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The Next Big Economic Crisis Is About To Cause Huge Cuts In Federal Highway Funding
Business Insider ^ | July 1 2014 | Brett LoGiurato

Posted on 07/01/2014 10:47:02 AM PDT by PoloSec

In a letter Tuesday, Transportation Secretary Anthony Foxx warned the Obama administration will begin delaying reimbursements to states for infrastructure projects on Aug. 1 if Congress cannot come up with a solution to replenish the diminishing Highway Trust Fund. This move could create problems for highway and road construction profits at the height of the summer travel season.

Foxx's letter, which was directed to state transportation officials, said checks to states will only be sent twice a month and will only be partial reimbursements. States typically receive "same day" reimbursements for many construction projects.

The Department of Transportation is undertaking the new procedures to keep a positive balance in the Highway Trust Fund, in which the department expects a shortfall beginning sometime in August. The fund is financed through gasoline taxes, which have not been raised in decades and currently provide inadequate revenue. Both parties in Congress disagree on how to solve the problem. In his letter, Foxx said states will experience cuts in federal funding until Congress finds a long-term solution to the crisis.

"The Department will continue to take every possible measure to fully reimburse your State for as long as we can. However, as we approach insolvency, the Department will be forced to limit payments to manage the reduced levels of cash available in the Trust Fund," Foxx wrote in the letter. "This means, among other things, that the Federal Highway Administration will no longer make 'same-day' payments to reimburse States."

The Department of Transportation said, on average, states should expect a 28% cut in federal funds for construction projects. This dire warning comes as President Barack Obama is set to ramp up pressure on Congress to find a solution to the shortfall. Obama is set to speak about the issue Tuesday on the Georgetown waterfront

(Excerpt) Read more at businessinsider.com ...


TOPICS: Government; News/Current Events
KEYWORDS:

1 posted on 07/01/2014 10:47:02 AM PDT by PoloSec
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To: PoloSec

How bout we just cut all the extra spending that uses highway funds to build bike paths and rain gardens.


2 posted on 07/01/2014 10:52:02 AM PDT by cripplecreek (Remember the River Raisin.)
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To: PoloSec

Just another way to punish us because he has had a bad week.


3 posted on 07/01/2014 10:52:30 AM PDT by kevslisababy
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To: PoloSec

:: The fund is financed through gasoline taxes...
The Department of Transportation said, on average, states should expect a 28% cut in federal funds for construction projects. ::

So, will we see a corresponding 28% reduction in gasoline taxes?

Ha Ha Ha Ha Ha Ha Ha Ha Ha
I kill me!


4 posted on 07/01/2014 10:53:24 AM PDT by Cletus.D.Yokel (Catastrophic Anthropogenic Climate Alteration: The acronym explains the science.)
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To: PoloSec

Gee, with Obama’s economy surging along at -3% let’s raise fuel prices!

FORWARD COMRADES!


5 posted on 07/01/2014 10:53:52 AM PDT by Oldeconomybuyer (The problem with socialism is that you eventually run out of other people's money.)
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To: PoloSec

Reporting of government spending on highways and other infrastructure is so filled with lies and distortions that it isn’t funny. You can never get a real picture of whether there is adequate funding for real infrastructure projects, like repairing roads and bridges. “Infrastructure” includes a lot of “green” projects these days, like bike paths and walking trails, as well as useless highway spending like multi-million dollar electronic billboards that really aren’t necessary. Plus bids are inflated by overpriced union labor and awards to crony capitalist contractors who get them because of who they know. I suspect that even with these “huge” cuts, there would be enough money to fund the really necessary projects at competitive rates.


6 posted on 07/01/2014 10:55:18 AM PDT by Opinionated Blowhard ("When the people find they can vote themselves money, that will herald the end of the republic.")
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To: PoloSec
Hey I know what!

Let's put on another 50 cent / gallon gas tax.


7 posted on 07/01/2014 10:58:07 AM PDT by nascarnation (Toxic Baraq Syndrome: hopefully infecting a Dem candidate near you)
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To: PoloSec

take it from welfare and foreign aid to terrorist organizations and countries, ie every moosie country and entity.


8 posted on 07/01/2014 11:04:56 AM PDT by bravo whiskey (we shouldn't fear the government. the government should fear us.)
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To: nascarnation

How about if we just eliminate all federal gas tax, the federal department that is supposed to be administering the program and let the states deal with it on their own.


9 posted on 07/01/2014 11:11:06 AM PDT by Grams A (The Sun will rise in the East in the morning and God is still on his throne.)
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To: cripplecreek

Lets work to get fuel prices lower more people driving buying fuel paying fuel taxes to create more revenue.

In stead of forcing people not to drive thus not buying fuel thus lower revenue.


10 posted on 07/01/2014 11:13:46 AM PDT by riverrunner
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To: PoloSec

SLASH WELFARE!

Save Urban Feral bastards from obesity!


11 posted on 07/01/2014 11:13:48 AM PDT by GladesGuru (Islam Delenda Est. Because of what Islam is - and for what Muslims do.)
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To: PoloSec

This is the National Park Service shutdown all over again. Another Obama spite freakout.


12 posted on 07/01/2014 11:19:38 AM PDT by Paine in the Neck (Socialism consumes EVERYTHING)
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To: Cletus.D.Yokel
and a corresponding 28% reduction of DOT personnel...
13 posted on 07/01/2014 11:21:25 AM PDT by stylin19a (Obama ----> Fredo smart)
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To: Oldeconomybuyer

well hey you’re killing the world driving your car. besides a car is a luxury today. you don’t need all that indepedence and freedom anymore. that kind of talk is terrorist talk.


14 posted on 07/01/2014 11:24:13 AM PDT by Secret Agent Man ( Gone Galt; Not averse to Going Bronson.)
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To: Opinionated Blowhard

The article try’s to imply something devious with “same day payments”. That’s not how it works. The contractor submits his monthly expenses, which are reviewed by the contracting agent and adjusted if necessary. The agency submits that bill for payment to the funding agency. If the funding agency has electronic funds transfer it may take a a week or two to reimburse the contracting agency. Then the funding agency submits to FHWA for reimbursement.

Some contracting agencies may have enough cash on hand to pay contractors but not likely on projects with monthly claims over more than a few hundred thousand so most agencies delay release of the check until it receives the reimbursement. State DOTs float their gas tax revenues to reimburse the contracting agency and then wait on the fed reimbursement.

In all of the public works contracts I have ever worked on none was ever awarded to any “crony contractor”. Of course we don’t have the level of corruption out west like the entrenched folks on the east coast or mid west.

Every project we do goes under the anal microscope of a fed and state audit so I don’t understand why more corruption that we hear about isn’t caught.


15 posted on 07/01/2014 11:36:30 AM PDT by shotgun
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To: PoloSec
I don't believe gasoline taxes go into any trust fund.
16 posted on 07/01/2014 11:44:07 AM PDT by mosaicwolf (Strength and Honor)
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To: PoloSec

They could start with Bill Clinton’s .043 cents gas tax in 1993, which was implemented not for roads, etc., but for the “General Treasury”. I think it was the first time in that tax’s history, that taxes imposed went elsewhere.


17 posted on 07/01/2014 12:01:42 PM PDT by Oatka (This is America. Assimilate or evaporate.)
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To: PoloSec
Every gallon of gas is taxed $0.25 to $0.50 with the funds targeted for highway infrastructure.

Instead it is being spent on obama phones and welfare payments to illegal aliens who send the money to their families South of the border.

The first sure sign of collapse of a socialist state is the decay of its roads and transportation infrastructure as the money intended for infrastructure upkeep is diverted to paying off welfare layabouts.

Good examples of this are Detroit, much of the East Coast Urban areas and pretty much all of California

18 posted on 07/01/2014 12:18:47 PM PDT by rdcbn
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To: rdcbn

Roads down here in Texas are just fine. We will just cut the federal gas tax and make due on our own thank you.


19 posted on 07/01/2014 1:19:31 PM PDT by EQAndyBuzz (Once a politician has determined to do anything to keep his seat, he no longer deserves it.)
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To: PoloSec

Shovel ready.

I guess an extra trillion of rolled over stimulus just wasn’t enough.


20 posted on 07/01/2014 2:57:09 PM PDT by Organic Panic
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To: PoloSec

How about we cut entitlements for a bit?


21 posted on 07/01/2014 2:59:17 PM PDT by GeronL (Vote for Conservatives not for Republicans)
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