Senate passes bill to fund highway trust fund
Posted September 10, 2008
Updated September 11, 2008
Raleigh, N.C. — The U.S. Senate voted Wednesday to put $8 billion into the Federal Highway Trust Fund, a move to stave off what could be crippling delays to federal aid for road and bridge projects nationwide.
The Senate voice vote came two days after Transportation Secretary Mary Peters said the trust fund would go broke by the end of this month. The bill is nearly identical to legislation based by the House in July. The House is expected to act soon and sent the bill to the president.
The Federal Highway Trust Fund pays for road and bridge projects nationwide. The primary funding source for the fund is a federal gasoline tax. But as motorists cut back on their driving, the federal government is losing about $3.2 billion that should go toward road construction projects.
If the fund went broke, North Carolina Department of Transportation officials said the agency could lose around $300 million, less than 10 percent of the DOT's $4 billion budget. About 10,000 industry jobs would be lost statewide.
Of the 330 projects planned for North Carolina for the next fiscal year, about 80 projects would be in jeopardy.
N.C. DOT spokesman Ernie Seneca said the agency is pleased with the Senate’s vote but will continue to “evaluate its options.”
The Federal Highway Administration will have to provide guidance to the states on when and how the reimbursements will come, Seneca said.
There had been discussion in Washington to raise the federal gasoline tax, among several other options, to fund the account.
Sen. Elizabeth Dole said in a statement Wednesday that she strongly supported Congress “taking immediate action to transfer sorely needed funds to remedy this situation for the short term, and reforming this deficient system must be a top priority in next year’s highway bill.”
“The Senate majority has blocked the debate process. Instead of just patching the problem, we need to focus on something more long term,” Chris Walker, Sen. Richard Burr's spokesman, said Wednesday.
Nationwide, transportation experts said at least 380,000 jobs and hundreds of construction projects are in limbo across the country if Congress fails to rescue the Federal Highway Trust Fund.
The state DOT began a hiring freeze Wednesday in order to prepare for the fund’s shortfall and bring the budget “back in line.”
A memo from Angela Faulk, the department’s director of human resources, said no new positions will be posted at the state DOT, but positions that have already begun the hiring process will be completed. The department will not be reallocating positions.
About 14,000 positions exist at the DOT. Nearly 1,900 jobs at the agency are vacant, but only 200 of those job vacancies have been posted.
“If the position has not been posted, it cannot be filled,” Seneca said.
Seneca said despite the Senate’s vote the hiring freeze will remain in effect until the agency can get a better idea about what the legislation will mean for the state.
N.C. DOT Transportation Secretary Lyndo Tippett said a freeze has also been placed on pay increases that normally come with promotions.
The freeze will remain in effect until “the Secretary determines our financial future as impacted by the U.S. Senate Highway Trust Fund Solvency Bill proposal now under consideration,” the memo said.
State Sen. Neal Hunt, a member of the legislative transportation oversight committee, believes a hiring freeze is a drastic, but necessary step.
“It’s a wise move. I commend Lyndo Tippett for being aggressive and taking action,” Hunt said.
In recent years, the department has been riddled by delayed and troubled road projects, including a botched paving job on a 10.6-mile stretch of Interstate 40 in Durham County that cost the department $21 million from its administrative budget to fix.
That prompted the DOT to spend $3.6 million for international management consultant McKinsey & Co. to evaluate the agency.
Among McKinsey's findings in its 472-page report was that the DOT's structure prevents divisions from working well with each other. It also identified a need to improve productivity, use key performance indicators and increase accountability within the department.