President signs off on repealing $7.6 billion highway cut

The repealing of a $7.6 billion rescission to highway funding will create more certainty for states and cities to move forward with bonding and future projects.

Just as the clock was about to run out on a previous funding measure, the Senate approved a month-long stopgap continuing resolution Thursday that includes the repeal of the rescission. It was signed into law by President Donald Trump Thursday night.

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Donald Trump, 2016 Republican presidential nominee, speaks during a campaign rally in Hershey, Pennsylvania, U.S., on Friday, Nov. 4, 2016. As the U.S. presidential race heads into its final weekend, Trump is showing strength in Iowa and Ohio pre-Election Day voting, while Hillary Clintons advantage in early balloting looks stronger in North Carolina and Nevada. Photographer: Andrew Harrer/Bloomberg

“If it had been enacted, it (the rescission) would have created some real cuts in terms of the federal funding, which would then affect the ability of state and localities to use those funds to leverage their own funds whether it be through municipal bonds or their other funding mechanisms,” said Ward McCarragher, vice president of government affairs and advocacy at the American Public Transportation Association.

The Senate voted 74-20 to repeal the section of the Fixing America’s Surface Transportation Act that includes the funding cut. The CR would keep federal agencies operating through Dec. 20 of this year.

“Repealing the highway rescission today was an absolute must,” said Sen. Shelley Moore Capito, R- W. Va, in a press release. “Failure to do so would have resulted in clawing back millions of dollars that states have already contracted out for highway infrastructure projects.”

The rescission was included in the FAST Act, which expires Sept. 30, 2020, for budgetary reasons with the intent to reset the budgetary baseline for highway programs to fiscal year 2015 levels. The cuts would have taken effect on July 1, 2020. The FAST Act was passed in 2015.

“It creates more certainty in terms of surface transportation funding and it takes away something that has been hanging over the program since 2015 as to whether this rescission would occur in 2020,” McCarragher said.

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Ward McCarragher, vice president of government affairs and advocacy at the American Public Transportation Association

The passing of the CR also creates greater certainty until at least December for states and cities looking to invest in projects and bonding, McCarragher said.

The rescission removes the threat of disruption and potential delays in the coming construction season, said Jim Tymon, executive director at American Association of Highway and Transportation Officials in a press release.

“The resolution of this issue comes at a time when states are preparing their budgets for the coming construction season, eliminating potential uncertainty that could have delayed important transportation infrastructure investments,” Tymon said.

The rescission could have resulted in hard cuts to highway funding and potentially delay project construction since states would have lost the flexibility to apply their federal funding, AASHTO has said.

“The National League of Cities is calling on Congress to be a more consistent funding partner,” said Brittney Kohler, NLC legislative director.

NLC recently passed a resolution Wednesday that is going to its board Saturday for a vote, calling on the federal government to be a funding partner.

“Canceling the rescission is just one step,” Kohler said. “The Highway Trust Fund needs their consistency as well and as cities, we understand quite clearly that when there’s inconsistency and interruption in planned distribution of funds, it creates additional cost burdens.”

The Highway Trust Fund is running on fumes because the federal gas tax hasn’t been raised since 1993.

Inconsistencies in funding will cost cities and states more and affect their bonding habits, Kohler said. The construction costs continue to rise, making it more expensive the longer states and cities wait for funding.

“We want to thank Congress for fixing the rescission in the continuing resolution, however we want them to be aware of the passed down costs of the Highway Trust Fund uncertainty,” Kohler said

The House voted earlier this week on the CR, passing it 231-192 mostly along party lines. Some lawmakers opposed repealing the rescission because they believed it was fiscally irresponsible to do so, while others said they opposed passing more temporary spending bills and wanted to pass longer-term legislation.

Some senators were disappointed in the Senate’s passing of the CR, though they still voted to push it through.

This is the second time they have had to pass a CR, said Vice-Chairman of the Senate Appropriations Committee Patrick Leahy, D-Vt., in a statement. The first CR passed on Sept. 27 and Congress does not yet have a budget for fiscal year 2020.

“I wish we were further along with our work,” Leahy said. “It is not for a lack of trying. It is no secret what is holding up negotiations—the President’s demand for $8.6 billion more for his vanity wall along the southern border.”

The U.S. Chamber of Commerce also commented on the rescission’s repeal, urging Congress to continue their efforts to address infrastructure.

“We applaud the House and Senate for preventing a $7.6 billion reduction in federal highway funding, ensuring states won’t encounter disruptions to their important infrastructure projects, road improvements, and maintenance,” Neil Bradley, Chamber vice president and chief policy officer said in a statement.

State and local officials are still waiting for a long-term infrastructure bill. The Senate Environment and Public Works Committee approved the America’s Transportation Infrastructure Act of 2019, in July. It would authorize $287 billion in federal surface transportation funding over five years.

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