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Iowa Road Work Peaks, Federal Funding in Question

A funding crisis could develop if Congress doesn't come up with money by July for the Highway Trust Fund.

Wed June 18, 2014 - Midwest Edition

DES MOINES, Iowa (AP) Summer is peak road construction time in Iowa and work has begun on many projects on the Iowa Department of Transportation’s list of priorities for this year, but questions about whether federal money will continue to flow has state officials concerned.

A funding crisis could develop if Congress doesn’t come up with money by July for the Highway Trust Fund, which provides about half the funding for Iowa DOT road projects.

The federal highway fund gets more than 90 percent of its money from federal fuel taxes. In recent years as motorists have driven fewer miles and fuel efficiency improved, fuel demand has dropped, cutting the amount of money received from the fuel tax. That means revenue for the highway fund is unable to keep pace with historic funding levels for road projects.

The 18.4-cents-a-gallon federal gasoline tax and the 24.4-cents-a-gallon diesel tax haven’t been increased since 1993.

Congress has in the past few years transferred billions of dollars from the federal government’s general fund into the highway fund.

The U.S. Department of Transportation estimates the balance in the highway account will drop below $4 billion in July and without a cash infusion, federal reimbursement for road projects will be cut back.

“That’s the trigger for USDOT and the Federal Highway Administration to start doing partial reimbursements to keep the highway trust fund solvent,’’ said Stuart Anderson, director of the Iowa DOT’s Planning, Programming and Modal Division.

State transportation officials are running scenarios for different levels of reimbursement and assessing how the state could make use of its existing cash balance to pay contractors.

“We are looking at those different scenarios now so we’re prepared. That’s something we’re hopeful we’ll be able to mitigate if it happens,’’ Anderson said.

The Iowa DOT Web site lists 57 highway projects under construction ranging from installing guardrails to bridge replacements and major road paving projects.

Construction has begun on an Interstate 35 project in West Des Moines to increase vehicle capacity, a complete reworking of the Altoona interchange of U.S. Highway 65 and Interstate 80, and grading work for Iowa Highway 100 around the northwest quadrant of Cedar Rapids. In addition, major interstate projects in Sioux City and Council Bluffs are ongoing.

The U.S. Senate Finance Committee is responsible for coming up with a plan to keep the highway fund solvent. Committee Chairman Rod Wyden, an Oregon Democrat, said in a May 6 hearing about 6,000 projects nationwide could be halted if funding dries up this summer. He said it will take $10 billion to keep the highway fund solvent through this calendar year and another $8 billion to get through fiscal year 2015, which begins in October.

Failure to provide money for next year would cut Iowa’s planned projects of more than $600 million in half, Anderson said. Cities and counties also get a portion of their transportation funding from the federal government and would be affected, too.

State, county, and municipal governments maintain more than 114,000 miles of roads and nearly 25,000 bridges in the state, the Iowa DOT said.

The Iowa Transportation Commission has developed a plan for delaying certain projects next year if federal money isn’t available. Commissioners will consider several factors including the amount of money the state DOT has on hand, the length of time a project has been considered, and current need for the project.

It will take about $100 billion to keep the highway fund solvent for at least six years, Wyden said.

“Relying on short-term policies, emergency patches, and temporary extensions makes forward-looking strategies impossible, and when it comes to infrastructure, planning ahead is absolutely essential,’’ he said.

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