Tennessee Department of Transportation chief warns of looming funding crisis

Tennessee Department of Transportation chief warns of looming funding crisis

July 10th, 2014 by Paul Leach in Local Regional News

Tennessee Transportation Commissioner John Schroer addresses Cleveland and Bradley County leaders and and planning officials regarding an "impending funding crisis" related to the potential insolvency of the Federal Highway Trust Fund.

Photo by Paul Leach /Times Free Press.

CLEVELAND, Tenn. - Tennessee Department of Transportation Commissioner John Schroer spoke about the "impending funding crisis" in transportation in Bradley County on Wednesday.

As of Aug. 1, the Federal Highway Trust Fund will be insolvent unless Congress takes measures to replenish it, he said, The loss of federal funding could cut TDOT's $1.8 billion budget in half.

"It's kind of scary," Schroer told city and county leaders and planning officials.

If insolvency occurs, it will mean that TDOT will get only 70 percent -- instead of 100 percent -- reimbursement for bills submitted in association with federally aided projects, Schroer said. Such shortfalls will be driven down to the local level, he said.

"For some places and some states, that means projects are going to stop," Schroer said. "For some communities, that may mean they can't pay their bill. That's what happens when the Federal Highway Trust Fund goes insolvent."

Federal distributions to state transportation agencies could stop on Oct. 1 and take a year or longer to resume if the trust fund is not replenished, he said.

"That is a true and real possibility, and contingencies need to be made for that," Schroer said.

His message was a personal follow-up to a June 12 letter issued to local agencies in which he urged them to "prepare accordingly."

However, in the letter he also said he did not believe the situation was critical enough to warrant termination of vendor contracts "at this time."

The state has delayed the letting of 13 projects totaling more than $100 million in anticipation of the federal funding shortfall, according to Times Free Press archives.

In Southeast Tennessee, that decision has delayed the construction of a $21.7 million interchange on State Route 311 in Bradley County and an $11.9 million project to widen East Brainerd Road (State Route 320) in Hamilton County between Graysville and Bel Air roads.

Officials also discussed a bill presented by U.S. Sen. Bob Corker, R-Tenn., that would increase the federal fuel tax by 12 cents a gallon over the next two years and thereafter index it with inflation.

Such a move would "put us back where we are at" with federal funding and highlights the senator's view toward longevity and not spending money we don't have, Schroer said.

Citing a recent conversation, Cleveland Mayor Tom Rowland said Corker seemed neither optimistic nor pessimistic about his proposed fuel tax increase.

"We couldn't get a real feel for how he thought it might go," Rowland said.

Short-term relief may be on the table in the meantime, but those funding measures would run out either in December or March, Schroer said.

Paul Leach is based in Cleveland. Email him at paul.leach.press@gmail.com.