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All Eyes on Road Fund Extension

Thursday, August 6, 2015

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Florida transportation officials are trying to identify which projects they need and which they can live without. In Indiana, the state’s Department of Transportation is looking at out how to close a $1 billion annual road-funding gap.

And while both Virginia and North Dakota transportation officials have said they don’t plan to cut any road projects this year, they, too, are waiting for federal legislators to agree on a longer-term solution for highway funding needs.

All 50 states have their eyes on what Congress will do when they come back in session next month. Congress was forced to pass a temporary extension on July 30 to ensure the Highway Trust Fund would continue to provide necessary money for projects across the country. Without it, the authority to use the fund would have expired on July 31.

34th Short-Term Fix

President Obama signed the measure into law on that date. The $8 billion extension is the 34th of its kind in the past six years. It gives the Federal Highway Administration (FHWA) authorization to issue state reimbursements and fund its own projects until Oct. 29, unless the fund falls below the $4 billion threshold that triggers federal “cash management procedures.”

Meanwhile, representatives and transportation officials have said the only real solution is for the federal government to come up with a viable long-term plan.

©iStock.com / DanCardiff

Congress passed its 34th temporay fix July 30 to replenish the federal Highway Trust Fund, which the Federal Highway Administration uses to reimburse states and supply money for its own projects.

“This is the challenge that this Congress and the one before it have had, the recognition that we’re entering some shallow water,” said Doug Hecox, a FHWA spokesman, in a recent CNBC interview.

“It’s simply not capable of sustaining the states the way it used to long term, without some fundamental change in how it's supported."

Hecox also told CNBC that state transportation officials should not be worried about whether or not they will be reimbursed.

“The states will be reimbursed, it’s just a question of how soon,” he said. “The projects wouldn’t stop.”

Mixed Reactions

But not all state officials are as confident about their long-term goals with only a short-term solution in place. In Florida, Bay News 9 reported on Monday (Aug. 3) that its state transportation leaders were working to identify road projects that could be stalled or cancelled completely, if necessary.

“There potentially could be a six-month window where we would need to take a look at whether or not we would need to slow down some projects,” Matt Ubben, president of the group Floridians for Better Transportation, told the station.

Ubben said some of the projects that could be affected are the Interstate 4 makeover in central Florida and the widening of interstates 75 and 275 near Tampa Bay.

Officials in Virginia were more optimistic.

“We certainly are always cognizant of the federal transportation funding bills when things are discussed at that level and we have no immediate plans to shut down any projects,” Virginia DOT spokesman Janson Bond told WDBJ on Friday (July 31).

“So it’s certainly good news (that Congress passed an extension), and we’ll look forward to seeing that long-term solution.”

Long-Term Bill on the Table

Meanwhile, there is hope on the horizon for those seeking a long-term plan. The Associated Press reported that the Senate passed a six-year plan on July 30, even though the House of Representatives broke for a summer recess without considering it.

©iStock.com / levkr

Although state leaders have mixed reactions on what the short-term bill will mean for highway projects in their states, all agree that the federal government needs a long-term funding solution.

The Senate’s $350 billion plan would make changes to highway, transit, railroad and auto safety programs, the AP said. However, the news agency also said bill sponsors have enough money for only the first three years of it.

Although the bill would replenish the Highway Trust Fund for three years using $45 billion in revenue increases and cuts elsewhere in the federal budget—including $16 billion saved by reducing the government’s dividend paid to large banks—it also encourages states to enact legislation that would impose user fees on electric vehicles, the AP said. Electric vehicles do not contribute to the federal gas tax revenues.

The bill also sets aside money for major highway projects and attempts to speed up environmental reviews of proposed construction projects.

Compromise of Compromises

But the six-year plan is still a compromise. Several bill proposals that included gas tax increases and a variety of other funding sources came from both Republicans and Democrats earlier this year. The Obama Administration also had sent to Congress its six-year, $478 billion GROW AMERICA Act, which aims at providing a certain funding solution for infrastructure with a 45 percent investment in transportation.

At the end of the day, Congress could not get bipartisan support in both the House and Senate before time ran out. The short-term solution was the only one both sides could agree on—for now.

That appears to be disturbing to officials who say the only way to move forward is to pass a long-term plan.

“Our view on is that while the short-term solution keeps the fund solvent, it doesn’t do anything to solve the real problem,” said Mark Dinger, a spokesman for the Caltrans, in an interview with CNBC.

“The real problem is finding that long-term, stable funding solution.”

   

Tagged categories: Bridges; Bridges; Construction; Federal Highway Administration (FHWA); Funding; Government; Infrastructure; Roads/Highways

Comment from Jim Johnson, (8/6/2015, 10:23 AM)

If a highway funding bill funded only highways it would be much easier to get passed. Instead the typical long term bill is filled with pork and also funds other things besides roads and bridges, like high speed rail, slow speed rail and seldom used mass transit projects. Remove the pork and non-highway related projects and it would be far easier for Congress to pass it.


Comment from Mark Anater, (8/6/2015, 11:47 AM)

We need a serious rethinking of transportation policy. The federal priorities haven't changed significantly since the Interstate Highway Act in the mid-50's, even though the way people live has changed quite a bit. Highways are expensive to build and maintain, and many are underused, yet the average person never calls them "pork." They are also wasteful of space, encourage sprawl, isolate us socially, and are deadly for thousands every year. Policies that encourage mass transit and de-emphasize driving would make cities more livable and slow down consumption of fossil fuel. Unfortunately I don't expect anything to change in the near future, since too many people are too invested in the current systems, and Congress can't do much of anything in its extreme partisan divide.


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