On Sept. 5, the U.S. Department of Transportation (DOT) announced that, effective Sept. 8, the Federal Highway Administration will delay financial reimbursements from the Federal Highway Trust Fund to all states. In the past, DOT had estimated it would remain solvent until summer 2009. However, tax receipts have been dropping sharply in recent months due mainly to record-high gas prices.
In a release to the media, Will Kempton, director of the California Department of Transportation (Caltrans), said, “This latest announcement from the U.S. Department of Transportation aggravates an already tight budget problem for California’s transportation program.
“We had projected that the state budget impasse could impact ongoing transportation construction projects by October,” he continued. “However, delays in federal reimbursements could exacerbate this situation.”
Kempton said that failure to resolve the issue could lead to the delay, reduction, or cancellation of transportation projects.
In July, Kempton sent a letter to Congress emphasizing the need to resolve the issue at the earliest possible date.
This article appears in Sep 11-18, 2008.