Shutdown Affects Some, But Not All, Infrastructure Programs
The partial shutdown of the federal government, which is nearing the end of its second week, will have an effect on some federal construction programs—especially those under the Federal Transit Administration—but other major infrastructure accounts, particularly highways, will continue with little change.
As the shutdown continued, no deal was immediately in sight between President Trump, who continues to push for funding for a wall on the southwest U.S. border, and top Democrats, who strongly oppose that plan.
As the 116th Congress opened on Jan. 3, with Democrats now holding the House majority, that chamber approved a two-bill plan to end the shutdown.
The first measure would fund nearly all of the departments and agencies hit by the shutdown through the rest of fiscal year 2019. Funding would be nearly the same as the levels contained in spending measures that the full Senate or that chamber's Approprations Committee cleared earlier in 2018.
The second bill would fund the Dept. of Homeland Security through Feb. 8 at 2018 levels. Neither the DHS bill nor the multi-agency spending package has the funds Trump is seeking for the border wall.
But the White House issued a statement saying that Trump would veto either of the House bills, if they were to reach his desk. They may not get that far: earlier on Jan. 3, Senate Majority Leader Mitch McConnell (R-Ky.) said that the Senate wouldn't take up legislation that didn't "have a real chance of...getting a presidential signature."
In the meantime, the impact of the shutdown, which began on Dec. 22, remained uneven across federal construction programs. Some programs have all their funding in place, thanks to enactment of full-year fiscal 2019 appropriations bills before the November elections.
Programs in that category include Dept. of Defense construction, Dept. of Veterans Affairs major and minor health-care facilities construction, Army Corps of Engineers civil-works construction, and Dept. of Energy defense environmental cleanup.
Highway, airport funds
The Dept. of Transportation is one of the agencies swept up in the shutdown, but funding for DOT’s largest infrastructure program, federal-aid highways, will continue to flow, a senior administration official says, because it draws from the user-fee supported Highway Trust Fund, not the general fund.
Brian Deery, senior director of the Associated General Contractors of America’s highway and transportation division, said via email that because of the trust fund, the shutdown’s impact on federal-aid highways “is minimal.”
The Federal Aviation Administration's Airport Improvement Program (AIP), which provides more than $3 billion per year to airports for infrastructure projects, also continues to process grants and "is not affected by the partial shutdown," an FAA spokesperson said via email. AIP draws on the Airport and Airway Trust Fund, which is supported by a passenger ticket tax, aviation fuel tax and other user fees.
Other DOT infrastructure accounts, however, could be affected, such as the Better Utilitizing Investments to Leverage Development, or BUILD, grants, which draw from the general fund.
DOT on Dec, 11 announced nearly $1.5 billion in BUILD grant awards, but Deery says that with the shutdown, some of those awards “may be slowed down.” The program formerly was known as TIGER grants, for Transportation Investment Generating Economic Recovery.
FTA workforce hit hard
Deery adds that the Federal Transit Administration (FTA) Capital Investment Grant program, which funds new transit project starts and relies on the general fund, could see a slowdown, too.
But Deery notes that those federal transit capital grants are matched by sizable state or local funds, which regional transit agencies could use to keep projects on track until federal funding resumes.
Transit agencies relying on FTA funding would be hit much harder than state DOTs receiving highway funding. As the American Public Transit Administration noted in a Dec. 21 Legislative Update, "Most operations of the FTA would cease to function except for issues related to life and safety."
APTA cites a U.S. DOT document, issued earlier in December, stating that 88% of FTA's workforce will be furloughed. By comparison, the Federal Highway Administration will have no workers furloughed. Both agencies receive funding through the Highway Trust Fund, but most of FHWA's workers are supported by the trust fund, and most of FTA's staff, including those who oversee grant programs, are funded through the general fund.
In addition, the DOT plan says FTA would not issue any grants or contracts or reimburse local transit agencies for any construction projects or operations, until the shutdown ends.
Deery says, “If the shutdown gets resolved without too much delay, the impact on the highway...programs will be minimal.” He also says, “However, the longer it drags on, states may hold back on [bid] lettings because of the uncertainty.”
The senior administration official told reporters in a Dec. 22 conference call said that overall the shutdown affects agencies that account for about 25% of annual federal discretionary funding. He also said that the affected agencies’ combined total number of employees equals about 15% of the overall federal workforce.
He also said that the Trump administration wanted to make the shutdown as “painless as possible, consistent with the law.” He added, “We want to have minimum disruption for the American people as we try to work with Congress to get our border security priorities passed.”
EPA water infrastructure
Not all agencies hit by the lapse in appropriations implemented a full closing on Dec. 22. E&E News reported that Acting Environmental Protection Agency Administrator Andrew Wheeler said that the agency had “sufficient carryover funds” to stay open through the week of Dec. 24.
But with EPA furloughing most of its workers by Dec. 29, industry officials were studying what the effects might be for the agency's infrastructure programs, especially its aid to clean-water and drinking-water State Revolving Funds (SRFs) and its Water Infrastructure Finance and Innovation Act (WIFIA) loans.
Adam Krantz, National Association of Clean Water Agencies chief executive officer, said in a Dec. 27 email, "My understanding is that for the foreseeable future, there is no severe impact to our members or stoppage of infrastructure projects but obviously anything that impacts staffing and funding—namely to get approvals for WIFIA or SRF projects—is of concern."
Tommy Holmes, American Water Works Association legislative director, noted in an emaiil that under the SRFs, state agencies get annual capitalization grants from EPA and in turn make loans to water utilities and manage the funds.
He adds, "This is supposed to be a revolving loan program, so money does come back to the states as loans are repaid. Therefore, states should be able to continue loans at least for a little while."
For WIFIA, Holmes says, "EPA cannot issue a notice of funding availability for a new round of loans until it gets FY 2019 appropriations."
WIFIA was authorized in 2014 but, partly because of a low level of appropriations for the program, EPA didn't approve its first WIFIA loans until this year. So far in 2018, however, the agency has cleared six loans, totaling more than $1.5 billion.
Story updated on 1/3/2019 with House votes on measures to fund agencies in shutdown status.