Fund stretch won't restore road projects

But jobs in progress keep going for 60 days, state says

A two-month extension of legislation authorizing the federal Highway Trust Fund to continue supporting highway and transit projects isn't enough for Arkansas highway officials to reinstate nine road and bridge construction projects worth $120 million that the agency dropped from its June bid letting.

But the extension will allow the state Highway and Transportation Department to continue to obtain reimbursements for federal-aid projects already under construction.

"It keeps our current projects going, but only for 60 days," Danny Straessle, an agency spokesman, said Tuesday.

In all, the department has suspended 70 projects worth $282 million that were going to bid this year because of the uncertainty over the Federal Highway Trust Fund. Authority to spend from the trust fund was scheduled to expire Sunday.

The Senate approved the extension through July on a voice vote early Saturday. The House passed the measure on May 19. It now goes to President Barack Obama for his signature.

"Basically, the action means for us no change whatsoever," Straessle said. "The extension provides no additional or new funding. Reimbursements are still scheduled to be reduced this summer."

But what it did do was delay furloughs of Federal Highway Administration employees for two months. Those furloughs would have halted any reimbursements, including those for ongoing construction projects largely paid for with federal money, U.S. Transportation Secretary Anthony Foxx said in a letter to top state highway executives earlier this month.

In Arkansas, examples of ongoing construction jobs that were at risk include a $29.1 million project to widen a 5.6-mile section of U.S. 167 in Dallas and Cleveland counties and a $9.5 million project to widen 1.9 miles of Arkansas 265 in Washington County from East Joyce Boulevard to the Fayetteville city limits, according to Straessle.

"Failing to [grant the extension] could have impacted several projects we have going on throughout the state," he said. "It's somewhat of a worse-case scenario to stop work on a project. I'm not aware that we've had to do that."

"The expectation is you bought yourself some time," Straessle added. "What are you going to do? That's what we're waiting to see: How all of this is going to come together."

U.S. Sen. John Boozman, R-Ark., speaking at a Delta Grassroots Caucus conference on economic quality for working families, said congressional leaders continued to work hard on a long-term highway funding bill.

But the difficulty remains on how to pay for it, he said. The federal Highway Trust Fund no longer collects enough in federal taxes on fuel to pay for highway construction commitments.

The senator said he didn't expect one idea -- increasing the federal tax rate on motor fuels -- to be enacted. It was raised to 18.4 cents on a gallon of gasoline in 1993.

"I don't think that's going to happen," Boozman said. "I'm not in favor of that."

Still on the table is a one-time repatriation tax to allow U.S. companies to voluntarily 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 Boozman said the difficulty with that idea is several committees in both chambers have jurisdiction and some in Congress want to fold the idea into a larger tax package.

Another idea is to expand drilling for fossil fuels on federal lands and in offshore areas and steer the resulting royalty revenue into the trust fund, which some in Congress say makes sense in that the oil and gas produced is tangentially tied to highway use, Boozman said.

"The good news is that transportation is not a Republican or a Democratic issue," he said. "People are working together. At the end of the day, we'll have a product."

Metro on 05/27/2015