(As told to the AJC Editorial Board on May 8)
Right now the challenge in Washington is to come up with a transportation bill. But the immediate challenge is that the Federal Highway Trust fund itself — the 18.4 cents (per gallon federal tax) that you pay at the pump and goes to Washington — as well as the dollars that they subsidize it with, which is general fund money that’s been propping up the trust fund, is set to go dry sometime between July and August. (Congress) didn’t put enough money in the (current) two-year transportation bill to get us through that.
Starting October 1 (start of the new federal fiscal year) we need a new transportation bill, and there’s really been no substantial movement in Congress to give clarity on what that’s going to look like, how they’re going to fund it, what those funds might be, and what we (should) expect as a state.
The challenge for us moving forward, because we’re so dependent on federal dollars, is that we don’t know what the program will look like, therefore I can’t let construction projects.
How our state budget rolls into that is a key component. In the state fiscal year, we go to June 30. The federal fiscal year starts October 1. But they appropriate or allocate our dollars to us throughout the year. Our goal in Georgia has always been to use those federal dollars during the state budget year. We obligate all the federal funds that come to us generally early in the state year and use up our state matching funds, so we can budget wisely. One of the things that does is, it allows you to compete for additional funding that (other states) don’t use; that’s called redistribution. And Georgia has been able to take advantage of it over the years. We always want to position ourselves to do that.
In a traditional year — during July, August and September — Georgia would take the state motor-fuel dollars that we receive from the legislature, and we would do what’s called “advance construct.” We would get permission from the federal government to use 100 percent state motor-fuel dollars and fund that project. Then, when October rolls around, we would be able to convert it to a federal project and get our money back and start building against the federal portion.
This year, we just don’t know that that’s even going to be there, or going to be a possibility. (In a letter from U.S. Transportation Secretary Anthony Foxx) they’re telling us that they are going to start slowing down existing payments, as well as maybe even delaying those to some extent, or maybe giving (us) less money back than (we) were supposed to be getting.
Right now, starting around July of this year, the trust fund will be empty, and the federal government is saying that without a new bill or any kind of funding levels they really won’t be able to authorize or appropriate any federal dollars. We will go through the motions and say they owe us the money. They just won’t be able to guarantee that they can pay us back. And in a state like Georgia where we can’t go into debt, we’re having to do a risk-management on our cash flow today.
Around July 1, we’re going to stop our federal authorizations and wait to see what Congress does. We’re confident that they will do something, we just don’t know what that something will look like, or how they will fund it.
This is not something our governor has caused. This is not something our state legislature has caused. It’s not something my state transportation board has caused. This is basically Washington not knowing how it’s going to move forward with how they fund the transportation bill.
It’s a huge impact to our state. Summer is usually your major construction season. You’re trying to get projects out and keep them going, and keep your highway contractors working. So it will have an impact to our workforce certainly in the short-term. We are going to have some big (construction) letting in … June, because that’s closing out old money. But there are states now that are shutting down active construction projects, because they are not going to be able to pay the contractors.
If this goes on for a prolonged time, maybe for six or seven months without a transportation bill, it could be a challenge for us. The reason we’re concerned is, everybody understands there’s a problem, (but) nobody’s got the solution.
