Infrastructure Funding
Stopgap Spending Bill a Mixed Bag for Construction
Measure has $4B for storm repairs, $170M for drinking water, but freezes highway aid.
The stopgap spending measure that Congress approved just before a government-shutdown deadline funds most federal programs, including construction accounts, at fiscal 2016 levels until April 28.
Construction officials were relieved that federal agencies will continue to operate, but they see the legislation as a mixed bag for the industry.
On the plus side, the Continuing Resolution (CR), which President Obama signed early in the morning of Dec. 10, includes $4.1 billion for emergency disaster relief, much of which is expected to go for infrastructure repairs and reconstruction.
But transportation and construction groups are unhappy that the CR’s funding freeze at 2016’s level means that highway and transit programs won’t receive the increased federal aid that the Fixing America’s Surface Transportation (FAST) Act authorized for fiscal 2017.
Water industry officials, however, see good news in the CR. They point out that it appropriates long-awaited funds to repair aging or contaminated drinking-water systems, such as the one in Flint, Mich. They also note that the measure contains money to help the fledgling Water Infrastructure Finance and Innovation Act (WIFIA) program begin to approve loans for water projects.
The disaster-relief portion of the CR includes $1.8 billion for Housing and Urban Development Dept. community development block grants, some of which can go for reconstruction. It also has $1 billion for the Army Corps of Engineers for dredging work and repairs to flood-protection projects. The Federal Highway Administration receives $1 billion for its emergency relief program to repair storm-damaged highways.
The CR has $170 million for cities such as Flint, for which a presidential emergency declaration has been made. Most of that assistance—$100 million—will go for the drinking-water state revolving fund (SRF) loan; $70 million will fund other programs to address the lead crisis in Flint.
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Those drinking-water appropriation levels are the same as authorizations contained in the recently passed Water Infrastructure Improvements Act for the Nation.
The CR also provides $20 million for WIFIA, including $17 million to seed what would be the program’s first loans. WIFIA was authorized in the 2014 Water Resources Development Act as an Environmental Protection Agency-Army Corps of Engineers program. But until the new CR passed, it had not received any appropriations to allow the agencies to make loans.
Like the successful TIFIA program for transportation projects, WIFIA leverages the federal funds available to support a much larger volume of loans. According to the American Water Works Association, for every WIFIA dollar Congress appropriates, $50 to $60 is expected to be loaned out.
Tommy Holmes, AWWA legislative director, notes that, for the past two years, only a minimal amount of funding has been appropriated for WIFIA, mainly to set up the program, not to issue loans. “At long last, [WIFIA] might begin making loans” in 2017, he says.
Overall, Holmes says, “The good news is … the congressional recognition of the value of both the SRF and WIFIA as financing tools.”
The transportation sector did not fare as well. Brian Deery, senior director of the Associated General Contractors of America’s highway and transportation program, says the FAST Act authorized a 2% boost in highway funding in fiscal 2017. But the amount in the CR is frozen at 2016 levels.
Using American Road & Transportation Builders Association figures, ENR calculates that the FAST Act’s highway obligation limit for all of fiscal year 2017 is $905 million, or 2%, above its 2016 level. The FAST Act’s 2017 transit funding is $188 million, or 1.6%, higher than 2016.
“There is a fear that, when Congress comes back, they are just going to do a CR for the rest of the year, and, therefore, we won’t get a boost in funding” for transportation projects, Deery says.
Besides the cutback in anticipated funding, the CR is expected to have another negative effect. Joung Lee, American Association of State Highway and Transportation Officials director of policy, says, “Another short-term funding measure … will negate a key benefit of the FAST Act, which was to provide stable funding during the five-year period [2016-20].”
Lee adds, “It will impact the ability of states to be able to take full advantage of the summer construction season in 2017, given that this CR will last through the end of April.”
Scott Berry, senior director of AGC’s utility infrastructure construction division, says that, whenever Congress passes stopgap bills, those measures typically don’t address policy issues. “We will be working with appropriators to make sure that Congress does its job and passes regular-order appropriations bills” next year, Berry says.
Military construction and all Dept. of Veterans Affairs programs aren’t covered by the new CR. Congress approved full-year 2017 appropriations for those programs in September.
