State’s future federal highway funding uncertain

2013-10-01T18:30:00Z 2013-10-02T17:19:06Z State’s future federal highway funding uncertainBy CHARLES S. JOHNSON Gazette State Bureau The Billings Gazette

HELENA — Some state highway construction projects are still up for bid in mid-November, but the state transportation director said the agency doesn’t know how much federal money it will receive in the future.

Mike Tooley, director of the state Department of Transportation, told the Legislature’s Revenue and Transportation Committee that the department is one of state government’s largest recipients of federal funds.

“I can assure you that the Montana Department of Transportation Department is still in business and the federal highway trust fund is still in operation,”

Tooley said.

The department had $60.17 million in working capital left when the fiscal year ended June 30, including $46.5 million left in cash.

The department now collects about $280 million annually from the state taxes on gasoline, diesel, aviation tax, gross vehicle weight fees and permits, indirect costs and miscellaneous revenues, interests, fines and penalties, he said. Of that, Tooley said nearly $60 million of this fund annually goes for payments to tribal and local governments, the Justice Department for the Highway Patrol and Motor Vehicle Division and for other uses.

He said the department has begun its second year of the two-year federal highway authorization bill, which expires Sept. 30, 2014.

The state received $392 million in federal funding in fiscal 2014.

Congress has passed a continuing resolution through Dec. 15, which would provide the state Transportation Department with about three months of funding at the 2013 level or about $79 million.

“There is no impact on project lettings or MDT’s ability to pay bills – yet,” Tooley said. “We won’t know the full 2014 funding level until Congress passes a full-year appropriations bill.”

He said it’s possible Congress could continue to pass more short-term continuing resolutions rather than a full-year bill, leaving the state department to manage the program and lettings based on the available funding.

“Should the highway trust fund become insolvent in federal fiscal year 2015, the money we receive from the state and gas tax will be the only fund available for the Department of Transportation highway program,” Tooley said.

Tooley said there is a separate federal highway trust fund “fiscal cliff.” If not resolved, the national program funding would drop from $40 billion in 2014 to $200 million. Montana’s share of federal money would plummet to $1.9 million in 2015.

“If that happens the consequences would be devastating in 2015,” he said. “If that happens, we would just rely on state sources. Montana with our small population could never afford the highway program we have now.”

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