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Highway construction stalled by budget impasse

POSTED August 20, 2010 9:50 p.m.

The impasse that has stalled state budget negotiations could likely cast a red light on $3 billion worth of highway construction projects, including two in the Central Valley.

Caltrans officials have warned that if California lawmakers can’t reach a deal on a new budget by the end of September that the construction work on dozens of highway projects across the state will come to a screeching halt. Caltrans Director Cindy McKim said the budget delay could prevent the Department of Transportation from initiating construction projects, awarding contracts for jobs, and making payments to vendors. The stalemate is also affecting the 50,000 new jobs that Caltrans says the projects would add to the state’s labor force.

“Delayed and suspended construction projects and non-payment to vendors prevents the economic stimulation and job creation that result from the department’s normal activities,” McKim stated in a released memorandum.

The funding of transportation projects worth $2.1 billion that are contingent on the approval of the state budget may be delayed or deferred, McKim said. Additionally, the department would not be able to award more than $900 million in new contracts to construction firms and would have to temporarily suspend payments on $9.5 billion worth of current construction because of a lack of available cash.

Two of the projects facing a postponement of undetermined length are along Highway 99, to the north and south of Turlock.

There is a $20 million bridge replacement happening in Merced that is about 13 percent complete, according to Caltrans. In Ceres, there is a $17 million interchange reconstruction project that is 82 percent complete.

The impact on both projects from a delayed budget includes increased traffic delays, as the narrower lanes remain in place and significant increases in the overall costs of the projects.

McKim pointed to the 2008/09 fiscal year budget impasses that resulted in the state paying more than $215,000 in penalties from delayed payments.

To contact Sabra Stafford, e-mail or call 634-9141 ext. 2002.

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