U.S. Transportation Secretary Anthony Foxx sent a letter notifying state department of transportation officials that the Federal Highway Administration (FHWA) will be unable to incur new obligations or make reimbursements to states beginning August 1, 2015, a day after the current MAP-21 surface transportation authority is set to expire.
The U.S. Department of Transportation (U.S. DOT) has published charts showing projected insolvency in the Highway Trust Fund Highway Account by early September and in the Mass Transit Account by early October. However in August, the Highway Account is anticipated to dip below the $4 billion threshold, triggering cash management procedures and leading to delayed reimbursements to the states.
In the letter, Secretary Foxx explains some of the grievous actions that U.S. DOT will be forced to make due to a funding shortfall.
“FHWA will not have the authority to provide project sponsors with any additional contract authority for new or ongoing projects,” Foxx wrote. “Similarly, FHWA will be required to furlough employees, which means your agency will cease having access to personnel who assist with all highway projects, not just with processing payments, but also project approvals, environmental actions and permitting, authorizations for new projects and modifications to existing projects, technical assistance and other vital activities we all rely on FHWA to conduct.”
Earlier this year, the Obama Administration transmitted to Congress an expanded and improved surface transportation program, in the GROW AMERICA Act legislative proposal. That proposal calls for funding growth of almost 50 percent over six years. The funding levels called for in GROW AMERICA are reflected in the Administration’s fiscal year 2016 budget and are fully paid for through existing revenues and by reforming the business tax system while eliminating loopholes that reward companies for moving profits overseas.
GROW AMERICA also includes measures to speed up projects without compromising the environment or structural integrity. It proposes programs to accelerate freight movement and to incentivize states to adopt technologies and processes to match DOT efforts to get projects done faster. GROW AMERICA also proposes ways to bring more private dollars into the work of building our nation's infrastructure through public-private partnerships.
“Congress’s failure to pass a long-term bill is of great concern to all of us who are engaged in the work of building and maintaining our Nation’s transportation infrastructure,” said Foxx. “Careening from self-inflicted crisis to self-inflicted crisis undermines our system. We need Congress to break the cycle of short term extensions; we need a long-term bill with significant growth.”