California's budget crisis is threatening to stall state funding for the East Sonora Bypass Project.

In the absence of a state budget, there might not be enough cash in the state's highway account after Sunday to cover costs for transportation projects statewide, Caltrans Director Jeff Morales said in a letter last week.

"At that point, we will be faced with the need to curtail, at least temporarily, construction and maintenance work throughout the state," he wrote.

The state faces a $38 billion budget shortfall, and although July 1 was the deadline for approving a budget plan, the Legislature has not done so. This isn't the first time California lawmakers have missed budget deadline. The delay has lasted into September in some years.

The fiscal crisis has cast uncertainty on the $70 million bypass project, which began in late 2001 and is designed to reduce congestion on Highway 108.

The project's prime contractor, Goodfellow Bros. Inc., has committed to continue the work even if payments from the state are held up.

However, R.M. Harris Co., the secondary contractor, isn't so certain.

"No one has told us in writing that we are not going to be paid," company President Dave Harris said this morning. "We will make that decision if that time comes."

R.M. Harris is under contract to build the project's bridges and overpasses.

Its partner on the project, Goodfellow Bros., which is handling the earthwork, would pay employees out of its own pocket until a state budget is passed, said Project Administrator Deanne Degn. Once a state budget is approved, Caltrans would reimburse the contractor, Degn said.

"We are willing to keep going for the time being," she said.

A Caltrans spokesman said R.M. Harris officials have not indicated that work would stop.

"As of this point, the project manager has not received anything that (R.M. Harris) would not go forward with the work they are doing right now," said spokesman Robert Spradling.