U.S. DOT likely to delay reimbursements this summer

AGC of America reports that last week committees in the Senate and the House heard from U.S. Secretary of Transportation Anthony Foxx and other Department officials about their FY 2015 budget submission MAP-21 reauthorization and how they intend to administer highway and transit programs considering the pending insolvency of the Highway Trust Fund (HTF).

Acting Department of Transportation (DOT) Undersecretary for Policy Peter Rogoff warned the House Transportation and Infrastructure Committee that in order to maintain an HTF balance of $4 billion for the highway account and $1 billion for the transit account as required by law DOT will have to delay payments to state highway and transit programs at some point this summer. The highway account is expected to dip below $4 billion as soon as July and the transit account is projected to fall below $1 billion in August. At the hearing Rogoff acknowledged the looming threat of insolvency could lead states to begin delaying construction projects this spring. In order to prevent the possible slowdown in reimbursements from DOT this summer Congress and the administration must provide the HTF at least $4 billion in order for obligation to be met through Sept. 30 2014.  

Last week President Obama’s FY 2015 budget submission recognized the fact that these emergency measures may have to be taken by DOT; however the budget did not propose a long-term sustainable funding solution for the HTF. Instead the budget calls for a one-time infusion of $150 billion from “pro-growth” tax reform $63 billion of the proposed $150 billion would be needed just to maintain current HTF spending. Secretary Foxx defended DOT’s proposal this week at hearings in the House and Senate Appropriations Committees.  

Specifically Foxx reinforced the administration’s plan to fund a 4-year $302 billion reauthorization of MAP-21 using revenue from tax reform. He faced some criticism for offering a one-time revenue infusion and ignoring the need to provide the HTF with a long-term sustainable funding source. There was recognition at both House and Senate hearings that finding a solution to the troubles facing the HTF in the short-term and long-term is going to require Congress and the administration to work together.

In addition Secretary Foxx announced that the administration will send a MAP-21 reauthorization proposal to Congress in April.

AGC continues to educate members of the Congress about the impacts of the pending HTF insolvency on the construction industry and the need to reauthorize MAP-21 and encourages you to do the same. Participate in the “Hardhats for Highways” campaign launched last week by the AGC co-chaired Transportation Construction Coalition to educate your representatives and senators about the impact the pending HTF insolvency will have on your company and job.

For more information please contact AGC of America’s Sean O’Neill at 202.547.8892 or oneills@agc.org.