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AASHTO Renews Call for DOT Emergency Aid

Wednesday, October 14, 2020

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At the beginning of the month, American Association of State Highway and Transportation Officials inked a letter to Congressional leaders renewing its request of $37 billion in direct federal funding be provided to state Departments of Transportation in the pending COVID-19 relief package.

“This crucial federal backstop will prevent cancellations and delays of vital transportation projects as well as potential job losses both in the state DOT workforce and the private sector,” explained Jim Tymon, AASHTO’s Executive Director, in the letter.

“And just as important, this federal funding can also jump-start much needed economic activity as the United States continues to recover from the effects of the [COVID-19] pandemic.”

Infrastructure Relief History

As a response to the COVID-19 pandemic, at the end of March, President Donald J. Trump signed a $2 trillion stimulus bill aimed to help American citizens experiencing lay-offs, companies suffering financially and the health care system.

While the opportunity for federal aid came as a relief, in some cases, splitting up the grants was left up to localities and other recipients. Some reports claim that with drastic revenue losses, some airports and transit systems would be more likely to use the relief to offset that revenue verses putting the money into ongoing or upcoming construction projects.

Nikada / Getty Images

At the beginning of the month, American Association of State Highway and Transportation Officials inked a letter to Congressional leaders renewing its request of $37 billion in direct federal funding be provided to state Departments of Transportation in the pending COVID-19 relief package.

However, in breaking down the allotted funding, the Engineering News-Record calculated that while more than 80% of the package will go to state, local governments and communities, infrastructure and construction could be eligible for roughly $43 billion of that total.

By April, the United States Department of Transportation announced $25 billion in federal funding allocations for the nation’s transportation systems and $1 billion in funding for the National Railroad Passenger Corporation (Amtrak) in response to the pandemic. The announcement for funding arrived after AASHTO officials inked a letter to Congressional leaders in March, seeking support for the creation of a fiscal “backstop” for the transportation sector.

In the letter, AASHTO urged Congress to grant an immediate and temporary waiver for federal truck weight restrictions, giving states maximum flexibility and discretion to manage interstate transportation of emergency supplies in combatting against the virus.

Additionally, officials also requested $16.7 billion in supplemental federal transportation funding to backstop expected state revenue shortfalls and asked that transportation investments “double down” so that highway and transit investment backlog can be reduced, and long-term economic recovery could be enabled.

In the same letter, AASHTO requested Congress provide $49.95 billion in funding for state DOTs to address estimated state transportation revenue losses over 18 months. At the time, the association projected that state DOTs would experience at least a 30% decline in transportation revenues. To mediate the decline, ASSHTO requested $16.7 billion to cover revenue losses for the remainder of fiscal year 2020 and $33.3 billion for FY 2021.

Both allocations were made available through the Coronavirus Aid, Relief, and Economic Security Act, which was signed by Trump on March 27.

Later that same month, Acting Inspector General Mitchell L. Behm issued a memorandum to the Secretary on supporting efforts made by the United States Department of Transportation that aim to meet provisions outlined in the CARES Act.

According to the memorandum, the OIG intended to provide an initial product in the coming months that would crosscut oversight risks, mitigation suggestions, and also plans to leverage key insight for bolstering the Department’s oversight of CARES Act grantees and contractors.

In June, the United States Senate returned from recess with the intent to begin discussions on the Health and Economic Recovery Omnibus Emergency Solutions Act. Building on the previously passed CARES Act in wake of COVID-19, the 1,800-page package intends to provide an additional $3 trillion to states and cities, including $15 billion for highway programs.

First unveiled back in January, House Democrats voiced their intent of pushing a massive infrastructure package in a follow-up installment to the CARES Act. According to the Associated Press, the plan centers on a $760 billion, five-year framework that includes money to rebuild roads, mass transit, rail systems, wireless communications networks and water projects.

While the January blueprint lacked a long-term source of funding, the proposal outlined $105 billion for transit systems, $86 billion for investments in broadband, $60.5 billion for wastewater and other water infrastructure programs, and $55 billion for rail networks.

The finalized over $3 trillion plan, however, includes a wide-ranging economic recovery bill which is intended to be used for extended unemployment benefits, state and local governments, and hospitals, plus expanded job protections and benefits for workers.

Most recently, in July, AASHTO officials urged in a letter to Congressional leadership that state DOTs across the country required an immediate infusion of at least $37 billion to ensure the delivery of slated transportation projects.

"With millions of Americans following 'stay-at-home' orders, many state DOTs are facing severe losses in revenues, including dedicated user fee revenues on which state transportation programs heavily rely," the letter stated. "Projections continue to show decreases in state motor fuel tax and toll receipts as nationwide vehicle traffic reduction bottomed out at about 50% during the height of the pandemic. As a result, the ability of state DOTs to carry out their core functions, including capital construction programs, is threatened."

Furthermore, the letter pointed out that many state DOTs have imposed furloughs and delayed or cancelled $8.6 billion in critical transportation projects, further putting at risk transportation construction jobs and the timely realization of benefits the projects would bring to communities and commerce.

At the time, the association noted that as updated data became more available, new estimates suggested that state transportation revenue would experience $37 billion worth of losses over five years, with an estimated loss of $16 billion in FY 2020.

What Now

Sticking by its projected numbers made in July, AASHTO has again requested COVID-19 funding assistance to help prevent cancellations and delays of vital transportation projects as well as potential job losses both in the state DOT workforce and the private sector.

"Since the beginning of the pandemic in March, state DOTs continue to face severe losses in dedicated user fee revenues including motor fuel taxes," the letter states. "These transportation-specific revenues are outside of a state’s general fund and comprise the foundation of every statewide transportation investment program. With the prolonged erosion of state transportation revenues, the ability of state DOTs to carry out their core functions such as delivering capital and construction programs, safely operating their transportation systems, maintaining a state of good repair, and meeting payroll and administrative needs remain threatened."

As a result of these issues, the association estimates that the revenue overall recovery period for state transportation revenues will take longer than previously expected—roughly five years, according to recent data.

“These transportation-specific revenues are outside of a state’s general fund and comprise the foundation of every statewide transportation investment program,” Tymon stressed in the letter.

“With the prolonged erosion of state transportation revenues, the ability of state DOTs to carry out their core functions such as delivering capital and construction programs, safely operating their transportation systems, maintaining a state of good repair, and meeting payroll and administrative needs remain threatened,” he said.

While the letter also expressed gratitude to Congress for the passage of a one-year FAST Act extension, without the $37 billion in additional federal funding assistance, AASHTO warns that the important surface transportation program stability provided by this extension could be jeopardized.

View all of PaintSquare Daily News' coverage on COVID-19, here.

   

Tagged categories: AASHTO; COVID-19; Department of Transportation (DOT); Funding; Government; NA; North America; Program/Project Management; Project Management; Transportation

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