State DOTs impatient as Congress preps new short-term spending bill

The House was poised to vote Tuesday on a three-week extension of government funding to buy more time to negotiate the full-year budget, which is required to allow new infrastructure dollars to flow to states and local governments.

“We’re still optimistic,” said Susan Howard, program director for transportation finance at the American Association of Highway and Transportation Officials, which represents state departments of transportation.

“It’s a good sign they haven’t pulled the trigger on a full-year continuing resolution,” Howard said, adding that would be the worst-case scenario for state DOTs.

Bloomberg News

Government funding will expire on Feb. 18 under the current continuing resolution. The new CR – which will be the third since the federal fiscal year began Oct. 1 – extends funding through March 11.

The CRs freeze spending levels at FY21 levels, which means much of the funding in the $1.2 trillion Infrastructure Investment and Jobs Act can't be sent to the states.

“We are close to reaching a framework government funding agreement, but we will need additional time to complete the legislation in full,” House Appropriations Chair Rosa DeLauro said Tuesday in a statement.

Once the CR passes the House, the Senate will take it up “quickly and in time before the Feb. 18 deadline,” Senate Majority Leader Chuck Schumer told reporters Tuesday. The two parties would then need to agree on final FY22 spending figures for the defense and non-defense budgets, resolve policy differences and pass 12 appropriation bills.

AASHTO was one of 60 public and private transportation organizations that urged Congress in a Jan. 24 letter to pass a full-year budget.

“[A] delay of almost six months since the beginning of FY 2022 in providing the much-touted funding increases from the IIJA is wholly unacceptable and will cause significant project disruptions, reduced construction and manufacturing employment, and delays in delivering critical transportation infrastructure improvements—just when Americans were promised the most ambitious infrastructure package of our time,” the letter said.

The longer it takes to hammer out a budget, the harder it becomes for states to plan infrastructure projects. “We’re not talking about pushing any projects back yet,” Howard said. But "by the time spring rolls around you have to be a little concerned about keeping those projects on track.”

Some IIJA new programs are funded already through a separate, direct appropriation, and that money will flow independent of the larger appropriations debate in Congress. But many programs, including those funded through the Highway Trust Fund, need a new appropriation bill to unlock the dollars.

Howard estimates $40 billion of the funding is bottled up by the lack of a FY22 budget.

If lawmakers are unable to reach a deal, the organizations will ask for an exemption to the CR that would allow the IIJA funds to flow.

Democrats and Republicans are reportedly close to a deal. The dispute hinges over the spending levels on the defense and non-defense budgets. The Biden Administration may also add a supplemental request for additional pandemic relief.

“We’re close,” Senate Appropriations ranking member Richard Shelby told reporters Tuesday.