NASHVILLE - The Tennessee Transportation Department commissioner said Monday that the state won't be able to start any new highway projects if it loses federal funding next year.
Gov. Bill Haslam wrapped up his annual budget hearings with the department at the state Capitol.
Commissioner John Schroer told Haslam that money from a measure President Barack Obama signed in 2012 to extend federal highway and transit funding will end on Oct. 1, 2014. If Congress doesn't extend it, then that would mean a loss of over a billion dollars for Tennessee.
"We don't know we're going to lose it," Schroer said. "They could come and pass a new authorization ... and funding could be in place. But there's a possibility that won't happen, and so I thought the governor needed to be aware of that."
Schroer said the state would likely be able to maintain current construction projects, but not take on new ones.
When asked by a reporter after the hearing if the state should consider ways to increase revenue in case of the loss, the commissioner said such discussion is premature, despite sluggish revenue reports for the state.
"I think it's very important that we know what the big picture is before we decide what we do internally," he said. "So, until we get that picture, it would really be premature to start talking about what needs to be done in Tennessee."
The state's annual transportation budget is about $1.8 billion. The state makes up about 44 percent of that funding, largely from fuel taxes.
The governor has asked all departments to present potential spending cuts because of the state's sluggish economic performance.
"There are a lot of real difficult decisions, but we knew that going in," Haslam said after the hearing. "I would feel a whole lot better if revenue will bounce back in the next month or two."