Turbulent economic times may jeopardize the fate of the Highway 101 construction project at Milpas and Hot Springs Road, a $53 million plan that broke ground over the summer and is expected to take four years to complete.

A lack of funding may halt progress on the widening project – the largest highway improvement plan in Santa Barbara history. The construction and landscaping project is being funded by Proposition 1B and $13 million dollars accrued by Measure D, a half-cent sales tax used to finance transportation projects. The state loans necessary to pay for the development were stalled last month, however, when a state panel froze $3.8 billion in loans for infrastructure projects to pay for vital public services.

In response to the uncertainty of continued state funding for the project, the Santa Barbara County Association of Governments board members met Thursday to consider loaning the state of California up to $2 million from Measure D to keep the highway project on course.

SBCAG board members agreed to permit negotiations between the California Dept. of Transportation and SBCAG regarding the specific terms of the possible Measure D loan, which will be further discussed at the February meeting. This loan would only take place under the circumstances that state funds become unavailable.

According to the construction update on SBCAG Web site, all construction will continue as scheduled for now.

The plans involve a third lane on the northbound 101 from Cabrillo to Milpas, a third lane along the southbound 101 from Milpas to Hot Springs and the construction of a roundabout at Hot Springs Road in Montecito. Most construction work is done during daytime work hours.

Measure D was first approved by voters in 1989 and was reaffirmed this November. Proposition 1B, which was passed in 2006, provided the state the ability to sell $19.9 billion in bonds to help finance infrastructure projects. It passed with 61.2 percent of the vote.