The Iowa Department of Transportation will not significantly alter its upcoming five-year construction plan despite threats the agency could lose more than a third of its budget due to a severe federal aid cut.
Such a cut, which officials say is far from certain, could mean delays to projects getting underway in fiscal 2015, which begins on July 1, such as the Highway 100 extension between U.S. 30 to Covington Road. But, as officials embark on the 2015-19 planning process, they will proceed as though that money will come through.
“While we need to prepare for this situation, we are not predicting this is going to happen,” said Stuart Anderson, of the planning, programming and modal division of Iowa DOT. ”This cliff has been out there for some time and Congress has always taken action.”
The Iowa Transportation Commission approves a new five-year plan annually in June, and projects in the plan are put out for bid with the start of the next state of Iowa fiscal year in July. Anderson kicked off discussion of the next five-year plan, which covers 2015-19, with a presentation at Tuesday’s monthly commission meeting in Ames.
The question for commissioners was how to incorporate the potential shortfall into planning.
About $309 million of Iowa DOT’s $810 million construction budget in 2014 came from federal aid from the Highway Trust Fund, which is primarily funded by federal fuel taxes, according to Iowa DOT reports. The gap between disbursements and revenue in the Highway Trust Fund has been growing since 2007, and the U.S. Department of Transportation Highway Trust Fund Ticker, which was updated in Jan. 15, projects the fund will have zero balance sometime in August.
The fund needs an influx of about $10.75 billion to continue at the 2014 funding level, according to Anderson’s presentation.
Unless additional federal funding is approved, the Highway Trust Fund is projected to decrease disbursements from $40 billion in the federal fiscal year for 2014 (October 1 to September 30) to about $200 million in fiscal 2015, which begins October 1. For Iowa in 2014, that would have meant a loss of about $473.7 million, of which about $309 million went to the Iowa DOT and the rest to local cities and counties.
The Iowa DOT recommended keeping that $309 million federal aid figure as part of its planning forecast each year through 2019.
“If that cliff happens whatever our forecast is is irrelevant,” Anderson told the commissioners.
He said the DOT must have a slate of projects ready to go in case federal funding comes through. If it doesn’t, there’s a criteria in place for which projects will continue and which will be delayed.
Commissioners, including Don Wiley of Mount Pleasant, supported the approach.
“If we hit the cliff, we are going to have to deal with it,” he said.