Funding shortfall could happen by mid-July

The Federal Highway Administration (FHWA) has been briefing members of the relevant House and Senate committees about the revenue shortfall in the Highway Trust Fund that could cause a slowdown in payments to states as early as mid-July.

The Obama administration has indicated that an infusion of $5 billion to $7 billion will be necessary soon in order to fully fund existing commitments through Sept. 30, 2009, or the end of FY 2009.

At a hearing this week on the nomination of Victor Mendez for FHWA Administrator, Senate Environment and Public Works Committee Chairman Barbara Boxer (D-Calif.) reported that in addition to the funds needed for FY 2009 an additional $8 billion to $10 billion will be necessary to get through FY 2010. The president’s budget indicated that as much as $36 billion could be needed in FY 2010 to prevent a shortfall in funding.

At a hearing before the Senate Appropriations Transportation Subcommittee, Transportation Secretary Ray LaHood indicated that the administration will be working with Congress to ensure that this cash flow problem does not result in a slowdown in payments to states to reimburse ongoing highway construction.