AGC is looking to the future of federal transportation funding and what steps can be taken to fix the Highway Trust Fund revenue shortfall and be sure that future revenue is tied to a user fee based system. One approach was discussed in the recent Congressional Budget Office report.

The Congressional Budget Office (CBO) released a report this week examining different approaches for providing Federal funding to states for highway infrastructure investment. The report was focused on making better investment decisions realizing that the federal government’s main source of funds for highways—gasoline tax revenues dedicated to the Highway Trust Fund—has been insufficient to pay for federal spending on highways. Since 2008, lawmakers have transferred about $143 billion from other sources to maintain a positive balance in the trust fund. It also noted that, adjusted for changes in construction costs, total federal spending on highways buys less now than at any time since the early 1990s.

February 11, the House Transportation and Infrastructure Committee approved H.R. 4441, the Aviation Innovation Reform and Reauthorization (AIRR) Act, a bill to reauthorize for six years the Federal Aviation Administration (FAA) programs. A key component of the AIRR Act is the transfer air traffic control services from the FAA to a non-profit, user-fee-supported corporation. Committee approval clears the way for the full House consideration. The FAA is currently operating under an extension that expires on March 31 and the hope is that the legislation can be completed before that deadline, however, the ATC privatization is highly controversial which could slow down immediate action.

President Obama’s FY 2017 budget request for the US Department of Transportation supports FAST Act funding levels of $43.27 billion for the federal-aid highway and $9.535 transit programs. The proposal also revives an idea the Administration has suggested several times previously to replace the existing Highway Trust Fund with a new Transportation Trust Fund.

FHWA has interpreted recent changes in the federal Cargo Preference Act as applying to federal-aid highway contracts. The Act, which has been around since 1954, requires that “at least 50 percent of any equipment, materials or commodities” procured with federal funds, and which may be shipped by ocean vessel, must be transported on privately-owned United States-flagged commercial vessels.

The White House announced this week that the budget request President Obama will present to Congress next week will propose a $10-a-barrel oil tax, phased in over five years, to pay for a variety of transportation initiatives. The White House announced this week that the budget request President Obama will present to Congress next week will propose a $10-a-barrel oil tax, phased in over five years, to pay for a variety of transportation initiatives.

AGC submitted comments to the Federal Highway Administration (FHWA) on its fourth solicitation for the Every Day Counts (EDC) initiative. AGC supported the Administration’s proposal to include construction partnering in the initiative, demonstrating past success through partnering and emphasizing the need for renewed focus as partnering with certain state DOTs has become too routine and has lost its effectiveness.

Yesterday, Transportation & Infrastructure Chairman Bill Shuster (R-Pa.) introduced the Aviation Innovation, Reform, and Reauthorization (AIRR) Act of 2016. The bill would authorize programs run by the Federal Aviation Administration (FAA) through fiscal year 2022. The FAA has been operating under a number of short-term extensions with the current one expiring on March 31. The bill includes provisions closely tracked by AGC including airport infrastructure funding and financing, and the regulation of the commercial use of drones.

AGC’s 97th Annual Convention will be held March 9-11, 2016 in San Antonio, Texas. Please visit meetings.agc.org/convention for registration information. Below is a preview of the Utility Infrastructure, Federal & Heavy Construction, and Highway & Transportation Division meetings.

In its first analysis of the Highway Trust Fund, following passage of the long-term highway & transit bill known as the FAST Act, the Congressional Budget Office reports that in fiscal year 2021 (the last year of the act’s authorization) the trust fund balance will be zero and that the government will need $113 billion in additional revenue to maintain funding for the ensuing six years. This analysis vividly demonstrates the challenges facing federal surface transportation programs in the future.