Virginia faces drastic reductions in highway and road projects if Congress does not immediately release about $1.4 billion for highway projects throughout the country, state highway department officials warned this week.
In Virginia, the loss in federal funds would total at least $75 million, and could halt work on 156 federally funded projects already underway in the state.
Locally, the loss of fnds could affect all construction projects in Fairfax County, including the controversial I-66; in Alexandria interstate and urban road projects totaling more than $5.5 million could come to a standstill, and in Arlington, more than $12 million worth of projects face a delay, according to Scott Hollis, assistant programming and scheduling engineer for the Virginia Department of Highways and Transportation.
The only area that would be unaffected, officials say, is highway maintenance. State law requires that all available funds first be applied to the upkeeping of existing roads.
Virginia officials were first notified of the possible funds loss on April 2, when Federal Highway Administration (FHWA) officials told the state that the federal department was reaching its congressional-imposed spending limit for the 1980 fiscal year (which ends Sept. 30), and most likely, would have funds only through June, state highway department spokesman Joe Presbey said.
Federal funds represent about 65 percent of Virginia's total highway construction budget, state officials said.
Under current funding formulas, states do not receive the entire federal payment at the first of each fiscal year, but instead receive monthly payments. pIn Virginia, Presbey said, federal payments are currently about $25 million a month.
Despite the possible delays state highway projects could face, FHWA Deputy Administrator John Hassell announced last week, after meeting with Virginia highway officials, that he was confident Congress would release the funds needed for July, August and September.
Already hampered by a serious cash-flow problem caused by an unanticipated $45 million drop in state gas tax revenues, state highway officials say they are not sure they can met their current financial obligations if Congress does not release the funds.
Congress is expected to make a decision by May 15.
However, several state highway officials say plans are already being considered to force release of at least some funds.
One possibility, said Oscar Maraby, director of planning for the state highway department, would be to appeal directly to the FHWA for money from an FHWA emergency fund. If Congress delays release of Virginia's $75 million, Maraby said, the state should be eligible to receive about $16 million from the FHWA emergency fund.
But Virginia officials note that even if the funding problems for current projects are solved, future road projects, many of which are already in the planning stages, could be in jeopardy.
Along with its announcement about current projects, the FHWA advised the state that in an effort to comply with President Carter's call to balance the federal budget, a clamp was being placed temporarily on all available funds for future projects.
That money, known as obligation funds, explained FHWA financial engineer Ken Kippey, represents the states' ability to award future contracts. Kippey compared the funds to an escrow account -- it assures contractors money will exist for payment when road projects actually begin.
Congress originially had directed the FHWA to allow states to contract for new projects totaling $8.75 billion. Under the president's balanced budget requirements, Kippey said, that total was reduced to $7.7 billion.
With the new limit, Virginia now has available $158.9 million for future contracts, instead of the $283 million it would have had available.
However, by Arpil 2 when FHWA officials notified states of the reduction, Virginia already had committed $100 million of the total, thus leaving the state with only $58.9 million to award for new contracts through Sept. 30.
In Fairfax County, $3.1 million in future projects face deferment, including two landscapes projects on I-66, a third lane on Rte. 123, intersection improvements between routes 645 and 29 and between Pohick Road and Burke Lane Road, and a bridge over I-495.
In Arlington County contracts for four future projects -- all involving I-66 -- may not be awarded this year.
Alexandria will not be affected by the hold-up in funds because no new projects have been planned between now and October 1.
However, state and federal officials say that some projects could go ahead this year, if they do not require large initial outlays. This could be accomplished, state highway Commissioner Harold King explained, by spreading out the costs of a large project. For instance, the cost of $10 millon project conceivably could span a four-year period.
FHWA Deputy Administrator John Hassell emphasized that if the state could cover costs on newly awarded contracts through the summer, the FHWA should be able to reimburse the state when the temporarily blocked funds are released at the beginning of the new fiscal year in October.
Hassell's assurances did little to ease the concerns of financial planners fighting rapidly increasing material and production costs -- inflation is running around 20 percent in the construction industry, asphalt jumped from $109 a ton to $145 in January -- or officials who believe Virginia is being asked to absorb an unfair proportion of the cuts in future project funds. b
Although Virginia receives only 3 percent of all federal highway funds, its reduction represents 12.5 percent in the total cutback for future projects. i
"For years," Arlington Del. Warren G. Stambaugh claimed, "the highway department has been insensitive to the needs of the people. This time, their pat arrogance has come back to haunt them."
Stambaugh and other legislators claim if the highway department had obligated its funds earlier in the year, the department would not be facing current problems because the FHWA based its reductions on uncommitted funds, not on the orginial allotment.
This is true, Kippey explained, but, he countered, at least 30 other states are experiencing similar problems.
Even if Congress releases funds for the rest of the fiscal year, state highway officials say Virginians eventually will have to adjust to some changes.
"It's a well-recognized fact," Maraby said, "that with inflation and decreased revenues looming darkly overhead, we are just going to have to begin to make do with the highway system we have."