The U.S. Transportation Department is notifying states that federal reimbursements for highway and transit construction projects will slow down as soon as August.
The department will stop paying states in full when the Highway Trust Fund dips below $4 billion about Aug. 1, Transportation Secretary Anthony Foxx said at a breakfast Tuesday in Washington hosted by the Christian Science Monitor. Payments will be made every two weeks instead of immediately, he said.
“There’s no good option when we’re talking about a trust fund running short,” Foxx said. “I don’t think the American public understands how severe this crisis is right now.”
Lawmakers are at an impasse both over long-term financing for the Highway Trust Fund and a short-term replenishment to ensure states can keep road construction and repaving projects going for the rest of the year. The current two-year funding authorization for the trust expires Sept. 30, though the fund is projected to run dry by the end of August, Foxx said.
Congressional negotiators have shown little appetite for raising the 18.4 cent-per-gallon gas tax, which the fund now relies on for most of the $50 billion-a-year in federal monies for highway, bridge and mass transit projects. The tax hasn’t been raised since 1993 even as the cost and pace of construction has risen, contributing to the fund’s current squeeze.
Other alternatives, such as a Senate plan for a short-term, $9 billion infusion through tax policy changes, have drawn scant support from Republicans.
Foxx used the breakfast to make the case for legislation drafted by the administration of President Barack Obama, the Grow America Act. The four-year, $302 billion measure would raise the level of spending on highways and mass transit, paid for through changes in corporate tax structure.