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States Forced to Delay Millions of Dollars in Highway Contracts

September 09, 2008

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States have put the brakes on millions of dollars of highway construction projects and are scrambling to substitute scarce state funds for the federal funds that have been cut off due to the crisis in the Highway Trust Fund,
according to the American Association of State Highway Transportation Officials.

"States are suspending new contract awards, halting right-of-way acquisition and looking for ways to stop ongoing construction while maintaining public safety," said John Horsley, AASHTO executive director. "It is truly a crisis that Congress must resolve immediately because the federal IOUs are piling up and the states' financial hole gets deeper every day."

U.S. Secretary of Transportation Mary Peters announced on Friday that the federal government would slow down reimbursements to the states, and would likely be able to make only partial payments beginning next week, due to insufficient funds in the Highway Trust Fund. She has urged Congress to enact by the end of the week, an $8 billion transfer from the General Fund to preserve the solvency of the Highway Trust Fund. Action is pending in the Senate.

More than a dozen states including Alabama, California, Colorado, Kansas, Michigan, Missouri, New Hampshire, Oklahoma, Pennsylvania, Texas and Washington have detailed the impacts of the federal shortfall on state programs, either in news releases or via media reports. Information about those impacts is available on the AASHTO web site: www.transportation.org.

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