Fund to fix roads about to run dry

Drop in gas tax revenue to blame

WASHINGTON - An important account in the federal Highway Trust Fund will run out of money this month, a situation that could hamper completion of road and bridge construction projects across the country, Transportation Secretary Mary E. Peters said yesterday.

Because the trust fund's highway account is draining away, the Transportation Department will have to delay payments for projects, Peters said at a news conference. Since money from Washington typically pays 80 to 90 percent of the cost of federally aided road work, states with shaky finances may have to consider curtailing projects.

Peters said her department would begin to dole out money from the fund each week on a prorated basis. For instance, if there is enough money to cover only 80 percent of the payment requests the department receives for federally financed local projects, the agency will pay only 80 percent of each request initially, making up the difference later.

"Time and again, the president has warned Congress of the pending shortfall and submitted fiscally prudent budgets to close the gap," Peters said, in remarks that reflected the political nature of the long-running debate over how to pay for road building.

The trust fund gets its money from federal excise taxes on motor fuel: 18.4 cents a gallon on gasoline and 24.4 cents a gallon on diesel. But the trust fund's highway account is being rapidly depleted because for months Americans have been reacting to the high price of gasoline by driving less, Peters said. In May, for instance, vehicle-miles were down 3.7 percent from a year earlier.

Not many months ago, federal officials expected the highway account to have about $4 billion by Sept. 30, the end of the fiscal year. Oct. 1, the trust fund had $8.1 billion in the bank, transportation officials said, but by Sept. 30, the states will have asked for $8.3 billion more than the fund took in, creating a $200 million gap.

The Transportation Department expects to have enough money to make all payments to the states for the second week of September but enough for only about 64 percent of the payments the third week, said Brian Turmail, an agency spokesman. As states wind down the summer construction season, they can anticipate longer delays in getting payments, he said.