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OregonLive: Less driving means Oregon gets less federal money for highways

by Dylan Rivera, The Oregonian

Friday September 05, 2008, 10:10 PM
Starting next week, the federal government will slash the money it pays Oregon and other states for major bridge and highway projects.

Millions of dollars that Oregon receives daily in reimbursements for federal highway repairs and improvements will be slowed to weekly payments — and, over the next several weeks, likely cut by one-third. That’s because a federal fund dedicated to highway projects is running dry.

It was unclear Friday what effect that would have on current Oregon construction projects. But state and federal officials said it would not curtail them.

The news did raise questions, however, about the ability of the federal government to pay for major projects, such as a proposed $4.2 billion Interstate 5 bridge over the Columbia River.

To stem the financial crisis, the Bush administration urged the Senate to approve a House spending bill next week that the president had previously threatened to veto.

Reduced driving by Oregonians and most Americans is the cause for the shortfall. An 18.4-cents-a-gallon federal gasoline tax hasn’t changed since 1993, and less gas used for less driving means less revenue, even as motorists pay higher prices at the pump.

The decline in driving has confounded efforts to predict when the highway trust fund crisis would come up, said Travis Brouwer, federal affairs adviser for the Oregon Department of Transportation.

“The incoming revenue has been unstable,” Brouwer said. “We can’t look to the past to provide an accurate estimate on how much will come in in the next year.”

Transportation planners nationwide have known for years that the highway trust fund was headed for a crisis. A bipartisan commission spent two years studying the issue and concluded in January that a 40-cent-a-gallon gas tax hike was needed.

“The crisis is now,” the commission’s report said in January.

You could say the crisis actually arrived Friday.

The Federal Highway Trust Fund will be about $300 million in the red this month — a year earlier than was forecast in 2005. The fund this month owes states $4.4 billion in reimbursements for the federal share of highway construction and repair projects. But it will have only about $4.1 billion from fuel tax revenue, including what was a starting balance of $1.4 billion.

For now, the U.S. Department of Transportation plans to reimburse states weekly. If the department estimates the fund has 20 percent less money than it promised to pay, it will only pay 80 cents on the dollar next week. The following week, it would first finish paying the previous week’s obligations, then pay a partial amount of that week’s bills.

“Over time, that gap will widen,” ODOT’s Brouwer said. He said the trade association for state highway departments estimated states would receive 60 to 70 percent of what they are owed in coming weeks.

U.S. Transportation Secretary Mary Peters, in announcing the shortfall Friday, blamed Congress for not acting sooner.

“Every family understands that constantly spending more than you earn is a recipe for insolvency,” she said. “Yet many in Congress have refused to apply that same common-sense thinking.”

Congress has resisted calls for less spending and the administration’s proposals to fill the highway fund’s gap, Peters said.

Bush had proposed taking money from a mass transit account and loaning it to the highway account. That was a nonstarter with Congress, in part because the loan would not cover an expected $8 billion shortfall in the budget year that starts Oct. 1.

And it would hasten the demise of the mass transit account, which also depends on fuel taxes and suffers from the same dim financial prospects as the highway account, Brouwer said. That could jeopardize mass transit projects that relieve congestion in Oregon, he said, “so we would not want to see its financial situation worsened.”

Oregon Rep. Peter DeFazio, one of the most influential members of Congress on transportation issues, blasted the administration.

“It’s about time this administration accepted the magnitude of the looming crisis facing the Highway Trust Fund and stopped being a roadblock to a solution,” the Springfield Democrat said.

“If we don’t pass a solution fast, we’ll be forced to cancel critical highway construction and repair projects that ensure our roads and bridges are safe and secure,” Sen. Patty Murray, D.-Wash., said Friday. “This crisis could lead to millions of construction layoffs across this country at a time when the unemployment rate is already the highest it has been in nearly five years.”

— Dylan Rivera: 503-221-8532; dylanrivera@news.oregonian.com. For environment news, go to: oregonlive.com/environment

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