WASHINGTON -- Transportation Secretary Mary Peters says a major federal highway fund will run out at the end of the month and that could be bad news for the future of Carolina highways.

Peters blames the shortage of funds on the hig price of gas and Americans driving less. It's an alarming downside of the American "staycation." Americans drove 40 billion fewer miles from November to May. That's good news for the environment and the cost of fuel, but it's bad news for Ohio roadways.

Ernie Seneca, spokeperson for the North Carolina Dept. of Transportation, says much of North Carolina's transportation funding comes from the Federal Highway Trust Fund. That fund relies on revenue from federal highway taxes.

The Federal Highway Administration estimates it will amount to a 34 percent cut in federal highway programs in fiscal year 2009. The resulting effect would be an estimated loss of $290 million in federal funds for North Carolina in fiscal year 2009. The cuts could also cost about 10,000 North Carolina jobs. For South Carolina, it would mean $180 million in cuts and 6,000 jobs.

"It would severely impact our ability to do business here in North Carolina," said North Carolina's Transportation Sec. Lyndo Tippett.

The costs to build are adding to the state's obstacles. According to Aashto, the American Association of State Highway and Transportation Officials, in the past five years, the cost of concrete shot up 36 percent; asphalt is up 70 percent; steel is up 105 percent, and diesel to fuel the equipment is up 300 percent.

"It means that many projects in the pipeline are going to be stopped," said Tony Kane, the director of Engineering for Aashto. "It means that states are going to be telling construction contractors 'Forget it, there's no jobs this year.'"

Seneca said the NC DOT hasn't made any decisions on what will be cut. Federal dollars are needed to finish the I-85 widening project, Charlotte's Outer Loop, and the Monroe Connector. However right now the North Carolina DOT is waiting for the final word on the federal trust fund's shortfall. Sec. Peters is pushing a measure working it's way through Congress that could put an additional $8 billion dollars to shore up the fund. It has passed the House and the Senate may pick it up when Congress resumes next week.

Sec. Tippett said the fix is a must. "It is a serious thing related to the infrastructure throughout the United States," said Tippett. "I think the failure of the Minnesota bridge is an example of how our infrastructure can deteriorate and we have issues not only with bridges but with pavement throughout the state. We have to maintain these facilities to make sure people can get to and from work safely."

Kane said even if it does pass, the federal government needs to figure out more permanent solution for highway funding in the future. "It's a real bandaid. It's a short term fix. It's going to get us through this fiscal year but next fiscal year its going to be the same thing."