$8 billion refuels road projects

Transportation Secretary Mary Peters had warned that unless the federal government put $8 billion into the Federal Highway Trust Fund, any state relying on federal funding for road construction projects would be shorted. Starting immediately.

The American Road and Transportation Builders Association, an advocate group for the transportation and construction industry, estimated that 379,000 workers would have been out of a job without the bailout.

Nevada, right along with the rest of the nation, was in a hard spot.

"We were in a bit of a panic on that, because of what it meant for the state of Nevada; there was a possibility of a $110 million per year cut," said Susan Martinovich, director of the Nevada Department of Transportation. "We only get about $225 million a year. So $110 million is a big hit to us, and we were strategizing on what we were going to do."

Nevada is in better shape than others, at least upfront, when it comes to paying for projects. The state is able to put the money upfront for projects and then seek to be reimbursed by the federal government.

Of course, this money crisis would have changed all that.

Martinovich explained, "Instead of paying us back daily … they were going to slow down those payments, and thus that meant that we were carrying the burden of the cash flow and that was critical to us."

Or, in the words of Kermit the Frog, it was time to "PANNNNNNNIC!"

For Nevada, Martinovich said it would have meant making more cuts to future projects. Construction already under way on Interstate 15 would have continued.

"Nothing would have been stopped that was already under way," she said. But she hinted that the Transportation Department had considered halting future work on the Interstate 580 project in Reno.

President Bush had threatened to veto any plans to take $8 billion from the Treasury and move it to the highway trust fund, but changed his mind in the face of Peters’ dire warning.

The Senate and the House have passed the rescue funding and Bush was expected to sign it. Nevada’s representatives in the House all voted for the bill. The Senate passed the bill on a voice vote that was urged on by Senate Majority Leader Harry Reid, D-Nev.

Passage of the money transfer guaranteed that projects like the widening of U.S. Highway 93 on the Arizona side of the Colorado River will move forward.

After the vote, the American Road and Transportation Builders Association released this statement:

"The cash-flow crisis that is being temporarily averted by this action should be taken as a wake-up call for the new Congress and president — the federal responsibility to make the surface transportation capital investments necessary to keep the American economy growing cannot be sustained with a static, 15-year-old gas tax rate."

That statement refers to the federal fuel tax — 18.4 cents for a gallon of gasoline and 24.3 cents for a gallon of diesel — that makes up the highway trust fund.

Congress has not voted to increase that tax since 1993, even though the cost of construction and supplies like asphalt has inflated faster than me at a casino buffet.

There wasn’t much of a problem until gasoline prices skyrocketed this year. Just three years ago, there was a $10 billion surplus in the fund. And now there’s an $8 billion deficit.

And it’s only going to get worse as we all drive less and buy more fuel-efficient vehicles.

Though I believe it will eventually come to pass that commuters will be charged for miles driven instead of the amount of gasoline used, that is still years away.

And chances are there’s going to be another shortfall in the highway trust fund next year.

Martinovich told me that the talk nationally is that the federal fuel tax must be raised.

If not, the burden will fall on the states, which will face the choice of raising taxes or letting needed road projects die and getting used to potholes as a way of life.

Nothing like that is going to happen until after the November election. And don’t expect too much talk about it by those running for office.

It also means that whoever is elected president is going to have one a hell of a problem on his hands starting day one.

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