AASHTO Journal, 15 May 2015
With just days left for Congress to extend the Highway Trust Fund’s authority to disburse money to states and transit agencies for their infrastructure projects, legislation emerged in both chambers at mid-May to extend the programs through July.
That program authority expires May 31, but the legislative deadline is much sooner. Both houses of Congress were scheduled to begin a Memorial Day recess by the end of the coming week – after May 21 for the House and May 22 for the Senate.
Various congressional leaders had been saying they would introduce a short-term extension and push it through before leaving for the recess. Some expected to back an extension through year end, which would require Congress to find $10 billion to $11 billion in new revenue.
But Sen. James Inhofe, R-Okla., who chairs the Environment and Public Works Committee that is drawing up a six-year authorization bill (see related story), has been steadily pushing to only extend the trust fund into July, when the USDOT has projected that its current funding stream would fall below safe levels.
Such a short-term extension would not require Congress to add more revenue for now, and would give lawmakers two more months to agree on terms to finance a long-term bill.
On May 14, Sens. Barbara Boxer, D-Calif., and Tom Carper, D-Del. – the highest-ranking minority members on both the full EPW Committee and on its transportation subcommittee – introduced a bill to extend the authorization of surface transportation programs into July.
Then, on May 15, two powerful committee chairmen in the House introduced a measure to extend authority for the programs to July 31. Those were Bill Shuster, R-Pa., who chairs the Transportation and Infrastructure Committee, and Chairman Paul Ryan, R-Wis., of the tax-writing Ways and Means Committee.
Here is the text of their bill.
In a joint statement, Shuster and Ryan said: “It was our preference to move an extension through the end of the year, but we will need more time to reach a bipartisan agreement on offsets. This legislation will allow transportation spending to continue through July, while we work towards a next step to close the trust fund’s shortfall.”
They said dealing with that shortfall “will require our colleagues on both sides of the aisle to be constructive in working towards a solution. Only then will we be able to produce a plan that gives states the certainty they need to build the roads, bridges, and other infrastructure our communities and economy need to thrive.”
Meanwhile, the U.S. Department of Transportation warned states and transit agencies in blunt terms that if Congress did not vote to extend the trust fund’s program authority by the May 31 expiration, the Federal Highway Administration would immediately close off its flow of funds even though money is still in its trust fund account.
The Federal Transit Administration said it would keep reimbursing agencies for prior obligations as long as it has funds to draw on, but said it would not have authority for any new contracts.
Transportation Secretary Anthony Foxx, in a May 11 letter to state DOT chiefs, said without a congressional extension past May 31 both immediate FHWA reimbursements to states and contract authority for new projects would suddenly halt.
The FHWA, he said, “will be unable to make new obligations of federal-aid funds for your department’s highway projects.” Foxx added: “Furthermore, unlike last summer’s cash shortfall when states faced the prospect of delayed payments, under a lapse in authorization reimbursements on all projects will be halted completely, not simply delayed.”
He pointed to what happened during a March 2010 lapse of program authority and said that “while revenue will still be deposited in the Highway Trust Fund, FHWA will not have the authority to provide states with any additional contract authority for new projects.
“Furthermore, FHWA will be forced to furlough non-essential employees and will therefore be unable to process obligations or reimbursement requests, or provide technical support to projects. For all intents and purposes, federal support for highway infrastructure programs will stop.”
That same day, Acting FTA Administrator Therese McMillan wrote transit executives, warning them that “while revenue will still be deposited in the Highway Trust Fund, if Congress does not act prior to May 31, no new contract authority will be available for capital projects, essential maintenance or operational support. As a result, it is likely that some agencies would be forced to reduce vital transit services or cut routes.”
McMillan said, though, the FTA “would continue to have the ability to reimburse grantees for costs obligated prior to the authorization lapsing,” subject to availability of funds in the trust fund’s mass transit account.
Some states of course spend more on transit than others, but even in areas without the big urban subway systems many states tap FTA programs for rural and elderly transit systems or bus rapid transit aid to develop more highway-use options than driving individual cars.
The letters quickly got the attention of state officials. Scott Bennett, director of the Arkansas Highway and Transportation Department, said: “Although we have been preparing for reductions or delays in federal-aid reimbursements, we now have to consider the impacts of a complete FHWA shutdown.”
Arkansas has already pulled potential 2015 road projects from several rounds of contractor bids due to uncertainty over when the federal cost share would be available. The AHTD has so far delayed 70 projects it could have worked on this year with a value of $282 million.
But the risk that Congress could allow the program authority to lapse on May 31, Bennett said, “places all of our federal-aid projects – including those currently under construction – at risk. Congress must act now or work in many construction zones across the country will come to a complete stop.”