Foxx: Highway Cuts Coming Aug. 1 Unless Congress Acts

WASHINGTON, DC - JULY 11: Anthony Foxx speaks after being ceremonially sworn in as Transportation Secretary, at the U.S. Department of Transportation, July 11, 2013 in Washington, DC. Foxx, the former mayor of Charlotte, North Carolina, was officially sworn in on July 2 and is the 17th Secretary of Transportation in U.S. history. 
National Journal
Billy House
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Billy House
July 1, 2014, 9:33 a.m.

Be­cause law­makers have not ac­ted to re­plen­ish the dwind­ling High­way Trust Fund, states will soon face a 28 per­cent cut in fed­er­al fund­ing for re­pairs to roads and bridges, warned Trans­port­a­tion Sec­ret­ary An­thony Foxx on Tues­day.

“These cash-man­age­ment pro­ced­ures will be­gin on Aug. 1, 2014, for pro­grams fun­ded out of the High­way Ac­count, with states re­ceiv­ing no­ti­fic­a­tion of their first pro­por­tion­al share on Aug. 11, 2014,” writes Foxx in his let­ter to trans­port­a­tion of­fi­cials in all 50 states.

However, in a blog on the de­part­ment’s web­site that ac­com­pan­ied the let­ter’s an­nounce­ment, Foxx also writes, “The good news, at least, is that Con­gress can still choose to act when they re­turn from re­cess.”

Foxx is re­fer­ring to what the Obama ad­min­is­tra­tion hopes will be law­makers’ ef­forts start­ing next week to find more money for the fund, which is pro­jec­ted be ex­hausted by Sept. 30. An 18.4 cent gas tax and oth­er fuel taxes have fin­anced the fund, but those have not been keep­ing up with in­fla­tion and the amount and costs of the pro­jects it has been fin­an­cing.

Foxx’s let­ter Tues­day is an ef­fort by the ad­min­is­tra­tion to turn up the heat on law­makers to find some ad­di­tion­al money. It tells state of­fi­cials that un­less a res­ol­u­tion is found, a new “cash man­age­ment plan” will be put in place at the start of Au­gust.

“Un­der the new plan, we’ll use the same per­cent­age each state is as­signed an­nu­ally to de­term­ine how much they’ll re­ceive of whatever is left in the fund,” writes Foxx. But he adds that states will not be paid their per­cent­age as they send in their bills, and, in­stead, “every two weeks as money from the gas tax trickles in­to the fund.”

“On av­er­age, states will see a 28 per­cent drop in fed­er­al trans­port­a­tion dol­lars. De­pend­ing on how they man­age the funds, each state will feel the ef­fects dif­fer­ently, but every­one will feel the im­pact soon­er or later,” he writes.

The ad­min­is­tra­tion has pro­jec­ted that delays could hit hun­dreds of road pro­jects around the coun­try and im­pact thou­sands of jobs.

Foxx’s let­ter goes on to say that in the event that the short­fall con­tin­ues in­to the fall, the Mass Trans­it Ac­count will also reach a crit­ic­al point. “Should that oc­cur, the De­part­ment will be provid­ing spe­cif­ic guid­ance on the Fed­er­al Trans­it Ad­min­is­tra­tion’s ap­proach in man­aging the re­sources avail­able to trans­it agen­cies,” states Foxx’s let­ter.

But in his blog item, Foxx re­it­er­ates of the law­makers, “They still have some time.”

In the mean­time, some con­ser­vat­ive groups and Re­pub­lic­an law­makers are seiz­ing on the fund­ing short­fall as an op­por­tun­ity to re­open a policy de­bate over the fund it­self. And they are down­play­ing the dire warn­ings of not mov­ing quickly to re­plen­ish the fund as is while they en­gage in that de­bate.

In fact, many con­ser­vat­ives say it is time for Con­gress to con­sider “evolving” the fed­er­al gov­ern­ment out of some trans­port­a­tion de­cisions and to give more au­thor­ity to the states. They point to le­gis­la­tion — such as a meas­ure in­tro­duced by Sen. Mike Lee, R-Utah, and Rep. Tom Graves, R-Ga. — that would phase out the fed­er­al gas­ol­ine gas and turn over most of the fed­er­al trans­port­a­tion pro­gram to state­houses.

But in a state­ment on Tues­day, Sen­ate Budget Com­mit­tee Chair­man Patty Mur­ray chimed in on what she said is a clock “wind­ing down for Con­gress to avoid lurch­ing to­ward an­oth­er un­ne­ces­sary crisis — this time with a con­struc­tion shut­down.”

“Work­ers and busi­nesses shouldn’t have to pay the price for an­oth­er man­u­fac­tured crisis out of Wash­ing­ton, D.C. — so I hope Re­pub­lic­ans find a way to push the tea party aside and avoid this crisis,” said Mur­ray. “Re­pub­lic­ans have re­fused to work with us this year on im­mig­ra­tion re­form and oth­er policies that would cre­ate jobs, but hope­fully they can at least work with us to pre­vent jobs from act­ively be­ing des­troyed.”

Later Tues­day, Pres­id­ent Obama was to speak at the front of the Key Bridge in Wash­ing­ton to push for a plan to re­plen­ish the high­way fund.

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