Among the many provisions in the coronavirus relief bill, one key item is $10 billion to help state highway agencies make up for losses in state fuel taxes and other revenue due to the pandemic-caused falloff in traffic this year. Construction is one of a list of several eligible uses for the money—one of only a few construction funding provisions in the relief measure.
After the House and Senate quickly approved the wide-ranging $900-billion COVID relief legislation, which was joined with a $1.4-trillion spending measure, construction and transportation officials were looking forward to tapping into that new source of funds soon.
The package’s outlook quickly turned murky on Dec. 22 when President Trump, in a video, blasted the overall measure as “a disgrace.”
He pointed in particular to the bill’s $600 payment to individuals and said it should have been $2,000. When the House met on Dec. 24, Speaker Nancy Pelosi (D-Calif.) attempted to pass a narrowly targeted bill that would increase the payment to $2,000 from $600.But passage would have required unanimous approval and Republicans objected. The GOP offered a bill that would reexamine the foreign aid section of the legislation—another area that Trump had criticized. This time, Democrats objected.
Pelosi then said that when the House meets on Dec. 28, Democrats would offer a stand-alone bill to raise the payments to individuals.
But the President then opted to sign the bill on Dec. 27.
Trump didn't criticize the package's highway provision or its aid for transit agencies, airports, airlines and other transportation organizations.
Infrastructure advocates are hoping that the $10 billion will be part of enacted legislation, the sooner the better.
Joung Lee, the American Association of State Highway and Transportation Officials (AASHTO) director of policy and government relations, says that the new $10 billion can be directed to a range of uses, including capital projects. He also says how the money is applied is “really going to vary from state to state.”
The text of the bill enumerates several eligible uses for the money. They include: preventive or routine maintenance, operations, salaries and other personnel expenses and debt service payments, as well as “coverage for other revenue losses.”
Keep the Bottom from Falling Out
Lee says, “Essentially our ‘ask’ to Congress is: ‘Look, the states’ transportation revenues based on user fees at the state level have taken a big hit. Please help us replenish that.’” He adds, “‘For the state DOTs, the rationale here has been all along to use the COVID relief funds to prevent the bottom from falling out.”
Lee says there have been furloughs at some DOTs and hiring freezes have been common. Much of the new money is expected to go to salaries and operations, to retain state DOTs' staffers.
They may well have a fuller slate of issues to deal with, AASHTO figures. Lee says the group sees the prospect in 2021 of a five-or-six-year surface transportation bill and an infrastructure proposal promised by President-elect Biden.
He adds, “And we wanted to make sure that state DOTs don’t lose their ability and their personnel to be able to deliver when called upon, hopefully early next year.”
The bill's text also says that the lion’s share of the total, about $9.8 billion, can go for a range of other uses under the Federal Highway Administration’s existing, highly flexible Surface Transportation Program Block Grants.
Construction of highways, bridges and tunnels is one of those block grant uses.
The campaign for the highway funding began months ago. In April, AASHTO asked Congress for just under $50 billion over two years. At about that time, the group estimated state DOTs’ cumulative pandemic-related revenue lost at about 27%.
Then in July, as miles-traveled and fuel-tax revenue rose, AASHTO revised its estimates, seeking $37 billion over five years. Of that sum, it figured that it would take $16 billion to cover revenue losses through Sept. 30.
A November AASHTO poll that included nearly all of its state member agencies showed revenue losses ranging from zero to 30% in the period from Oct. 1 to the date of the poll, Lee says. The largest concentration of states reported losses in the 10% to 15% range.
The highway funding provision was a top priority for construction groups. Along with AASHTO, they pushed hard for the highway dollars, which they highlighted as one of the most important in the COVID-relief section of the legislative package.
Stephen E. Sandherr, Associated General Contractors of America chief executive officer, said in a statement, “This new funding should keep a number of road projects from getting canceled or delayed."
Michele Stanley, National Stone, Sand & Gravel Association vice president of government and regulatory affairs, said in a statement that the highway allocation “is real money going towards previously scheduled public works projects and infrastructure improvements.” Stanley said the NSSGA lobbying drive included members sending more than 1,800 letters and making “countless” phone calls to congressional offices advocating the highway funds.
Lee says, "We are absolutely grateful to Congress to be able to get this really crucial relief for the state DOTs all across the country." He adds, "But this is obviously still a long-term need so far, with more ahead."
Story updated on 12/24/2020 with House maneuverings on that date and on 12.28 with President Trump's approval of the bill. Story corrected on 12/30/2020 to remove reference to use of relief bill highway funds for local matching share. Those funds cannot be used for that purpose.