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COVID-19 Relief Details $10B for Infrastructure

Wednesday, January 6, 2021

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At the end of December, President Donald J. Trump signed a $900 billion COVID-19 relief package, allotting $10 billion for highway infrastructure programs.

The package was signed on Dec. 27, 2020, and allows for states, territories and tribes to use the available funds for costs associated with maintenance, operations, personnel and coverage for revenue losses.

“Since the early response to the pandemic, state DOTs have faced severe losses in state transportation revenues as vehicle travel declined," Jim Tymon, Executive Director of the American Association of State Highway and Transportation Officials, said in a statement.

"This COVID relief bill enables state DOTs to stay on track and support the efficient movement of critical goods and services as they maintain their transportation systems. Furthermore, this timely federal support will help state DOTs to retain their institutional capacities and to be prepared to deliver future infrastructure investment driving economic recovery and growth.”

USDOT & COVID-19

A month after the coronavirus pandemic began affecting the United States in March 2019, 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 COVID-19 pandemic.

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

The announcement for funding arrives after the AASHTO inked a letter to Congressional leaders in March, seeking support for the creation of a fiscal “backstop” for the transportation sector as a result of the economic impact experienced from COVID-19.

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 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.

graphiknation / Getty Images

At the end of December, President Donald J. Trump signed a $900 billion COVID-19 relief package, allotting $10 billion for highway infrastructure programs.

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 Coronavirus Aid, Relief, and Economic Security (CARES) Act.

“We are ready to support these efforts and work together to expedite our Nation’s economic recovery while maximizing efficiencies, ensuring compliance, and promoting fraud awareness,” stated the memorandum.

According to the memorandum, the Office of Inspector General (OIG) intends to provide an initial product in the coming months which will crosscut oversight risks and suggestions for mitigation regarding the Department’s efforts.

The product plans to leverage key insight for bolstering the Department’s oversight of CARES Act grantees and contractors.

Additionally, Behm points out that because of the volume and speed required to make CARES Act funds available to the public, transactions are at higher risk for fraud, waste, and abuse. To mediate these possible threats, the USDOT and OIG planned to work together and look for any early indicators that might suggest potential misuse.

However, regardless of funding and mitigation efforts, in August it was announced by the American Road and Transportation Builders Association that transportation revenue and construction programs from states and local governments had $9.6 billion worth of projects that were delayed or canceled.

“While many projects continue as transportation construction is deemed essential, state and local governments and transportation authorities are beginning to feel the strain of declining revenues related to user fees and the overall slowdown in economic activity,” the ARTBA said.

“The immediate economic impact and potential job losses are difficult to quantify at this time, but each $1 billion in transportation construction investment supports an average of 13,000 jobs throughout all sectors of the economy, according to the Federal Highway Administration.”

Some key highlights from the data included:

  • Currently 16 states have announced project delays or cancellations valued at nearly $5.01 billion. These include Florida, Georgia, Hawaii, Kentucky, Massachusetts, Mississippi, Missouri, Nevada, New Mexico, North Carolina, Ohio, Pennsylvania, Vermont, Washington, West Virginia and Wyoming.
  • There are 20 local governments and authorities that have also announced project delays or cancellations of $4.54 billion.
  • 10 states or local areas have vetoed, canceled or postponed legislative initiatives or ballot measures related to transportation funding because of the pandemic.
  • At least 46 states, transportation authorities and local governments have publicly projected declining revenues.
  • The estimated value impacted by the delays or cancelations of funding initiatives and ballot measures comes in at $132.8 billion.
  • The estimated value impacted by revenue declines, budget cuts or diverted funds weighs in at $333.68 billion.

The ARTBA outlines information from each state here.

New Funding

In a 359-53 vote, the U.S. House of Representatives passed the 5,593-page legislative package, while the Senate passed the legislation in a 92-6 vote on Dec. 21. Trump signed the legislation days later.

In addition to the $10 billion allotted for highway infrastructure programs, the legislation also offers $284 billion for first and second PPP loans to support small businesses, expanded PPP eligibility for local newspapers, television and radio broadcasters and $15 billion for movie theaters and live venues.

The package also includes authorization of the Water Resources Development Act, which supports water-related infrastructure such as ports, harbors and inland waterways.

According to analysis by AASHTO’s policy team, the $10 billion worth COVID-19 relief set aside for state DOTs must be apportioned by the Federal Highway Administration within 30 days of the bill’s enactment and will be based on each state’s share of obligation limitations within the recently extended FAST Act.

The analysis further indicates that the relief package will be able to be use by state DOTs to fund Surface Transportation Block Grant-eligible projects as well as for preventive maintenance, routine maintenance, operations and personnel—including employee and contractor salaries—along with debt service payments, availability payments, and coverage for other revenue losses.

These relief funds could also be transferred to public tolling and ferry agencies for costs related to operations, personnel, salaries, contractors, debt service payments, availability payments and coverage for other revenue losses, and are not subject to existing federal restrictions on tolling revenues.

In terms of FY 2021 Transportation and Housing and Urban Development funding approved as part of this broad fiscal package, AASHTO reports that some $46.365 billion has been provided for Federal-aid Highways obligation limitation in addition to nearly $2 billion in general fund supplement to help support highway bridge rehabilitation programs.

Optimistic about the relief package, Stephen E. Sandherr, CEO of the Associated General Contractors of America, released a statement last month as the COVID-19 relief legislation passed through the United States House and Senate, noting that the measure should provide some help to the construction industry.

“The new coronavirus recovery measure announced today should provide some needed relief for a construction industry that is coping with project cancellations and job losses in most parts of the country,” he said.

“Most notably, the measure includes $10 billion in needed funding to help address the pandemic-induced shortfalls in state transportation revenues. This new funding should keep a number of road projects from getting canceled or delayed over the coming months. The measure also includes new funding for waterways, ports and other maritime facilities.”

In addition to the funding, though, the measure also reaffirmed the original Congressional intent that employers who utilized the Paycheck Protection Program loans will not be forced to pay more taxes as a result.

“Given that demand for many types of commercial construction projects is likely to remain soft in 2021, the administration’s plan to tax firms for their forgiven loan amount would have cost many construction jobs. Instead, the new recovery measure will preserve many of the original benefits of the Paycheck Protection Program, something our association has worked aggressively to ensure.”

   

Tagged categories: Bridges; Bridges; COVID-19; Funding; Government; Infrastructure; Infrastructure; NA; North America; President Trump; Program/Project Management; Project Management; Roads/Highways

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