KDOT bracing for possible federal cutbacks

? The South Lawrence Trafficway and the “Gateway” interchange project in Johnson County are among the major highway projects in Kansas that could be affected if, as projected, the Federal Highway Trust Fund runs out of money sometime next month.

But officials at the Kansas Department of Transportation say they believe they have enough resources to weather the storm, at least for a few months.

“We’re in better shape than some states because we have dedicated funding sources that are not federal sources,” KDOT spokesman Steve Schwartz said. “We’ve said all along if the fund stopped delivering money to us, we could go three to six months before any impact on our construction program.”

Kansas is now in the fifth year of a 10-year transportation program known as T-WORKS, a $7.8 billion highway construction program that is largely funded with federal dollars. State officials have said as many as 175,000 jobs in Kansas are tied, either directly or indirectly, to that program.

The looming shortfall in the federal highway fund is one that officials in Washington have known about for some time. Its revenue comes from the federal fuel tax, which is considered a kind of user fee. It’s currently set at 18.4 cents per gallon for gasoline and 49.9 cents per gallon for diesel — rates that have not changed in about 20 years.

But fuel economy has changed over that time. As new cars and trucks have become more efficient, they use fewer gallons of gas, resulting in less revenue flowing into the trust fund.

According to the U.S. Department of Transportation, the trust fund began the current fiscal year on Oct. 1 with $1.6 billion in cash. Congress pumped in $10.4 billion of general fund money that was authorized under a federal highway program called MAP-21. By the end of May, the balance had been drawn down to about $8 billion.

On Wednesday, U.S. Transportation Secretary Anthony Foxx sent letters to KDOT and other state highway departments saying that unless Congress acts to address the shortfall he would implement “cash management” procedures to reduce spending out of the fund.

That would involve apportioning the available money to states based on a federal formula that determines what percentage of the overall fund each state receives.

“Starting in August, DOT will use those same percentages to determine how much each state will receive of whatever amount is left in the trust fund,” Foxx said. “Reimbursements to states will be limited to the available cash in the trust fund, and new revenues will be added every two weeks as money from the gas tax flows into the Fund.”

Impact on Kansas

Schwartz said KDOT typically receives about $360 million a year in federal funds, or about 25 percent of the state agency’s overall budget.

But that money is especially important this year, Schwartz said, because it is the biggest construction year scheduled in the state’s ongoing highway program known as T-WORKS.

This is the fifth year of the 10-year highway program, which is now estimated to total about $7.8 billion in construction costs.

Two of the biggest projects just getting underway are the South Lawrence Trafficway extension from Iowa Street, across the south side of town, linking up with Kansas Highway 10 east of Lawrence, and the so-called “Gateway” project in Johnson County, which involves reworking the interchange of K-10 and Interstates 35 and 435.

The SLT project is budgeted at $186 million, of which $140 million is expected to come from federal dollars. It is scheduled for completion in late 2016.

The Gateway project, one of the largest single public works projects in state history, is budgeted at $290 million in construction costs alone. Almost all of that — $267 million — is expected to come from federal money. It’s also scheduled for completion in 2016.

Washington stalemate

Several proposals have been floated in Washington to address the shortfall. But as with many other issues, there is little agreement so far between the congressional Republicans and Democrats, and the Obama administration.

Republican leaders in the House recently offered a plan for a short-term transportation bill that would be funded with revenue from rolling back Saturday postal deliveries — a proposal that Sen. Barbara Boxer, D-Calif., who chairs the Senate transportation committee immediately labeled “unworkable.”

House Democrats, on the other hand, have proposed shoring up the fund by eliminating tax breaks for corporations that repatriate overseas, an idea favored by the White House but immediately dismissed by Republicans who oppose any form of tax increase.

Members of the Kansas congressional delegation were noncommittal about what proposals they would support.

“Congresswoman (Lynn) Jenkins is working with Ways and Means Committee Chairman Dave Camp (R-Mich.) to find a bipartisan solution that will ensure the highway trust fund gets the necessary funds to keep our transportation projects on track,” Jenkins’ spokesman Tom Brandt said. Jenkins, a Republican, represents the 2nd District of Kansas, which includes Lawrence.

Sen. Pat Roberts, a Republican, “understands the importance of transportation infrastructure to the state and is working in earnest with colleagues on both sides of the aisle to find a solution that gets us through the remainder of the year,” his press secretary, Sarah Little, said in an email. “We are confident something will get done when we come back from the 4th of July recess.”