DALLAS — Highway contracts awarded by state and local governments in the first half of 2014 are down nearly 14% from 2013 as uncertainty grows over continued federal transportation funding, according to the construction trade group, America Road and Transportation Builders Association.
The contract volume for highway and bridge work fell to $29.8 billion between January and June from $34.6 billion in the first six months of 2013, ARBTA said, based on information provided by McGraw-Hill. The totals are adjusted for inflation and material costs.
ARTBA said the slowdown is the result of the uneasiness felt by state transportation departments about whether federal highway funding can be counted on in fiscal 2015 and beyond.
"The latest data indicates that the slowdown we have seen throughout 2014 is continuing into the summer construction season, when state and local governments put out most of their awards," ARTBA said. "It is likely that this pullback is in part due to the uncertainty surrounding the federal aid program and the Highway Trust Fund."
Contract awards were down in 25 states and up in 21 states and the District of Columbia, ARTBA said.
The uncertainty over federal funding could be alleviated Tuesday evening when the Senate is expected to vote on a 10-month, $10.8 billion fix for the Highway Trust Fund approved in mid-July by the House.
Without an extension this week, the highway fund would dip to a cash balance of $4 billion on Friday. When that happens, federal reimbursements to states for on-going highway projects would be curtailed 28% and provided only twice a month instead of daily.
The cash balance in the HTF was $6.5 billion on June 27.
An extension must be passed by Congress this week as lawmakers are scheduled to leave Aug. 2 for a five-week recess.
The House measure, HR 5021, would transfer $9.8 billion of general fund revenues and $1 billion from a leaking storage tank fund to keep the HTF solvent through May 31, 2015 at current spending levels. The general fund revenues would include $6.4 billion from pension smoothing and $3.5 billion from customs user fees.
The bill would also renew until then the current transportation bill that would otherwise expire Sept. 30, the end of fiscal 2014.
The Senate plans to consider adding several amendments to the House bill, including one that would replace the entire House proposal with a similar one adopted July 10 by the Senate Finance Committee.
That version, sponsored by committee chairman Sen. Ron Wyden, D-Ore., would provide the same $10.8 billion as the House option, but does not include a specific deadline.
Wyden's proposal would offset the general fund transfer with $2.7 billion from pension smoothing, $2.9 billion from extended customs user fees, and $4.2 billion from enhanced compliance of existing tax laws.
Other amendments scheduled for Senate debate include a proposal from Sen. Mike Lee, R-Utah to reduce the federal gasoline tax to 3.7 cents per gallon from the current 18.4 cents and turn transportation funding over to the states.
Sens. Barbara Boxer, D-Calif., Thomas Caper, D-Del., and Bob Corker, R-Tenn., will offer an amendment to strip the pension smoothing revenue and provide a total of only $8 billion for the extension. That would be enough money to patch the HTF until Dec. 31 and give lawmakers enough time to develop a long-term, fully-funded transportation bill, the trio said.
But House Speaker John Boehner, R-Ohio warned Tuesday that if the Senate replaces the House revenue plan with its own proposal, the House will reject the new language and send the bill back to the Senate.
No new projects could be funded from the Highway Trust Fund in fiscal 2015, the Congressional Budget Office said earlier this year, unless Congress approves a multi-billion dollar transfer from the general fund or finds a new source of revenue.
