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Road projects delayed because of federal shortfall

The trust fund is the main way states pay for most major construction projects. The money comes from the federal gas tax drivers pay at the pump - 18.4 cents per gallon for gasoline and 24.4 cents per gallon for diesel fuel.

By Adam Beam
The Associated Press

7/3/2014

FRANKFORT, Ky. — Kentucky transportation officials have delayed $185 million worth of road construction projects - including a project to widen a dangerous stretch of I-65 -because of a looming shortfall in the federal Highway Trust Fund.

The trust fund is the main way states pay for most major construction projects. The money comes from the federal gas tax drivers pay at the pump - 18.4 cents per gallon for gasoline and 24.4 cents per gallon for diesel fuel.

That gas tax has not increased since 1993, and the fund has slowly been running out of money. Congress has had to transfer money into the fund to keep it solvent.

U.S. Transportation Secretary Anthony Foxx joined Democratic Gov. Steve Beshear at the state Capitol on Wednesday to urge federal lawmakers to fix the problem by Aug. 1 or else states will begin to see cuts of at least 28 percent. For Kentucky, that could mean losing more than $180 million per year.

Beshear said the state has already delayed projects as a precaution, including a project to widen a stretch of I-65 near Elizabethtown. The road has been the scene of several high profile fatal crashes, including a wreck that killed a groom returning from his wedding in 2011 and a crash that killed a family of six from Wisconsin in 2013.

"While we hope to go out for bid on them in August we're not sure that we're going to be able to and that is devastating," Beshear said. "Because of Congress' inaction, that project is on hold. And the risk to drivers because of safety concerns is growing every day."

Beshear and Foxx did not call any names on Wednesday, but they did tout a plan that has been endorsed by Democratic U.S. Senate candidate Alison Lundergan Grimes, who is challenging Senate Minority Leader Mitch McConnell. The plan would tax the overseas profits of American corporations to help stop the shortfall in the trust fund.

"The country that is expecting 100 million more people by 2050, a country that will basically need to double its freight capacity over that same time, this is the opposite of what we should be doing as a country," Foxx said.

But McConnell and others have rejected that plan because it would raise taxes. A McConnell spokesman said the senator understands the "critical importance" of Kentucky's transportation projects.

"The Democrats in Congress have already rejected the President's idea and instead are working in a bipartisan, bicameral way to find solutions and those discussions are underway," spokesman Robert Steurer said. "Senator McConnell looks forward to the full Senate addressing this important extension once (Senate Majority Leader Harry) Reid brings the issue to the Senate floor for consideration."

U.S. Rep. Thomas Massie, a northern Kentucky Republican who serves on the House Transportation and Infrastructure Committee, said Congress should cut some of the $80 billion in foreign aid to Afghanistan to make the Highway Trust Fund solvent.

"Congress has spent $80 billion dollars of non-military aid in Afghanistan, and has promised another $20 billion," he said. "It's time to focus on our transportation infrastructure at home instead of sending U.S. taxpayer money overseas to build infrastructure."

Kentucky Transportation Cabinet Secretary Mike Hancock said the risk is not to the state's road fund - which has a balance of more than $500 million - but in not being reimbursed from the federal Highway Trust Fund as state officials had expected.

"Our biggest concern is as we look ahead, as the stack of IOUs mount, obviously the decisions become more and more difficult about how we use road fund cash to offset that," he said.
 

The Trucker staff can be reached to comment on this article at editor@thetrucker.com.

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