The Shumlin Administration is developing a contingency plan to make certain that a lack of federal funds doesn’t delay dozens of critical highway projects across the state this summer.
Unless Congress acts by the middle of July, the federal Highway Trust Fund is going to run out of money. This is happening because many states have launched ambitious road construction projects and these projects are financed using matching federal funds.
Revenues from the gas tax that support the fund have also been affected because people are driving more fuel-efficient cars.
"So we have sufficient cash flows to cover this shortfall in federal dollars." Treasurer spokesperson Dylan Giambatista on the plan to tap into the state's cash flow account.
Transportation Secretary Brian Searles says if this funding problem isn’t solved, most states will lose about a third of their federal highway money during this summer’s construction season. The shortfall could cause Vermont to delay dozens of critical projects.
That’s why Searles is developing a contingency plan with State Treasurer Beth Pearce to tap into the state’s cash flow account, on a short term basis, to ensure that all of these projects stay on schedule.
“We’ve been working with the treasurer’s office to see what our tolerance is,” said Searles. “We think at this point that we could go to about $15 million before we’d have to consider taking corrective action in terms of moving projects.”
Dylan Giambatista is a spokesman for Treasurer Pearce. He says dipping into the state’s cash flow account isn’t a problem because the state knows that the federal government will eventually pay the state back:
“So we have sufficient cash flows to cover this shortfall in federal dollars,” Giambatista said. “Now those cash flows, they go up and down depending on what kind of payments we’re sending out, but we exercise fiscal prudence to make sure we have the cash flow intact to meet those needs should they come up.”
Congressman Peter Welch says Congressional leaders appear to be working on a very short-term solution to the funding problem and he’s not pleased with this approach.
“That’s just a dumb way to proceed. This nation needs to rebuild our roads and bridges they’re in woeful repair,” said Welch. “And Congress is in denial if it thinks that the potholes are going to fix themselves. So we have to come up with a funding source that’s sustainable.”
Welch says he’s willing to support a plan to increase the federal gas tax if the money is dedicated to the long term solvency of the federal Highway Trust Fund.
