OR: Oregon Could Loan $110 Million to Federal Government if Transportation Funding Runs Out

With federal transportation funding set to run out in August, Oregon transportation officials say they might be forced to float the federal government up to $110 million this year.

The loan is one of several consequences Oregon might face if Congress fails to find more money for the nearly depleted Highway Trust Fund. The state might also delay or cancel some highway projects scheduled for 2015 if the fund isn't replenished.

The Oregon Department of Transportation has enough money in temporary reserves to continue paying contractors to finish out the current construction season, "but it does put us into a very awkward spot," said Travis Brouwer, ODOT assistant director.

If Congress doesn't resolve the funding situation by November, ODOT officials estimate they'll need to float the federal government $50 million to $110 million.

The federal government is contractually obligated to repay that money for the already-approved construction projects, Brouwer said, but the more worrying impact would be a lack of funding for projects that haven't started.

"Until we get some strong indication from Congress that they're going to have funding for 2015, we're going to be really cautious about putting projects out to bid because we don't want to start any projects that Congress may never pay for," he said.

Projects at risk include safety improvements along Southeast Powell Boulevard and Southeast Division Street, the widening of U.S. 26 from 185th Avenue to Cornelius Pass Road, the addition of a second exit lane from Interstate 5 northbound to Lower Boones Ferry Road, and dozens of other projects in the 2015-18 statewide transportation improvement plan.

All of the projects in the plan are paid for primarily with federal money.

The Highway Trust Fund relies heavily on the federal gas tax, which hasn't been raised since 1993. All the while more fuel-efficient vehicles hit the roads, and a decline in driving during the Great Recession led to a decline in user fees.

To avoid cutting transportation funding, Congress since 2008 has transferred $55 billion into the Highway Trust Fund. That money is about to run out in a few weeks, and the fund is projected to run an annual deficit of $15 billion starting next year.

Starting Aug. 1, federal transportation officials say they plan to dole out twice-a-month checks to states based solely on revenue from the federal gas tax. Each state will only receive a portion of the money the federal government owes, meaning Oregon won't be quickly reimbursed for construction expenses.

In a July 1 letter to state transportation officials, U.S. Department of Transportation Secretary Anthony Foxx described the move as "cash management procedures."

He also reminded state transportation officials of another funding problem on the horizon: the mass transit account is on track to run out of money in a few months.

Senate Finance Chairman Ron Wyden, D-Ore., in June proposed a $9 billion plan — including tax hikes on heavy commercial trucks — to keep federal money flowing for highway, bridge and transit projects.

His plan died just two days later after key Republicans in both the House and Senate said they objected to new taxes.


—? Yuxing Zheng

Copyright 2014 - The Oregonian, Portland, Ore.

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