DOT: ND could lose funds for state highways
BISMARCK — North Dakota stands to lose almost a quarter of a billion dollars if Congress fails to pass a new federal highway bill and replenish the Highway Trust Fund this year, the state’s top transportation official warned this week, saying, “a crisis could be coming.”
President Barack Obama signed the two-year transportation funding bill known as MAP-21 in July 2012. It will expire Sept. 30.
North Dakota’s appropriation amounted to about $241 million in fiscal year 2013 and $229 million in 2014.
“The real challenge is what comes in 2015,” state Department of Transportation Director Grant Levi said last week.
In order to fund the bill through 2014, Congress had to reallocate $18.8 billion to the Highway Trust Fund. But there are concerns the fund could run out this summer before the bill expires, Levi said.
“In 2015, there will not be any federal program unless Congress takes some action and adds some additional resources,” he said.
Every year, U.S. motorists pay billions to support the Highway Trust Fund through taxes on fuel, tires, heavy-vehicle use and truck and trailer sales. Most of the revenue comes from the motor fuel excise tax, which is 18.4 cents per gallon for gasoline and 24.4 cents per gallon for diesel. The money is distributed to states based on formulas in federal law.
Levi said the DOT is planning projects with the assumption that federal funding will be at this year’s level, and it’s advising counties, cities and townships to do the same.
“Having said that, a crisis could be coming if something doesn’t happen at the national level,” he said.
Some projects simply wouldn’t get done, he said.
“Our state’s congressional delegation is working very hard to address these issues,” he said.
During a meeting last week in Bismarck to discuss growing road and infrastructure needs in western North Dakota, U.S. Rep. Kevin Cramer said he has started to see some functionality in Congress with the recent passage of the federal farm bill, and he believes the momentum will carry over into passage of a long-term transportation bill yet this year.
If that doesn’t happen, South Dakota will be even harder hit than North Dakota.
“We are essentially totally federal funded in our highway construction program,” said Kristi Sandal, public information officer for the South Dakota Department of Transportation, which received a federal allocation of $242 million for fiscal year 2014.
Minnesota Department of Transportation spokesman Kevin Gutknecht said the biggest impact of the predicted shortfall in the Highway Trust Fund in August or September is that state, county and city governments might have to cover federal reimbursement payments to contractors for a period of time.
While MnDOT and larger counties and cities have sufficient cash flow to cover those payments, smaller counties and cities don’t, he said.
As a result, “This uncertainty may affect how smaller counties and cities will plan projects during that period,” he said in an email.
Minnesota’s apportionment from the bill was $616 million in fiscal year 2014.
Levi said the business model used to pay for transportation funding at a national level isn’t working, noting vehicles are becoming more fuel-efficient and the number of miles traveled by motorists dropped nationwide with the economic recession.