Officials of the American Association of State Highway and Transportation Officials, which represents the state transportation departments in Washington, today called for action to address a looming $4 billion shortfall in the federal Highway Trust Fund in Fiscal Year 2009.

The shortfall was projected in January to be $700 million. New estimates from the Office of Management and Budget were released today, indicating a shortfall in fiscal year 2009 for the Highway Account of the Trust Fund totaling $3.8 billion. That figure could rise to as much as $4.3 billion if Congress rejects the Bush Administration's proposal to cancel a slated revenue-aligned budget authority distribution of $630 million.

AASHTO Executive Director John Horsley said unless action is taken the development could trigger substantial cuts in the federal-aid highway program financed in each state through the Highway Trust Fund.

"The impact of these shortfalls will be dramatic," Horsley said. "If this massive deficit were to be offset by obligation limitation reductions, it would require reducing the distribution of federal funding to the states by as much as $16.5 billion in Fiscal Year 2009. It takes four dollars in obligation reductions to save one dollar in spending."

Horsley said that would mean a cut in the federal-aid highway program from a planned obligation level of $43.2 billion to $26.7 billion.

"Clearly, states cannot meet transportation demands in the face of such dramatic cuts," Horsley said. "We must work with the Congress to identify ways to fill these funding gaps."