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Federal funds dependency comes home to roost in Idaho

Federal funds dependency comes home to roost in Idaho

Wayne Hoffman
July 3, 2014

This is what dependence on the federal government looks like: The Idaho Transportation Department is canceling plans to advertise for future construction projects. There's a high probability the money needed for highway building won't be available, or so says the federal government, which supplies about half of the money Idaho uses for highway and bridge construction and repair.

U.S. Transportation Secretary Anthony Foxx told states in a July 1 letter that the federal transportation account that finances construction projects is nearly depleted, and from now on, the federal government will ration its allocations of money to states.

Foxx is angling to pressure Congress to take action to fill the fund. The money in the fund is supplied with federal fuel taxes, 18.4 cents for gasoline and 24.4 cents for diesel. Inflation, fuel efficiency and reduced driving are impacting the available money. Some Democrats and Republicans are broadening calls to raise taxes to make the account solvent again. The Obama administration is pushing for corporate tax code changes to fund the account.

Frankly, I'd like to see the government (federal and state) prioritize for a change. The federal government, in particular, opted to expand government health care at a time everyone knew the transportation account was going broke. It was sort of like going out and buying a new car after you've lost your job and depleted your savings. But I digress.

States that had big construction jobs planned are now scrambling to halt projects. Idaho transportation spokesman Reed Hollingshead didn't call our state's response a "cancelation" of pending Idaho projects, but it sure sounds like it.

Here's what he told me: "ITD will temporarily suspend further advertising of (future) construction projects pending resolution of the funding shortfall. ITD is aware of the situation and remains hopeful that this impasse can be avoided."

Meanwhile, I'm not sure what it is going to take for Idaho to get serious about our dependency on federal coffers to fund Idaho programs. This is only the latest in a long string of threats and actions from the federal government. I've interviewed federal transportation secretaries going back to the Clinton administration's Rodney Slater, and they have all warned states like Idaho, highly dependent on federal money, to not count on the gravy train to continue to roll.

Other iterations have included fiscal cliff discussions, budget sequester and government shutdowns. The federal government supplies about a third of the money Idaho uses to run the government, and this says nothing of the money being supplied to local governments—mayors, county commissioners and local taxing districts who, as my old friend Ralph Smeed would say, "are totally helpless without a federal grant."

That's Idaho state government, too. This summer and fall, people who were counting on construction jobs will not have them. Companies that were going to hire highway engineers and flaggers and heavy equipment drivers won't. Idaho's labor force, which still employs fewer people now than it did in 2007, will suffer accordingly.

This is the crisis anyone could have seen coming miles away and years ago. The question is whether states, including Idaho, are finally ready to get serious about the problem of federal dependency.

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