatriate their overseas earnings at a rate well below the existing 35 percent U.S. corporate tax rate, with the proceeds transferred to the trust fund. U.S. companies have parked about $2 trillion in foreign earnings overseas partly to avoid paying the going rate.
But negotiators have been unable to agree on whether it should be voluntary or on the percentage of the reduced tax, according to an online article in The Hill, which focuses on coverage of Congress and politics.
Metro on 05/13/2015