State DOTs ask Congress for $50 billion to offset coronavirus effects

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The American Association of State Highway and Transportation Officials asked congressional leaders for $50 billion to offset revenue loss due to the coronavirus and are urging lawmakers to pass a surface transportation reauthorization bill soon.

In a letter sent Monday, the transportation group asked lawmakers to take those two steps in the coming weeks and months through both a new COVID-19 support package and a following surface transportation bill. The group said $50 billion would provide states the ability to meet existing debt obligations.

“These actions to shore up our nation’s highway, transit, passenger rail, and water transportation systems will send a bold signal to raise consumer and investor confidence and expectations for economic recovery, while strengthening our national transportation system for decades to come,” wrote Patrick McKenna, AASHTO president and Jim Tymon, AASHTO executive director.

Patrick McKenna of the American Association of State Highway and Transportation Officials, asked lawmakers for $50 billion in flexible funding.

AASHTO asked for $49.95 billion in flexible funding to states’ departments of transportation to offset at least a 30% loss in state transportation revenues in the next 18 months. They asked for the funds to be available through Sept. 30, 2021.

Data from analytics company INRIX shows that personal travel dropped between 38% and 44% nationally through the week ending March 27 and may worsen.

That means a revenue drop for states in a combination of gas taxes, sales taxes on gasoline, and other sources. Federal money would help states pay their debt service, said Susan Howard, AASHTO program director for transportation finance.

“You want to have as much flexibility as possible to apply whatever kind of funding states have for its debt service,” Howard said. “If the revenue on stateside is slower coming in then that might impact how states are able to meet their debt service.”

Of the $49.95 billion, AASHTO asked for $16.7 billion for the remainder of fiscal year 2020 and $33.3 billion for fiscal year 2021. That backstop would be essentially treated as state revenues that would have otherwise been collected for state DOT activities without the pandemic, AASHTO said.

AASHTO asked for 100% federal share, meaning that states would not have to match the fiunds to be eligible. The group said revenue cuts due to the virus threaten the ability to provide state and local matches.

AASHTO also believes that Congress should pass a “major transportation investment package” in the form of surface transportation and water transportation reauthorization to boost economic recovery once the pandemic subsides. The existing Fixing America’s Surface Transportation Act will expire in six months. The Highway Trust Fund that supports federal roadways has been low on money for years since it’s funded through gas taxes, and the pandemic has exacerbated that problem.

Decades of underinvestment in infrastructure has resulted in a $902 billion project backlog as of 2014, the most recent U.S. DOT estimate. To address that backlog, AASHTO wants lawmakers to double the amount of federal surface transportation funding and reauthorize the FAST Act and Water Resources Development Act for at least another six years.

The Senate proposed The America’s Transportation Infrastructure Act last summer, a five-year surface transportation reauthorization. AASHTO is not necessarily endorsing the Senate bill specifically, Howard said.

Lawmakers have discussed including infrastructure legislation in a future stimulus bill, but have recently taken a turn.

Speaker Nancy Pelosi indicated on Friday that she will postpone infrastructure legislation in an upcoming second version of the Coronavirus Aid, Relief, and Economic Securities Act. She made that announcement days after highlighting a $760 billion, 5-year plan for rebuilding infrastructure, which was originally introduced in January by House Democrats.

United For Infrastructure announced Tuesday its postponment of its signature "Infrastructure Week" to September 14-21, 2020. The highlighted week is usually held in May, but was postponed due to COVID-19.
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Coronavirus Washington DC Infrastructure AASHTO State and local finance Transportation industry
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