About This Shutdown

Jan. 16, 2019

I do not want to talk about how it came about or why, or who is ultimately responsible for the partial government shutdown. What I would like to mention is a headline for a recent article in The Washington Post titled, “Highway and Transit Projects Grind to a Halt as the Shutdown Continues.” According to the article, numerous construction projects could be in trouble because officials at the state level are not too sure about approving them. They’re worried about being able to secure federal funding for their 2019 projects.

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The Post says:

“If this continues to drag on it will have real impacts, not only on a state’s ability to build new projects but also on their ability to operate the system that they currently have,” said Jim Tymon, executive director of the American Association of State Highway and Transportation Officials. “Eventually it’s going to have an impact on operations and maintenance.”

The percentage of federal funding that states rely on varies from one jurisdiction to the next, with states such as Montana and New Mexico getting more than 85 percent of their funding from Washington, while states such as New Jersey and Texas get a third or less of their outlay from the federal government.

The article goes on to explain:

That means that only a quarter of the $44 billion for highway projects and $11 billion in federal transit programs was paid at the outset of the fiscal year.

“With the construction season coming up on us, states are usually bidding projects over the winter so they’re ready to put shovels into the ground as we get into the end of winter or early spring,” Tymon said.

Working under a continuing resolution also stagnates federal funding at 2018 levels, creating an additional shortfall, because Congress had added money for roads and transit for 2019. That, added to the uncertainty of a government shutdown, means state and local governments will prioritize maintenance and operations while waiting for Washington to reopen the spigot.

It’s getting to be a difficult situation in Oklahoma:

Oklahoma this week postponed accepting bids on about $137 million in federally funded projects to see how the shutdown plays out.

“January and February are actually big months for us because we try to have projects let to contractors in time for them to take advantage of spring and summer,” said Terri Angier, spokeswoman for the Oklahoma Department of Transportation.

Angier said that bidding on $102 million in federally funded projects was canceled in January and that an additional $36 million scheduled for bid in February also was in jeopardy.

“If things happen very quickly with everyone to come to agreement, February might be on track, but [resolution of the shutdown] has to happen with the next few days,” Angier said. “After they do that, it takes a few weeks for us to have access to those funds, and then we have to advertise [the bidding] to contractors.”

Oklahoma gets 57 percent of its road and transit funding from federal agencies, according to the American Road and Transportation Builders Association.

The government shutdown is already breaking records in terms of how long it’s gone on.

Is the shutdown affecting your business? Please let me know in the comment section below.