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Daily Journal of Commerce: Transportation fund gets help

Addition of $8 billion will prevent crisis, but Federal Highway Trust Fund is still likely to run dry in 2009

POSTED: 04:00 AM PDT Monday, September 15, 2008
BY TYLER GRAF

The Federal Highway Trust Fund is saved.

For now, that is.

The United States Congress last week passed legislation shoring up an additional $8 billion for the 52-year-old bridge and highway repair fund. The Department of Transportation had warned that the fund would run dry at the end of the month.

But the $8 billion is merely a stopgap before the fund runs out of money again in 2009.

Locally, the trust fund helps pay for the Sellwood Bridge planning project, an intersection project at Southeast 282nd Avenue and Stone Road, and the Martin Luther King Jr. Boulevard Viaduct, among many others.

Nationally, thousands of projects rely on the trust fund, and hundreds of thousands of workers rely on the employment supplied by those projects.

The Laborers’ International Union of North America had claimed prior to the legislation’s passage that if the trust fund ran out of money, it would result in the net loss of 380,000 construction jobs nationally, with about 4,500 of those coming from Oregon.

Employees of the Oregon Department of Transportation, however, aren’t so quick to look at the situation in such dire terms.

“Oregon was going to be OK for six to 12 months because of where we are in the budget and with cash flow,” said Patrick Cooney, a spokesman for Oregon Department of Transportation. “So, there would have been no immediate impact.”

That’s not to say the state coffers are overflowing. Steel, oil and asphalt costs have increased exponentially in the last year. Keeping pace with the increased costs has been difficult because Oregonians have begun driving less, thereby decreasing the state’s gas-tax revenue.

But at least there’s no uncertainty in the short term, state and county officials say, and the averted crisis may serve as a teachable moment when the trust fund becomes an issue again in 2009.

According to Jacob Hay – a spokesman for LIUNA, which lobbied on behalf of the federal legislation – the $8 billion will be able to pay for projects that are in the pipeline or that have already begun.

Nonetheless, the future of highway funding appears pockmarked and pothole filled. The American Society of Civil Engineers estimates that more than

$1 trillion will be required over the next five years to pay for the nation’s crumbling infrastructure.

“While applauding the actions to keep the fund from going broke, we are calling for a new comprehensive approach (because) our infrastructure challenges are too big for the patchwork approach of the past,” Hay said.

For Oregon’s trust-fund-subsidized projects, financing is typically split 80 percent federal and 20 percent state. If Oregon Transportation Investment Act money is also being used, then the percentages shift slightly depending on the amount of OTIA money used.

And though predictions are hard to come by, Multnomah County Bridge Services Manager Ian Cannon said if the trust fund does disappear for any considerable amount of time in 2009, then future projects such as the improvements to the Morrison Bridge may get stalled.

“Even with the $8 billion, if gas-tax receipts remain way below historic levels, (the trust fund) will have a tough time meeting its commitments in the slightly longer term,” Cannon said. “But the $8 billion should avert an immediate crisis.”

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