Another Blow to the Highway Planning and Funding

Last week the Federal Highway Administration (FHWA) issued a notice asking each state to identify proposed program reductions by September 4, 2009. This is the result of a provision in the highway authorization bill due to expire September 30, 2009 mandating the states return $8.708 billion (yes with a B) of contract authority to the Highway Trust Fund. (HTF) The state by state table is here.

Remember we have watched the HTF almost go broke in September 2008 when Congress added $8 billion to the fund. Then in the spring 2009, I wrote about the fund going broke again and that it could have been fixed in the stimulus package. Then in June, the states were warned again by FHWA of pending doom with funds running out in August. Congress added $7.0 billion to get the HTF through September 30, 2009.

Now comes another warning to the states to begin to look at program reductions at the end of September. Key senators have vowed to fix this issue but with all that is going on will it be another band-aid? Will this be at the last moment in September?

This roller coaster ride for federal highway funding significantly hampers the states planning of highway projects. The states can not count on traditional federal funding being available. Add to this precarious nature of state funding and the planning process goes into a seizure except for the small projects and perhaps those already committed via the stimulus funds.

We at Reason have written before about the need for an 18 month extension with adequate funding and a realistic debate. Once again, Congress may take the band aids out of medicine cabinet rather than searching for a real solution.

My colleague Bob Poole said it best:

“Putting the highway bill on a fast track means this country will forego what should be an extended debate on whether this measure is the right path to pursue. And with other key Obama administration priorities—health care policy and global warming/cap & trade, in particular—already in play and requiring extensive debate, a rush to enactment of the surface transportation bill would almost certainly lead to changes we’d come to regret.”