Feds to take back $742 million in highway funds

Link to article here. See also this news report on the rescissions from Jim Grimes. Read TURF’s Examiner and Express-News article that explains this accounting trick here.

$742 million in road funds previously promised to Texas to be taken back
Friday, Oct. 02, 2009

The government puts money for road work in one pocket, then takes it out of another. It’s the type of thing many motorists are no doubt tired of hearing, but it’s happening again.

Earlier this year, billions of federal Recovery Act dollars were sent to the states — including $2.25 billion to Texas — to speed up road improvements, improve congestion for motorists in clogged metro areas and boost the economy. Local officials were optimistic that, with the stimulus funding, long-delayed projects could finally get off the ground.

Now, in a separate move that may delay road work across Texas, the Federal Highway Administration, in an effort to balance its books, is taking back $8 billion in highway funds. The so-called rescissions includes the loss of $742 million in funds previously promised to Texas.

The action leaves North Texas road planners scratching their heads, wondering how they can keep projects on track.

“It really is a very strange situation,” said Amanda Wilson, spokeswoman for the North Central Texas Council of Governments. “We’ve obviously funded our highest-priority projects first, but then the stimulus funding came in . . . so we found the next tier of projects. But now, if they’re taking away money from the priority projects we funded, now those next tier of projects jump over them in line.”

The rescission affects federal dollars that haven’t yet been obligated. It comes after Congress failed to extend a federal transportation authorization law, originally passed in 2005, beyond its expiration date Wednesday.

At stake are projects such as the Southwest Parkway, a planned toll road from downtown Fort Worth to Cleburne, and the expansion of Northeast Loop 820 and Texas 121/183 — known as North Tarrant Express. But those projects, along with the makeover of Grapevine highways known as the DFW Connector, are generally thought to be safe from rescissions. Those projects depend on an investment from private developers or toll revenue, or both.

Even so, the $742 million in lost federal revenue has to come from somewhere, and state and local officials will spend the coming weeks figuring out which road jobs can be delayed — at least until Congress patches things up and passes a new, multiyear transportation bill.

Texas has returned $1.9 billion in federal funds during the past four years, a Texas Department of Transportation spokeswoman said.

Luckily, Texas didn’t count on receiving most of the $742 million in a timely fashion, so it doesn’t have to slam the brakes on existing projects, said Michael Morris, transportation director for the council of governments. Instead, it’s more likely that about $100 million in actual road work will be delayed, including perhaps $25 million or more in Dallas-Fort Worth.

“A lot of this money never existed,” Morris said. “It won’t affect the contracts of any jobs already awarded, but it will affect projects we were committed to in the next two years,” he said.

It really is a very strange situation.”

Amanda Wilson,
North Central Texas Council of Governments spokeswoman