Kentucky road construction projects threatened by funding impasse in Congress

myoung@herald-leader.comJune 11, 2014 

Two stretches of U.S. 60 were repaved in 2013.

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Ongoing road construction projects in Kentucky and many other states could halt abruptly later this summer if Congress can't settle on a way to replenish the national Highway Trust Fund, according to state transportation officials.

The trust fund, which reimburses states for the cost of many road construction projects and repairs, will be depleted in late July or early August if Congress doesn't act, said Tony Dorsey, spokesman for the American Association of State Highway and Transportation Officials.

Without those reimbursements, construction crews might be forced to abandon ongoing projects, said Chuck Wolfe, spokesman for the Kentucky Transportation Cabinet.

"If money runs out there is a potential for things to come to a screeching halt," he said. "The cabinet is evaluating our ability to sustain contract payments with purely state funds. Our last resort will be to stop an active construction project."

To avoid potential problems, the state also is considering the possibility of delaying some projects scheduled to start mid summer, Wolfe said.

The Highway Trust Fund has traditionally been funded by the federal gasoline tax, but Congress has not raised the 18.4 cents-per-gallon tax since 1993. Since then, inflation has increased the cost of construction projects and cars have become more fuel efficient, causing shortfalls in the highway fund.

In past years, Congress propped up the highway fund with money from the general fund, but lawmakers haven't been able to reach a consensus in recent months on how to pay for the fund going forward.

As much as 50 percent of funding for highway projects comes from federal aid, according to a resolution passed by the American Association of State Highway and Transportation Officials in Louisville last month. In Kentucky, the association said $833 million in highway funding is at risk, potentially affecting 100 projects.

Other states face a situation similar to that of Kentucky. Mike Lewis, Director of the Rhode Island Department of Transportation, said in an interview with the American Association of State Highway and Transportation Officials that his state is "advertising projects now with the caveat that we're not going to award them until the Federal Highway Trust Fund issue has been resolved, because if reimbursement payments are delayed for any length of time, the state would be in a position to — of having to — fund those projects without any revenue to do it."

If federal road funds dry up, the resulting economic impact could be far reaching, officials worry.

"There is a ripple effect," Dorsey said. "When a situation like this occurs the entire country can be affected economically; it's not just the workers on the roads."

Wolfe said thousands of jobs are at stake at a time when only four states have a higher unemployment rate than Kentucky's 7.7 percent.

In Washington, Republican leaders of the U.S. House have proposed temporarily paying for the trust fund by canceling Saturday deliveries for the postal service, an idea rejected by the Democrat-led Senate because it would take 10 years of Saturday deliveries to pay for one year of highway funding.

U.S. Rep. Andy Barr, R-Lexington, said in a written statement that "we must ensure that promises made by Washington are kept while we seek new, innovative solutions to end the cycle of lurching from crisis to crisis."

Barr said he has backed the Partnership to Build America Act, which would encourage American multinational corporations to buy into an infrastructure bond pool in exchange for the repatriation of overseas profits at a reduced tax rate.

U.S. Sen. Rand Paul, R-Bowling Green, supports a similar proposal in the Senate, said spokesman Daniel Bayens.

Robert Steurer, a spokesman for Senate Minority Leader Mitch McConnell, said McConnell "looks forward to the full Senate addressing this important extension once Senator Reid brings the issue to the Senate floor for consideration."

Matt Young: (859) 231-1324. Twitter: @mattyoungnow

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