Federal Transportation Funds to Decrease August 1

U.S. Treasury Secretary Anthony Foxx warned State DOT officials in a July 1 letter that due to declining funds in the highway account of the Highway Trust Fund, he will implement a new reimbursement policy that may cause some states to halt projects.

"In a (Monday) briefing with reporters, (Transportation Secretary Anthony) Foxx announced that he had sent letters to the Departments of Transportation of all 50 states that very morning outlining the steps the administration was planning to take as the trust fund approaches zero," writes Sam Stein, political editor and White House correspondent for The Huffington Post.

When the funds fall below the critical $4 billion threshold as expected on August 1, "states will no longer be reimbursed for transportation projects as they send in the bills. Instead, the administration will 'implement a new process of cash management' in which states will be paid every two weeks as revenues from the gas tax (which feeds the Highway Trust Fund) come in," adds Stein.

As a result, Stein notes that "(i)n some states, projects would be slowed down. In others they would be stopped altogether."

“I think it is going to be all over the map, but the reality is, no matter how you slice and dice it, it is going to be bad,” said Foxx.

Stein goes on to mention the Corker-Murphy Plan to reauthorize MAP-21 and provide the necessary funding by increasing gas taxes, but notes that "Foxx gave no indication that the White House would throw its weight behind a gas tax hike." As we have noted, the president prefers using a windfall that would result from his business tax reform proposal, and historically, Obama opposes increases the gas tax, presumably because he views it as increasing taxes on the middle class.

However, Foxx didn't close the door entirely on the president agreeing to a gas tax increase.

“If Congress comes up with a different combination, another formulation to get there, we said we will listen to what they have to say,” he said. “But they have to speak with one voice.”

Full Story: Obama Administration Plans To Dramatically Alter Transportation Funding For States

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