Federal Transportation Agency Alerts State Agencies to Transportation Funding Shortfall

This week, U.S. Department of Transportation (DOT) Secretary Anthony Foxx sent letters to State Transportation Agencies warning them of the impending Highway Trust Fund (HTF) insolvency, and the steps the agency would take starting on August 1, 2014.  Secretary Foxx’s letter reaffirmed the DOT’s commitment to fully reimburse states as funding allows, although this was tempered by the reality that the HTF is quickly reaching a critical point that will force the agency to implement cash management procedures to limit the amount and distribution of payments over a longer duration of time. 

States will receive payments based on the proportion of each state’s federal formula apportionment, which will fluctuate over time based on tax receipts flowing to the HTF.  In response to Secretary Foxx’s letter, Malcolm Dougherty, Director of the California Department of Transportation (Caltrans), issued a letter to all transportation stakeholders providing additional information on the DOT’s process for issuing state payments during this period of funding uncertainty.  Congress continues to evaluate various proposals to provide both short-term and long-term funding to restore HTF solvency.  In related news, the Congressional Budget Office reports that the highway account of the HTF will need an insurgence of $6.6 billion through the calendar year to avoid eliminating state transportation payments.

DOT Secretary Foxx’s letter to State Transportation Agencies can be accessed here.  Caltrans Director Dougherty’s letter to state transportation stakeholders can be accessed here.

Addressing the potential insolvency of the HTF as well as reauthorizing MAP 21 – the federal transportation funding program which is due to expire in September – remains a top priority of RCRC.  RCRC’s federal advocates remain engaged with Congressional leaders and their staff on efforts to provide funding to vital rural transportation programs.

For additional information, please contact RCRC Legislative Analyst Randall Echevarria at (916) 447-4806 or rechevarria@rcrcnet.org.