TDOT faces major budget cuts if Congress doesn’t meet Friday deadline

TDOT faces major budget cuts if Congress doesn't meet Friday deadline (Image 1)
TDOT faces major budget cuts if Congress doesn't meet Friday deadline (Image 1)

Congress has until Friday to extend funding to the Highway Trust Fund to keep the federal fund afloat at least through the end of the year.

If not, the government will not be able to fully fund road projects it promised Tennessee it would fund.

The Tennessee Department of Transportation and the road construction industry is anxiously waiting to see if Congress can agree on a way to keep the Highway Trust Fund a float before an August 1 deadline when the U.S. Department of Transportation said it would have to start delaying payments to states.

The Highway Trust Fund is funded by an 18 cent-per-gallon gas tax. It then provides federal funding to states across the country to supplement the cost of road projects and bridge maintenance.

In Tennessee, it amounts to around 850 to 900 million dollars a year, or about half of TDOT’s $1.8 billion yearly budget.

TDOT commissioner John Schroer sent a letter to all members of Tennessee’s Congressional Delegation asking them to find a way to keep financing the trust fund.

“We encourage you and your colleagues to address this impending funding crisis and to consider all available options to stabilize the Highway Trust Fund,” he wrote. “It is critical that both a short and mid-term funding solution be found for the nation’s transportation system.

Schroer added, “The department believes that maintaining our $24 billion investment in infrastructure is a wise strategy for the long term and the department receives relatively few complaints regarding the condition of our state highway system.”

TDOT’s chief engineer told News 2 he has prioritized projects to make sure that all current construction projects will not be impacted by a reduction in federal funding.

“One of the things we did is we tried to put ourselves in a strong position,” Paul Degges said. “Since Tennessee has no debt, we don’t have to make bond payments, so we tried to prioritize everything so we don’t have to stop any construction projects.”

By October 1, the department could be facing even more cuts in funding and has already identified 13 future projects that were slated to begin during the 2014 fiscal year that are being shifted to 2015’s fiscal year.

They included a proposed intersection at SR-76 in Clarksville, a proposed I-65 interchange from SR-109 to I-65 in Robertson and Sumner counties, and a widening of I-65 interchange from SR-109 to I-65 also in Robertson and Sumner counties.

Those projects amount to $41.3 million in deferred road construction of the total $246 million in deferred projects.

“If you work in the road building industry, or if your business relies on people that make money in the road building industry, you are going to see it immediately,” Degges said.

The Tennessee Road Builders Association’s 325-member companies are concerned about how they will be able to sustain their businesses if funding is cut.

“We don’t know whether to invest in our equipment or our people, and by not doing that, there is a ripple effect through all aspects of the economy,” Executive Vice President of TRBA Ken Starwalt said. “If a contractor is not buying equipment, then the equipment dealer isn’t selling and he has got to make decision about layoffs.”

He continued, “Then that spreads to other industry as laid off workers slow their personal spending in other areas.”

The TRBA also stressed that cuts to transportation funding will also begin to affect congestion, safety and economic growth.

“If we don’t have the revenues to maintain and build new roads all, of that is impacted,” he said. “If we are not able to keep our system in good working condition then we are not going to be able to bring in new business and create new jobs.”

TDOT has urged Tennesseans to contact their members of Congress to ask them to avoid missing the August 1 deadline.

The House passed a $10.8 billion bill last week that would pay for highway and transit aid to states through the end of May 2015 at current spending levels.

The Senate is expected to take up the bill, but some Senators have already voiced opposition to how the House planned to pay for the extension.

Republican Senator Bob Corker said the house bill uses a gimmick called “pension smoothing” to pay for the extension, and he does not support that plan.

“It’s time for members on both sides of the aisle to decide if they want to continue this irresponsible practice of stealing from future generations to pay for short-term spending today or if they are ready to make the tough decisions they were elected to make and work on a long-term, sustainable solution to our highway funding,” Corker said in a released statement. “I hope my colleagues will support this amendment, and commit to find a way to reform and pay for our transportation projects in the same timeframe the money is spent.”

Republican Senator Lamar Alexander said, “It is irresponsible for Congress to use general revenues and other accounting gimmicks to fund the construction of our nation’s transportation system. Instead, Congress should enact a long-term road program and pay for it with user fees, a conservative approach that Tennessee has been taking for years and leaves Tennessee taxpayers with zero road debt.”

Speaker of the House John Boehner said the house will not accept any amendments to the bill that changes their planned funding.

Republican Congressman Diane Black said she supports a long term solution.

“Congressman Black takes the infrastructure needs of Tennessee very seriously and understands the impact that these projects can have on our economy,” a released statement said. “This is why she believes that we should work to find a long-term solution in Congress that will truly address our aging infrastructure needs in a way that will not burden Tennessee families and our economy.”

Republican Congresswoman Marsha Blackburn said she has talked to TDOT directly about the issue.

“We have met with Commissioner Schroer and understand his concerns,” she said in a statement. “That is why the House acted this year on a highway bill to fund important road projects.”

Representative Blackburn also blamed the Senate on holding up a solution to the Highway Trust Fund issue.

“This is just one of more than 350 House bills that are currently stuck on Majority Leader Harry Reid’s desk awaiting action in the Senate,” Blackburn said. “It is my hope that before leaving for the August recess Senator Reid will take up and pass the House-passed highway bill.”

Republican Congressman Scott DesJarlais said he supports funding roads, but not the way the Highway Trust Fund has been doing it.

“Cleary it is important to have good roads and infrastructure,” he said. “However, the problem with the current approach is that Washington bureaucrats and red tape artificially inflate the costs of these projects.”

He continued, “Therefore, I believe we should block grant transportation funds back to the state and allow them to prioritize how that money is spent. What we do not need is another stimulus package or an effort to raise gas taxes.”

Democratic Congressman Jim Cooper blamed the hold up on funding on a lack of willingness for Congress to fully fund the trust fund.

“I strongly support highway legislation, and I agree with Tennessee’s road commissioner,” Cooper said. “The problem is Congress doesn’t want to pay for anything anymore. Congress should not be allowed to chicken out when it comes to better roads and easier commutes.”

There has also been a suggestion of increasing the gas tax that finances the trust fund, but the Congressional Budget Office reported it would still lead to a shortfall in the revenues needed to fully meet the Highway Trust Fund’s obligations through the end of December.

States have been warned to expect on average of a 28 percent reduction in federal funding.

TDOT estimates it will be about 30 percent for our state.

*The Associated Press contributed to this story.

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