AASHTO Journal, 22 May 2015
UPDATED: With Congress voting to only extend the Highway Trust Fund’s program authority on road and transit spending to July 31, and not providing any additional funds for now, the trust fund is on course to see at least its highway account balance fall below safe cash management levels this summer without further action.
U.S. Transportation Secretary Anthony Foxx has already warned that if Congress does not replenish the funding stream before balances shrink to the USDOT’s safe minimums, the FHWA would have to curb its normal reimbursements to states for bills paid to contractors for ongoing projects. Current projections suggest that time would arrive in very late July or early August.
Some lawmakers favored this two-month extension as a way to keep pressure on Congress to enact a long-term highway and transit bill this summer.
A number of observers had worried that if lawmakers opted for a longer extension such as one that would carry the trust fund through December, Congress could easily become too caught up in presidential-election year politics to complete a long-term bill that would require lawmakers to come up with perhaps as much as $100 billion in new trust fund revenue.
But a two-month extension leaves state DOTs with more uncertainty about when and how Congress will fund road and transit programs for the rest of the 2015 construction season. Already, a handful of states have listed projects valued at more than $1.3 billion that they’ve pulled back from this year’s bid offerings due to the federal program uncertainty, and some reports put the delayed projects at more than $2 billion.
The House voted 387 to 35 on May 19 for the two-month trust fund patch, and the Senate followed with a weekend voice vote approval before recessing for a Memorial Day break.
“We are disappointed and frustrated,” said Bud Wright, executive director of the American Association of State Highway and Transportation Officials. “This two-month extension is a reflection of the inability of Congress to fund a long-term surface transportation bill, which has caused uncertainty among our members … Congress must find the political will to pass a long-term bill and put these short-term patches aside.”
Wright said that with state DOTs postponing construction projects because they can’t count on federal funds to be there when the bills come in, the federal program uncertainty is interrupting “millions of dollars that should be flowing into communities, creating jobs and paying for projects to improve safety and mobility.”
Already, the chairman and ranking member of the Senate Environment and Public Works Committee – James Inhofe, R-Okla., and Barbara Boxer, D-Calif., have said they will mark up a proposed six-year highway bill in June. Two other Senate committees still have to provide the transit and highway safety portions of an authorizing bill, and the Finance Committee would need to provide revenue to pay for it.
And committees on the House side would need to produce their own legislation before Congress could vote on a final bill. That would require a lot of congressional action in a short period of legislative days during June and July in order to avoid another extension this summer.
Meanwhile, Rep. Peter DeFazio, D-Ore., ranking minority member on the House Transportation and Infrastructure Committee, formally introduced the Obama administration’s six-year “Grow America Act” along with 19 other committee Democrats.
That bill calls for spending $478 billion over six years on highway, transit and passenger rail programs, with a sharp expansion of USDOT grant programs and targeted spending on highway freight corridors. That includes moderate growth in highway spending with significantly larger increases for transit and intercity passenger rail. It would pay for that spending through a mandatory one-time repatriation tax on foreign earnings of U.S. corporations.
The backers said they were introducing it partly to spur negotiations with majority Republicans on how much investment Congress should make in the surface transportation systems.
The White House, in a statement of administration policy, said although it does not oppose the two-month patch, the continued uncertainty over federal programs “has undermined the ability of states and localities to keep Americans at work building and repairing the nation’s roads, bridges and transit systems.”
Repeating President Obama’s call for multi-year legislation that makes “significant and long-term investments” in transportation infrastructure, the White House also said: “It is time for the Congress to end the era of short-term patches and chronic underinvestment. The administration will not support continued failure in making the investments the nation needs.”