Road woes for U.S. coming soon, Texas funding slashed
POSTED: Tuesday, July 8, 2014 - 4:41pm
UPDATED: Thursday, July 10, 2014 - 3:00pm
TEXAS (KETK) -- — The U.S. Department of Transportation’s highway trust fund and mass transit accounts are running out of money—fast. That poses a problem when it comes to funding for our Texas roads.
The U.S. Department of Transportation funds a big chunk of TXDOT’s budget according to a spokesperson for TXDOT in Austin, 47 percent of the Texas transportation budget comes from federal funds through reimbursements. But, by September of 2015 the USDOT will run out of money to help supply those reimbursements. An estimated 29 percent of those funds will be slashed for Texas.
The entire country is dealing with transportation budget cuts across the board. According to the U.S. Department of Transportation’s website, a cash management plan will begin August 1, to manage the flow of federal dollars. Under the plan, reimbursements to states for infrastructure work will be limited to the available cash in the highway trust fund account.
TXDOT issued this statement to KETK News Tuesday regarding the funding changes:
“TxDOT is committed to improving safety and mobility for drivers, and as such, the agency is always planning for the future. Thanks to the Texas Legislature, we have a tool that allows us to borrow money on a short-term basis during the continued instability of the federal Highway Trust Fund. TxDOT will continue progress on active projects to keep Texas transportation moving forward. In order to continue to effectively work with our local partners and plan future projects that will improve safety, address congestion and help with our state's economic prosperity, It's imperative Congress enact a long-term solution to the looming federal funding situation.”
TxDOT tells KETK News those ‘tools’ to get the temporary funding will come from loans. In order to ensure that contractors in Texas are paid on a timely basis, Section 49-m, Article III, of the Texas Constitution provides that the legislature may authorize the Texas Transportation Commission to authorize the Texas Department of Transportation to issue notes or borrow money from any source to carry out the functions of the department. The department is currently able to borrow up to $750 million under this option.
From the U.S. Department of Transportation:
As the two graphs below indicate, both the Highway Account and the Mass Transit Account of the Highway Trust Fund are nearing insolvency. With the Highway Account expected to become insolvent by the end of August, the Department of Transportation will implement a cash management plan beginning August 1 to manage the flow of federal dollars. Under this plan, reimbursements to states for infrastructure work will be limited to the available cash in the Trust Fund. We will distribute incoming funds in proportion to each state’s federal formula apportionment in the fiscal year.
Based on current spending and revenue trends, the U.S. Department of Transportation estimates that the Highway Account of the Highway Trust Fund will encounter a shortfall before the end of fiscal year (FY) 2014.
• The Highway Account began FY 2014 with approximately $1.6 billion in cash.
• A $9.7 billion transfer from the General Fund to the Highway Account was processed shortly after the start of the fiscal year ($10.4 billion authorized in MAP-21, reduced by sequestration).
• The cash balance has dropped by nearly $3.8 billion since the General Fund transfer occurred. As of May 30, 2014, the Highway Account cash balance was $8.1 billion.
Mass Transit Account
Based on current spending and revenue trends, the U.S. Department of Transportation estimates that the Mass Transit Account of the Highway Trust Fund will have a balance of approximately $1 billion at the end of FY 2014.
• The Mass Transit Account began FY 2014 with approximately $2.5 billion in cash.
• A $2 billion transfer from the General Fund to the Mass Transit Account was processed shortly after the start of the fiscal year ($2.2 billion authorized in MAP-21, reduced by sequestration).
• The cash balance has dropped by nearly $1.7 billion since the General Fund transfer occurred. As of May 30, 2014, the Mass Transit Account cash balance was $2.8 billion.