Washington projects could be affected as federal fund for roads runs dry

WASHINGTON — The federal highway trust fund will run out of money this month, requiring delays in payments to states for transportation construction projects, Transportation Secretary Mary Peters said Friday.

The trust fund — used to help pay for highway and bridge projects — will run about $200 million short of its commitments for the fiscal year, which ends Sept. 30, Peters said.

The shortfall will mean short delays — and in some cases a temporary reduction — in payments to states for infrastructure projects the federal government has agreed to help finance.

Although the fund started with a $8.1 billion balance in October 2007, transportation officials said revenue for the past year was $8.3 billion below what the government had committed to spend.

Peters blamed the shortage on the high price of gasoline, which has prompted Americans to drive less. This means less fuel has been purchased and less gasoline taxes collected for the trust fund.

Americans drove 50 billion fewer miles between November and June 2008 than during the same period a year earlier.

With the highway fund running out of money, the Bush administration pulled a political U-turn and urged Congress on Friday to approve an $8 billion rescue plan that the White House had previously opposed.

The House this summer overwhelmingly voted to transfer money from the government's general fund to bail out the highway account. Bush administration officials at the time threatened to veto that measure as a "dangerous precedent."

In a turnabout, Peters urged lawmakers Friday to complete work on the legislation to transfer the money.

John Horsley, executive director of the American Association of State Highway and Transportation Officials, said the funding delays proposed by Peters will "have grave repercussions for the states, for hundreds of thousands of workers in the construction industry, and the driving public."

Washington state can hold out for a few months without suspending any highway projects, according to state Department of Transportation Secretary Paula Hammond.

Rather than lay off contractors, the state would consider delaying the start of construction, she said. Another option might be selling bonds to pay for work until federal money arrives, she said. Washington spends $33 million to $54 million a month in federal funds toward state highways.

Hammond was optimistic the feds will solve the problem sooner. "If I were a betting person, I would say within two months they'll have it fixed," Hammond said

But Sen. Patty Murray, D-Wash., chairwoman of the Senate Appropriations transportation subcommittee, predicted that "if we don't pass a solution fast, we'll be forced to cancel critical highway construction and repair projects that ensure our roads and bridges are safe and secure."

The funding shortfall will not have an immediate impact on the trust fund's Mass Transit Account, which helps pay for rail, bus and other public transportation projects.

Seattle Times reporter Mike Lindblom contributed to this report.