President Obama released his Administration's Fiscal year 2011 budget proposal today. For the Federal-aid highway program the budget requests $41.363 billion just slightly more (.6 percent) than the current $41.07billion level. The Administration notes that the highway program expired on September 30, 2009 and repeats its request that authorization be extended through March 2011 to allow time for Congress and the Administration to work on new legislation stating that "surface transportation programs and the system for paying for them must be fundamentally reformed." The budget documents also point out that Highway Trust Fund revenue is insufficient to fund the program at this level and assumes that $20 billion will be transferred from the general fund to cover the revenue short fall.

Continuing the Administration's year long emphasis for "livability and sustainability", the budget calls for an allocation of $527 for its multi-agency Partnership for Sustainable Communities, including a request to transfer $200 million in highway program funding for this initiative. The budget requests the creation of an Office of Livable Communities within the Department of Transportation to coordinate efforts between Dot and the Environmental Protection Agency and Department of Housing and Urban Development.  

The budget requests $600 million in discretionary funds for grants to state and local governments and transit agencies for projects of National, metropolitan or regional significance.

The budget also requests $4 billion to create within the DOT a new National Infrastructure Innovation and Finance Fund. It is proposed that the office will provide grants and credit assistance for a variety of surface transportation projects, including: highway, tunnel, bridge transit, commuter rail, passenger and freight intermodal facilities, passenger rail, Amtrak, airports and ports. The projects are to be of National or regional significance and be valued at $25 million or more. Projects of less than $25 million can be approved in areas with smaller populations. An additional criterion for funds under this proposed program is that the projects increase the environmental sustainability of the transportation network in the region.  

Included in the budget is a request for an additional $1 billion in funding for high speed rail. This is to supplement the $8 billion in funds provided (with grant awards announced this week) in the American Recovery and Reinvestment Act (ARRA).

For the Federal Transit Administration, the budget requests $10.8 billion in grant funding, also a .06 percent increase over FY 2009. The budget makes several proposals for altering the transit program's structure.

Funding for the Federal Aviation Administration's Airport Improvement Program is proposed to be continued at the FY 2009 level of $3.515 billion.

The Congressional Budget Office (CBO) released its January 2010 economic forecast this week, which includes estimates on Highway Trust Fund revenue and balances for the coming year, as well as projections for the next ten years.  CBO estimates that the Highway Account of the Trust Fund will have an end of year balance of about $3 billion -less than one month's spending during summer months.  An end of the year balance this low would mean the Highway Account will be unable to meet obligations in a timely manner again this year without a transfer of funds from the general fund or other revenue source.  

 CBO estimates that the Mass Transit Account will have an end of year balance of $2.9 billion.   CBO estimates that without further action, the Mass Transit Account will likely have cash flow problems similar to the Highway Account during fiscal year 2011.   

 If the Highway Trust Fund's balance gets low enough, spending on highway and transit programs would be slowed.  Department of Transportation has indicated that if the fund reached this level, it would reimburse states at a prorated amount in order to maintain a positive balance in the fund. Congress in the past year has made two transfers of revenue to the HTF totaling $15 billion to keep payments to states flowing in a timely fashion.

Highway and Transportation Division Vice Chair Dean Word participated in a rally organized by the Association of Equipment Manufacturers (AEM) and Associated Equipment Distributors (AED) to bring attention to the need for enactment of long term highway authorization legislation with increased funding levels to address national transportation needs and depression-like economic conditions in the construction industry. AEM and AED have held other "Start Us Up" rallies around the country, which included a parade of construction equipment intended to get media coverage. Word talked about the unprecedented high unemployment levels in the construction industry and AGC's most recent economic survey showing few contractors expect a construction turnaround in 2010.  Indeed, 88 percent of construction firms don't expect overall business conditions to improve until at least 2011.

Federal Highway Administrator Victor Mendez has started an initiative called "Every Day Counts" within the Federal Highway Administration (FHWA) to identify ways to shorten the amount of time it typically takes to deliver highway construction projects from conception to completion, which now takes 13 years on average. AGC has been asked to have members participate on one of the panels created to develop recommendations. The Accelerated Project Delivery task force is looking at impediments to project completion following the official "record of decision" point, which happens at the conclusion of the environmental review, public comment and planning stage. Bob Lanham (Williams Brothers Construction), Scott Williams (Hamilton Construction) and Brian Kaub (Granite Construction) represent AGC on the task force and participated in the initial meetings on January 14-15. The group identified a variety of issues that impact design and construction and will formulate recommendations for improvement. A separate task force will look at steps in the environmental/planning phase that can be taken to reduce time for project approval.

Highway and Transportation Division Chair Don Weaver (Weaver-Bailey Constructors) represented AGC at a meeting on January 26 of an FHWA Accelerating Technology Deployment team. The team, also part of the Every Day Counts initiative, identified a list of promising technologies that have the potential for improving highway project delivery or functioning. The group looked at a list of 14 technologies and rated the top five to receive emphasis from FHWA to expedite deployment. The five highly rated technologies are: green paving technologies, accelerated bridge construction, adaptive traffic signal control technology, roadway departure prevention and asset management tools.

By a vote of 217-212 the House passed H.R. 2847, “Jobs for Main Street Act of 2010,” legislation intended to stimulate job growth. Included in the bill are funds for various infrastructure investments including $37.3 billion for transportation programs, of which $27.5 billion is for highways (freight and passenger rail and port projects are also eligible for these funds), $8.4 billion is for transit, $500 million is for Airport Improvement Program grants and $800 million for Amtrak fleet modernization. The highway funds will be distributed to states by the same formula that was used to distribute stimulus funds previously provided in the American Recovery and Reinvestment Act (ARRA). States are not required to provide any matching dollars to be eligible to receive these funds. States would be required to have fifty percent of the funds under contract within 90 days or lose the remaining funds (to be redistributed to states that have met this requirement). The second fifty percent must be under contract within one year or be lost to other successful states. This is a far more stringent requirement than ARRA which required funds to be “obligated” rather than under contract. The bill also places new "Buy American" requirements on transportation projects. Many of the other provisions related to the use of ARRA funds are included. These funds are provided on top of funding that comes through the traditional program.

Also included in the bill is an extension of highway and transit program authorization through September 30, 2010 at current levels and provides additional Highway Trust Fund revenue to fund these programs.  Since SAFETEA-LU expired on September 30, 2009 these programs have been extended on a short-term basis at a funding level that is significantly below the FY 2009 authorized level.  H.R. 2847 will increase funding by $10.7 billion, nearly to the FY 2009 authorized level. The bill also includes provisions to stabilize the Highway Trust Fund.  It restores $19.5 billion in interest payments foregone on the HTF’s previous cash balances, and restores authority for HTF balances to receive interest payments in the future.  The bill alters the way in which long-standing fuel tax exemptions provided to state and local governments are accounted for which are projected to increase HTF balances by about $1.7 billion annually, for a total of $9.8 billion over six years. In addition, as with the stimulus dollars, the legislation waives the requirement that states provide matching revenue to receive these funds.

The bill is not expected to be taken up in the Senate until after the first of the year. Until such time, another short term extension is required to ensure that program funding is not cut off, and, therefore, the House also today passed a sixty day authorization and attached it to the Defense Department appropriation bill which the Senate must now approve. (A separate five day extension was also necessary to allow the Senate time to act on the sixty day measure).

AGC wrote to the House in support of the legislation.  

In our ongoing effort to keep the pressure on Congress to enact a six year transportation reauthorization bill with significantly increased funding levels, the Transportation Construction Coalition (TCC) has scheduled December 10, 2009 as "Phone-In to Congress" Day. While Congress is embroiled in other high profile issues Senators and Representatives must be reminded about the need to address the expired highway and transit program authorization. In our visits on Capitol Hill Senators and Representatives report they are not hearing from people at home. They need to hear from you.

TCC would like to bombard Congressional offices with calls from constituents. To do this the following toll free number has been set up to allow you to call directly to the offices of your Senators and Representative: 1-888-448-2782. While email and letters are helpful, phone calls require an individual to answer and to make note of why you are calling.

Please plan to call on December 10 and ask your employees to call as well and make the following points:

•  (Our state) has huge transportation needs that are not being met including deficient bridges, deteriorating pavements, congested roads and safety hazards.
• In addition, the construction industry has an unemployment rate of over 18 percent.
• Without the certainty of a long term authorization bill, with increased funding levels, construction companies and material suppliers in our state will be forced to lay off additional workers.
• Businesses will not invest in new equipment when there is so much uncertainty about the on- going and future construction market.
• Congress must do its job and delay no longer. Pass a six year transportation authorization bill now and provide the revenue necessary to increase funding to address (our state's) short term need for jobs and long term economic growth.

House Transportation and Infrastructure Committee Chairman James Oberstar (D-Minn) and Senate Environment and Public Works Committee Chairman Barbara Boxer (D-Calif) held separate news conferences today to call for the inclusion of increased highway and transit funding as part of jobs legislation currently being discussed in both the House and Senate. The news conferences also included the release of an AASHTO survey of state DOTs that identified 7,497 highway projects valued at $47 billion and 2,091 transit, port, rail and other transportation projects valued at $22 billion that are "ready to go" and could be approved for award within 120 days. The American Public Transportation Association also indicated that its members identified additional projects above the AASHTO transit numbers. Senator Boxer said she is co-chairing a Senate leadership group that is putting together jobs legislation and will push for inclusion of funding at this level. Both Chairman Boxer and Chairman Oberstar quoted AGC's statistics on the dire employment situation in the construction industry with now stands at 18.7 percent with 1.6 million construction jobs lost since January 2008. President Obama will hold a "Jobs Summit" at the White House tomorrow. Former AGC President Doug Pitcock will represent the association and present information about the state of the construction economy and call for infrastructure investment as the best way to quickly create new jobs. Both Chairs also indicated that this jobs funding is being discussed separately from addressing the need to pass legislation to reauthorize surface transportation programs and provide new Highway Trust Fund revenue to support long term increased funding levels.

A bipartisan group of seven Senate Committee Chairs and Ranking Members sent a letter to Majority Leader Harry Reid and Minority Leader Mitch McConnell urging leadership to file cloture to move forward on a 6-month extension of the surface transportation bill to spur job creation and an economic recovery.  A cloture motion is necessary because several Republican senators object to the bill because of  budgetary concerns and will not allow an extension to be considered by the Senate without a cloture vote.   The Senate and the House have been at a standoff concerning how to proceed with reauthorization of the highway and transit programs. Until recently, Senate transportation leaders were supporting an 18-month delay, while the House passed a three month extension with the intent of keeping pressure on for enactment of a six year measure. The Senate leaders now support a six month extension to ensure that the program does not flounder while discussions proceed on a longer term bill. The programs have been operating under the terms of two short term extensions that were included in Continuing Resolutions the second one expires on December 18. The bipartisan letter pointed out that short term extensions mean less money is available for states, and do not provide states the certainty they need to keep crucial transportation projects moving forward.

The letter was signed by Senator Barbara Boxer (D-CA), Chairman of the Committee on Environment and Public Works, Senator James Inhofe (R-OK), Ranking Member, Senator Chris Dodd (D-CT), Chairman of the Committee on Banking, Housing and Urban Affairs, Senator Richard Shelby (R-AL), Ranking Member, Senator John Rockefeller (D-WV), Chairman of the Committee on Commerce, Science and Transportation, Senator Kay Bailey Hutchinson (R-TX), Ranking Member, and Senator Max Baucus (D-MT), Chairman of the Committee on Finance.

The AGC Co-Chaired Transportation Construction Coalition (TCC) continues efforts to urge Congress to work towards enactment of a multi-year transportation bill with significantly increased funding to address the nation's long term and immediate economic problems. The TCC last week released a national survey of transportation contractors that reinforced the many challenges facing the U.S. transportation construction industry and the need for increased federal investment.  TCC organizations are now working on getting state business groups to sign onto a letter that will go to each state's Congressional delegation urging enactment of a well funded long term bill. In addition, a phone-in day is being organized to continue to keep the pressure on the Congress.   

With the October 30^th deadline having arrived on the first thirty day extension of SAFETEA-LU authorization and no action on separate extension legislation, the House and the Senate included language in the Continuing Resolution needed to fund most of the Federal government to continue highway and transit program spending authorization until December 18, 2009. The Senate Environment and Public Works Committee bipartisan leadership had hoped to enact a six month extension of the program and to address in that bill the $8.7 billion rescission of contract authority that went into effect on September 30. However, objections from two republican Senators prevented the bill from coming to the Senate floor. Both Americans for Transportation Mobility (ATM) and the Transportation Construction Coalition (TCC) contacted Senators supporting enactment of the six month extension but also urging that the Senate use this time to continue working on a six year bill with increased transportation investment. The House has already passed a three month extension also with the intent of continuing to work on the long term bill.

In an effort to keep the pressure on Congress to complete action on the reauthorization bill soon the Association of Equipment Manufacturers (AEM) and the Associated Equipment Distributors (AED) have initiated the “Start Us Up USA” campaign. This week AEM and AED organized an event on the Washington mall which included a caravan of construction equipment to bring attention to the dire employment conditions in the construction industry and specifically the equipment manufacturer segment. House Transportation & Infrastructure Committee (T&I) Chairman James Oberstar (D-Minn.) addressed the crowd calling for a multi-year reauthorization bill that puts Americans back to work.