Construction companies that rely on federal highway, transit and airport contracts can breathe a little easier as legislation is moving in Congress to extend surface-transportation and aviation programs as well as the taxes that finance them. But the relief is only temporary. The new legislation continues highway and transit programs through March 31 and extends airport grants and other Federal Aviation Administration programs through Jan. 31.
The House passed the new stopgap measure on Sept. 12, on a voice vote. Senate action was expected to follow. Lawmakers were aiming to wrap up the bill before the current short-term aviation bill expired on Sept. 16 and well before the highway-transit authorization runs out on Sept. 30.
The surface-transportation and aviation measures are “clean” extensions, meaning they are free of policy changes. There is also a highway obligation ceiling of about $20.6 billion for the new extension's six-month span—half of the 2011 amount. FAA's Airport Improvement Program (AIP) will get $1.8 billion for construction grants over its period of about four and a half months.
Construction officials and state transportation and airport managers are weary of operating under stopgap authorizations. The new bill would be the eighth highway-transit extension since September 2009 and the 22nd FAA stopgap since September 2007—the dates when the last multiyear authorizations for those programs expired.
The stopgaps have been necessary because Congress has been unable to pass new long-term bills. The main hang-up for surface transportation is a funding shortfall and congressional opposition to hiking the gas tax. A multiyear FAA bill has been stalled at least in part because of a labor-relations issue, but, more recently, differences over funding have arisen, too.
Construction officials have pushed for a new multiyear highway-transit bill. The House and Senate have each floated proposals, but their funding levels are far apart.
Is industry pleased with the extensions? “I guess the word would be 'relieved,'” says Stephen Sandherr, Associated General Contractors of America CEO, “But we're disappointed that we keep kicking this can down the road.”
In moving the FAA extension, legislators wanted to avoid repeating the House-Senate fight in July over the last stopgap. It wasn't enacted until Aug. 5, two weeks after the previous one expired. In the meantime, $790 million in airport construction projects were shut down, no new AIP grants were approved, and 4,000 FAA workers were furloughed.
Looking at the new FAA extension, Todd Hauptli, American Association of Airport Executives senior executive vice president, says, "Current-level funding is better than reduced funding, so that part's good. Not having the [last extension's] big meltdown is also good.”
But he adds, “Eventually we've got to get the big multiyear bill done so there's predictable, steady funding for airports. The stop-and-start nature of these extensions makes it difficult for airports to plan effectively, and airports have had to redo construction programs a number of times over the past three years. We'd like to get this resolved and move on.”
House Transportation and Infrastructure Committee Chairman John Mica (R-Fla.) says long-term highway-transit and FAA bills are needed. He calls the new stopgaps “a last chance to roll up our sleeves and get transportation projects in America moving again.”