Feds Warn States Of Possible Highway Cash Holdback

Jul 7, 2014

Washington and Oregon may follow Idaho’s lead in temporarily suspending advertising for bids for some highway projects.

Idaho’s decision is the result of a standoff in Congress over how to replenish the money in the pot for highway construction.  

The issue here is that the federal gas tax hasn't gone up for more than 20 years while commitments for highway construction have. In the past, Congress has patched the gap with transfers and borrowing.

But this year, conservatives are warning, "No more." In response, the Obama Administration is warning states that starting next month they may get less federal highway construction money.

In Oregon, state Department of Transportation’s assistant director Travis Brouwer says his agency will essentially float a loan to the federal government to keep contractors and workers active.

"We have sufficient cash reserves for at least a short period of time — we're not quite sure how long, but we should be able to weather a couple months lapse in federal funding,” Brouwer said.

The uncertainty about future funding caused the Idaho Transportation Department to suspend advertising for bids on a half dozen planned projects in mid-June. Spokesman Reed Hollinshead says his agency has been sufficiently frugal — and has enough near-term clarity on federal reimbursements — that it will resume bid solicitation next week. 

Washington's Department of Transportation is still weighing options.

"We are looking at projects that might be at risk ... on a case-by-case basis,” said WSDOT spokesman Lars Erickson, later adding via email, "We are optimistic Congress will take action as they have every time the Highway Trust Fund has approached insolvency.”

Congressional committee chairman from both parties, including Sen. Ron Wyden, D-Ore,, are trading ideas for short-term fixes to head off the crisis.