Friday, September 5, 2008

Highway Trust Fund Shortfall Could Cause State Highway Projects to be Canceled

JEFFERSON CITY - Today's announcement by the U.S. Department of Transportation that it would curtail federal highway payments to the states could cause Missouri road and bridge projects to be delayed or even canceled. If Congress fails to provide $8 billion to the Federal Highway Trust Fund as requested by U.S. Secretary of Transportation Mary Peters, it could mean Missouri would lose $252 million, which translates to 8,770 jobs lost.

"If Congress doesn't act to shore up the funding in the Federal Highway Trust Fund, we will have to take a hard look at the projects we have planned in our five-year construction program to determine if we'll be able to move ahead with them," said Missouri Department of Transportation Director Pete Rahn. "This will have a devastating ripple effect, because it could mean lost jobs and less business for suppliers and contractors. Our communities will feel the blow, as will the driving public."

The trust fund is primarily funded by federal fuel taxes - 18.4 cents a gallon on gas and 24.4 cents on diesel. Rising fuel costs have sped the depletion of the trust fund. Fewer miles driven and more fuel-efficient vehicles mean fewer gallons of gas bought and lower than expected revenues. In Missouri, fuel tax revenues for July and August were down 8.7 percent compared to last year. About 70 percent of MoDOT's highway construction budget is federally funded.

"This problem has been building for three years, but little to nothing has been done to correct it," Rahn said. "It's time for Congress to use general revenue to reimburse the highway trust fund. Even if that happens, it will just be a short-term fix. In the long run, we need to find better ways and new funding mechanisms to support our nation's vital transportation system."

Editor's note: Taped comments by MoDOT Director Pete Rahn are available on MoDOT's newsroom,