Paul Trombino III, director of the Iowa Department of Transportation, elaborates on the potential economic consequences if Iowa were to halt its transportation projects due to uncertainty in federal funding.
Transcript:
From an uncertainty perspective, one of the biggest challenges that we have as we think about our five-year program is: at what level do we put federal dollars in? That’s always the biggest question for our transportation commission. And we have made a conscious choice to essentially leave it the same.
So wherever we figure that number is, and for us at the state level it is about $309 million, and we plug that in for five years and we’re not expecting any change from that.
All businesses – everyone functions with uncertainty. We in the transportation industry can’t say that everything has to be spelled out for 6-12 years because that’s the only way we can plan because I think we’re always constantly making plans in those windows.
And the big thing for us – a couple things to remember. One, you have to spend your own money to get federal dollars. So you have to spend state dollars – this is always a shock to a lot of communities because they think you just hand them $500,000 – no, you have to spend your own money to get reimbursed with federal dollars. So there’s cost to that.
And for a lot of states, and they’ve all made different choices. I feel very strongly that we need to continue to move forward and expect the dollars to come. And the reason is – the most important piece, and this is something for which we advocated during our gas tax discussion, is turning the money. You have to get the money into the infrastructure as quick as you can because there’s a cost to it.
And if we make a conscious choice to move money off, which we could because there’s some instability, we would lose significant construction windows. It’s not 70 degrees every day in Iowa, as you may know. We have winter. We can’t necessarily do all construction activities – so if we started to move projects off, economically, it could have a tremendous impact on our state.
Some of those improvements are critically required not only for people to move around the state, but also for business movement. So from my perspective, I thought it was just very important that we continue the program. So, we’ll continue to have risks. Funds could run out. And I’ll be honest with you, I’ve done the calculation and we know that our cash flow could go negative probably come shortly here this summer and that will have severe consequence.
And my belief is, if that happens, there is going to be severe backlash because of Congress and them not dealing with the issue, it causes us to go negative in our cash flow and has a dramatic effect for us to try to finance dollars or do some other things so we can just continue to pay our contractors. I really believe there would be significant consequences for Congress overall.
But, what I come back to, as a steward of the transportation system, having a responsibility to manage what we think is making the right investments, it’s very important for us to continue that process. That’s the biggest difference. For all of us sitting up here, we actually have to deliver work. It has to happen every day or there are significant consequences for us specifically.
So, we can’t not make decisions or say we’ll do it next year. We actually have to do projects, handle winter operations, do maintenance… It has to happen every single day.
