Federal Highway Trust Fund Shuts Down; WSDOT Projects Could be Delayed

(Take action! See AGC of America request at end of article!)

As of press time Tuesday morning the US Congress had not yet passed legislation to extend the Federal Highway Trust Fund authorization. SAFETEA-LU the federal transportation funding act expired Sunday Feb. 28 at midnight.

As a result the federal Highway Trust Fund shut down first thing Monday suspending all payments to state transportation departments and four U.S. Department of Transportation agencies were expected to furlough employees beginning today

“No reimbursements to states for their share of federal highway funds no vouchers they have submitted or will submit to the Federal Administration will be able to be paid beginning Monday March 1 House Transportation and Infrastructure Committee Chairman James Oberstar D-MN told reporters on a conference call. The shutdown of the federal highway program means the Federal Highway Administration will not be able to reimburse states for any federal highway or transit funds.

At stake are the federal funds which would reimburse states for money they already have spent on federally backed projects. States typically hire contractors to build projects. Contractors then submit invoices to states when the work is completed and the states then pay those bills. States then submit invoices to the federal government for reimbursement of the funds already sent to contractors. Delays in reimbursements would mean the states must have cash on hand to pay contractors.

Washington State was expected to receive approximately $13.5 million in federal reimbursements on Wednesday March 3. WSDOT is reviewing the possible short and long-term funding ramifications.

“We appreciate the hard work and support of Washington’s federal delegation to get this issue resolved quickly. While we think we can manage this issue well in the short term we remain very concerned about the long-term implications of this issue” said WSDOT Secretary Paula Hammond.

Two King County area projects – Sunset Way Connection ($2.3 million in federal funds) in Issaquah and SR 516 paving near Covington ($1.9 million in federal funds) could have their advertisement to contractors delayed.

For a more detailed look at the recent actions and issues in play in the U.S. Senate see this article from today’s Wall Street Journal.

Important Update from AGC of America:

Urge House Members to extend the highway program through year’s end by voting in favor of HR 2847 this week.

As you know the authorization for the highway program expired Monday at 12:01 am. This week the House will consider HR 2847 (the Senate Jobs bill). The same bill passed the Senate last week 70 to 28 with 13 Republicans joining most Democratic Senators in support of the legislation. This bipartisan legislation includes provisions that are important to the construction industry: first it extends the highway and transit programs until December 31 2010; Second it modifies the Build America Bonds Program (to support interest rate reductions for a wider array of bonds); third it increases and extends IRS Section 179 expensing (immediate expensing of $250000 capital purchases) through the end of the year; and fourth it also creates a new payroll tax forgiveness and credit program for new hires who had been jobless.

We are still not certain about the schedule for the bill this week.

AGC is urging House members to pass the Senate Jobs Bill (HR 2847) quickly. Please call your representatives with the same request. To be connected to your elected officials call the US Capitol switchboard at: 202-225-3121.

A letter to your members of Congress is posted to AGC’s Legislative Action Center.