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Highway Trust Fund Will Be Insolvent by August According to DOT

Posted By Admin User, Thursday, April 24, 2014

The Highway Trust Fund (HTF) will reach bankruptcy by the end of August unless congressional action is taken, according to an announcement this week by the Department of Transportation (DOT). The department had previously projected that the HTF would run out of money in September without congressional action. By law, the HTF cannot run a negative balance or use additional borrowed funds. DOT has warned that the transportation funding shortfall could force state and local governments to cancel infrastructure projects scheduled to begin this summer because federal money will not be able to assist with construction costs.

However, a recent story by Governing, a magazine focused on public policy issues affecting states and municipalities, reports that Arkansas and Tennessee have already reduced the number of transportation projects scheduled for this summer because of the uncertainty surrounding federal funding.

States are reimbursed by the federal government for money they have already spent on projects, so they are likely to hurry up and turn in their paperwork as soon as they can to make sure they get their money before the HTF exhausts its funds. That problem is compounded if states ask for their reimbursements early, and the HTF would run out of money even sooner.

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