House and Senate conferees came to a formal agreement on the FY 2010 Congressional budget resolution yesterday after negotiating a number of contentious provisions. The agreement adopts the more favorable House projections on available budgetary baseline for the highway and transit programs. This is an important initial step in the SAFETEA-LU reauthorization effort. The budget resolution sets the parameters governing spending decisions by Congress this year. It has particular impact on the highway and transit programs because SAFETEA-LU expires on September 30, 2009 and the amount of funding that can be included in the SAFETEA-LU reauthorization legislation is impacted by the budget resolution. Other provisions in the resolution are favorable to transportation as well, including a reserve fund provision allowing for additional highway and transit funding above the amount set in the resolution if new legislation is enacted that provides additional revenue. A proposal from the Obama Administration to use the resolution to change the budget treatment of the Highway Trust Fund was rejected. Final action on the compromise resolution is expected in both the House and Senate by the end of the week. AGC and our coalition partners - the Transportation Construction Coalition (TCC) and Americans for Transportation Mobility (ATM) -were in contact with House and Senate budget Committee members as well as other Senators and Representatives urging support of the House language.

Conferees are expected to meet on Monday to negotiate final compromises on the differences between the House and Senate versions of the Fiscal Year 2010 Congressional budget resolution. House and Senate consideration of the final measure is expected as early as Wednesday. The budget resolution sets the parameters governing spending decisions by Congress this year. It has particular impact on the highway and transit programs because SAFETEA-LU, the authorization for these programs, expires on September 30, 2009. The amount of funding that can be included in the SAFETEA-LU reauthorization legislation is impacted by the budget resolution.  The Senate version contains an artificially and substantially lower spending level for highway programs than the House and, if included in the compromise, will significantly undermine the ability of Congress to enact reauthorization legislation at an increased level.

House Transportation and Infrastructure Committee Chairman Jim Oberstar (D-MN) and Highway Subcommittee Chairman Peter DeFazio (D-OR) called on AGC and other transportation groups to unite in supporting the House version of the budget resolution. Both called this action, "The beginning of the fight for a well funded transportation authorization bill," and pointed out that, "The game is over if we lose this battle."  AGC and our coalition partners - Transportation Construction Coalition (TCC) and Americans for Transportation Mobility (ATM) - have written to and are contacting House and Senate budget Committee members as well as other Senators and Representatives in support of the House language.

Other provisions in the resolution are favorable to transportation, including a reserve fund provision allowing for additional highway and transit funding if new legislation is enacted that provides additional revenue. A proposal from the Obama Administration to use the resolution to change the budget treatment of the Highway Trust Fund was rejected.

AASHTO today released its "Bottom Line" report which spells out highway and transit investment requirements over the next six years. The report says that by 2015, governments at all levels will need to more than double their spending on highways and bridges to keep up with increased traffic, freight congestion, the demands of aging highways and bridges, and the growth of the nation's population. Transit spending would need to quadruple to serve increased ridership.

The report points out that federal, state and local governments spent $79 billion on highways and bridges in 2006 and that investment of $166 billion per year is required if the number of miles driven increases at an expected rate of 1.4 percent a year. If transit ridership grows annually by its current 3.5 percent rate, the report indicates an annual investment of $59 billion will be necessary compared to the $13.3 billion investment level in 2006.

House Transportation and Infrastructure (T&I) Committee Chairman Jim Oberstar participated in the release of the report. He said that drafting of a new reauthorization bill is moving along and that he fully intends to have the bill reported out of the T&I Committee by the end of May. He indicated that floor time has been set aside the first week in June to consider the bill. The chairman said he does not support temporary extensions of the program past the September 30 deadline.

At a news conference at US Department of Transportation headquarters today President Obama, joined by Vice President Joe Biden and Transportation Secretary Ray LaHood announced that funding has been obligated for  2000 transportation projects, totaling over $6 billion with money provided in the American Recovery and Reinvestment Act (ARRA) economic stimulus legislation. "Just 41 days ago we announced funding for the first transportation project under ARRA and today we're approving the 2,000th project," said President Obama.  "I am proud to utter the two rarest phrases in the English language - projects are being approved ahead of schedule, and they are coming in under budget." State departments of transportation around the country have reported to FHWA intense competition by contractors for ARRA projects.  Bids have been roughly 15 to 20 percent lower on average, and as much as 30 percent below the engineers estimate in some cases. Only seven states have not obligated funds at this point.

The ARRA legislation requires states to obligate 50 percent of these transportation funds within 120 days of apportionment, which occurred on March 2, 2009. States that do not obligate 50 percent of their transportation funds by June 30 will lose those funds to states that have met the deadline.  The over $6 billion obligated thus far is approximately 60 percent of the amount covered in this first deadline.

The US DOT has issued a series of proposed rule changes to its disadvantaged business enterprise (DBE) regulations. The proposed changes are the result of meetings initiated by AGC to discuss DBE program implementation. The proposed rules deal with: concerns counting items obtained by a DBE subcontractor from its prime contractor, "unbundling" of contracts, improvements to DBE application form, program oversight, DBE certification in multiple states, discretion of prime to terminate DBE participation, setting goals every three years instead of annually. Comments on the proposed rule are due by July 7, 2009.  AGC will have its comments available for your review in time to submit your own comments on the proposed rules.

Workers at DC National Work Zone Awareness Week event

This year marked the tenth anniversary of National Work Zone Awareness Week. As part of the activities, AGC once again participated in the national media event intended to alert the driving public about the dangers for both construction workers and motorists when highway infrastructure repairs are underway. Mike Hart, Mid Atlantic regional manager for Cianbro Corporation and an active member of AGC of America's Highway and Transportation Division leadership represented AGC at the event. The venue for the event was a bridge reconstruction project just across the Potomac River from Washington on the George Washington Parkway. Cianbro is the contractor doing the work and, as part of the event, Mike Hart took media representatives on a tour of the project pointing out the various safety features implemented to protect workers and motorists. Each year there are nearly 1000 fatalities in work zones. FHWA pointed out that the increase in highway construction expected as a result of the American Recovery and Reinvestment Act (stimulus funding) will also increase exposure to work zones and urged more vigilance by drivers when these work areas are encountered. AGC chapters around the country cooperated with their state DOTs in conducting similar awareness events.

The House and Senate have completed action on their versions of the FY 2010 budget resolution, a non-binding blueprint that guides Congressional tax and spending decisions for the upcoming fiscal year. A conference committee will work out the differences in the two resolutions when Congress returns from its two week spring recess but this document does not go to the President for his approval.

Both resolutions include funding for the highway and transit programs at the FY 2009 level. Since SAFETEA-LU expires at the end of FY 2009 and with the Highway Trust Fund projected to have an insufficient balance to maintain current funding levels, new legislation is necessary. Both resolutions take this uncertainty into account by providing room in the budget for increased spending if subsequent legislation provides necessary revenue. Both resolutions reject the Administration's proposal to change the budgetary treatment of Highway Trust Fund which would have eliminated the accounting mechanism that allows the federal government to provide states with muti-year budget authority for their highway and transit programs. AGC contacted both House and Senate Budget committees opposing this provision, pointing out how this would undermine states' ability to plan their long term transportation construction programs.

The White House announced that President Obama will nominate Victor Mendez to serve as the next Administrator of the Federal Highway Administration. Mr. Mendez was a member of former Arizona Governor Janet Napolitano's Cabinet serving as the Director of the Arizona Department of Transportation. He joined ADOT in 1985 and was named director in 2001. Mendez served as AASHTO's National President in 2007 and, in 2008, was selected as Leader of the Year in Public Policy in Transportation by the Arizona Capitol Times. Both AGC of America and the Arizona Chapter AGC have a longstanding excellent working relationship with Mr. Mendez. He served as an AASHTO delegate to the AASHTO-AGC-ARTBA Joint Committee and has addressed AGC's Highway and Transportation Division on numerous occasions.