With highway money running out, DOT warns states of project funding cuts

Secretary Anthony Foxx

Department of Transportation head Anthony Foxx sent a letter to states July 1 telling them the DOT will have to start restricting reimbursement payments to states starting Aug. 1, unless Congress can act to shore up Highway Trust Fund cash flow before that date.

The DOT will only be able to provide reimbursement to states on federally appropriated projects based on actual tax receipts of the trust fund, and instead of “same-day” payments as is standard, the DOT will only be able to provide two payments a month to states, Foxx said in his letter, which was sent to directors at state transportation agencies.

States will receive their payments based on their federal formula apportionment for the 2014 fiscal year, Foxx says, which is “the most equitable and straightforward approach possible for managing the crisis,” he wrote.

According to the DOT’s ticker, the Highway Trust Fund is expected to run out of money in September. It’s funded through federal diesel and gasoline taxes, which, due to inflation and more fuel efficient vehicles, is no longer adequate at their current rates.

It’s up to Congress to pass a highway bill or other measure to find a new way to fund the HTF. Several bills have been proposed, but little has happened on any of them.

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Click here to see all of Overdrive’s coverage of highway funding and the highway bills introduced so far.