Secretary Foxx sent letters to state DOT CEOs/Directors yesterday1 informing them of FHWA’s cash management procedures to be implemented in response to the potential Highway Trust Fund shortfall. U.S. Department of Transportation’s Highway Trust Fund Ticker webpage summarizes the plan moving forward:
With the Highway Account expected to become insolvent by the end of August, the Department of Transportation will implement a cash management plan beginning August 1 to manage the flow of federal dollars. Under this plan, reimbursements to states for infrastructure work will be limited to the available cash in the Trust Fund. We will distribute incoming funds in proportion to each state’s federal formula apportionment in the fiscal year.
The plan ultimately affects local agencies too because the shortfall impacts all programs of the Highway Account, including the federal-aid program. Possible delayed reimbursement from FHWA to Caltrans means possible delayed reimbursement from Caltrans to local agencies.
There’s still time for Congress to identify a long-term solution, but until then, this is the plan for addressing the dwindling funds.