A last-minute patch by Congress to sustain federal highway funding until May offers no assurance that Georgia will have a reliable flow of road construction money beyond next spring, state transportation leaders said Friday.
Without that certainty, the state will continue to scale back spending on road maintenance and expansion projects at least through December, the spokeswoman for the Georgia Department of Transportation said.
“A short-term solution is a statement that transportation funding is not taken as seriously (by Congress) as we thought it would be,” said Natalie Dale, a GDOT spokeswoman. “So we have to step back and look at it as a statement about the future of transportation funding. If it’s going to continue to be these short-term patches, we have to be very cautious.”
Earlier this month, GDOT temporarily shelved 41 projects worth $118 million because of the federal funding uncertainty.
The highway trust fund is made up of revenue from an 18.4-cent-per-gallon federal tax on motor fuel. The income from that tax has tapered off over the past two decades because cars have become more fuel-efficient, and Americans are buying less gas.
Congress has kept the highway trust fund afloat since 2008 with a series of temporary funding patches. But proposals to raise the tax, unchanged since 1993, and indexing it to inflation have gone nowhere in a sharply divided Congress.
On Wednesday, federal lawmakers approved legislation to pour $11 billion into the highway trust fund to keep it solvent through May. The action narrowly averted a 28 percent reduction in federal highway construction funding that would have taken effect starting Friday.
States have been urging Congress to pass a six-year transportation funding bill so they will be in a better position to make long-term plans.
About two-thirds of the money GDOT spends on capital improvements comes from the federal highway trust fund.
Road building, a billion-dollar industry in Georgia, expects to take a hit because of the slowdown in construction, said David J. Moellering, executive director of the Georgia Highway Contractors Association.
“As these projects they have going on now come to an end and they don’t have any more work, there are layoffs,” Moellering said. “We will see job reductions because of it over time.”
Across the nation, construction contract awards for transportation projects are down about 10 percent for the first half of this year compared to the same period last year. And at least 30 states have said they would consider delaying projects if Congress did not solve the highway trust fund crisis, said Alison Premo Black, chief economist for the American Road & Transportation Builders Association.
“The bottom line is that the uncertainty over the last few months has already affected the market in these states as the summer construction season is in full swing,” Black said.
With sustained federal funding appearing increasingly uncertain, GDOT said it will scale back on authorizing new projects to be bid out for construction starting in October. It’s too soon to say which projects will be affected, how many there will be or how much they will be worth. GDOT staff is currently evaluating which projects can be delayed, according to Dale.
Georgia Republican U.S. Sen. Johnny Isakson said earlier this week that Congress should “think outside the box” to rework the way it spends money on road projects and not just raise the gas tax.
“They kick the can down the road until May of next year,” said Isakson. “We’re still lacking a real reform.”
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