Billions in federal transportation funding saved just before cutoff

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Updated Oct 5, 2020

Dsc02714The day before the federal government was set to shut down, the Senate passed legislation to keep the government running for two more months while extending for another year the nation’s main funding source for highways, public transit and airports.

The U.S. Senate voted 84-10 on September 30 to keep the government funded until December 11. It also extended the FAST Act until September 30, 2021, at current spending levels of $73.4 billion. The vote follows the House’s passage of the extension September 22 in a 359-57 vote. The president signed the legislation after Senate passage.

The Fixing America’s Surface Transportation Act was established in 2015 and provided $305 billion for fiscal years 2016 to 2020. With it set to expire September 30, the road construction industry, as well as other construction and business groups, had hoped Congress might provide a long-term, permanent funding source for roads and bridges and other transportation infrastructure. They had also hoped to see additional funding for states to offset a drop in gas tax and other revenues due to fewer drivers on the road during the early months of the pandemic.

Partisan bickering in Washington, however, prevented any agreement on long-term, additional  funding. Instead, the industry groups were forced in the weeks ahead of the deadline to make desperate pleas to just maintain enough funding for another year. If it had expired, state and local governments would have lost a cumulative $47.1 billion for highway, $12.3 billion for transit and $14 billion for airport projects for the next fiscal year, which begins October 1.

The legislation also includes $9.1 billion for the Federal-Aid Highway Program through December 11, according to the American Association of State Highway and Transportation Officials. The program provides financial assistance to state and local governments for federal highway maintenance, repair and construction.

The provisions in the newly passed legislation also keep the Highway Trust Fund solvent by transferring $13.6 billion to it from the federal government’s general fund. The money in the HTF is used to fund the FAST Act program and receives revenue from federal gas and diesel taxes. Those revenues do not keep pace with the rate of spending and so each year the trust fund receives general fund transfers so the government can meet its transportation funding obligations. AASHTO and other industry groups plan to keep pushing for long-term transportation funding.

“We are pleased that Congress approved the $13.6 billion transfer to the Highway Trust Fund and that states will have certainty for planning their 2021 programs, knowing the current surface transportation legislation remains in place for another year,” said Jim Tymon, AASHTO’s executive director.

“We look forward to working with Congress and committee staff on a reauthorization that will address the challenges facing surface transportation, including the need for a long-term fix for the Highway Trust Fund.”