In early December, 2015, mere days before transportation spending was set to expire, the House voted 359 to 65 and the Senate voted 83 to 16 to provide $305 billion to repair and expand highways, bridges and transit during the next five years.
The signing by the President ended a string of temporary funding fixes for the department, dating back to 2005. Over the past several months following the release of the transportation bill, people have been asking, what exactly is in this bill? To answer in simple terms, quite a lot!
Funding the Transportation Act
The 1,300-page bill, known as the “Fixing America’s Surface Transportation Act” or “FAST Act” will be paid for with gas tax revenue (18.4 cents per gallon – no change in the rate) and a package of $70 billion in offsets from other areas of the federal budget. This additional $70 billion will come from changes in custom fees, dividends on Federal Reserve funds and several other areas.
Traditionally the gas tax has been the source for transportation funding. As cars have become more efficient and gas taxes have remained unchanged since 1993, the government need for project funding is significantly outpacing the revenue coming in from gas taxes. In order to make this bill a reality without increased taxes, it was necessary to allocate funding from other sources in order to make this bill a reality.
So how is the funding broken down over the next 5 years in the current bill? Below you will find several of the key programs and federal agencies that are included in the bill:
Federal-Aid Highway Program:
- $39,727,500,000 for fiscal year 2016
- $40,547,805,000 for fiscal year 2017
- $41,424,020,075 for fiscal year 2018
- $42,358,903,696 for fiscal year 2019
- $43,373,294,311 for fiscal year 2020
Transportation Infrastructure Finance and Innovation Program:
- $275,000,000 for fiscal year 2016
- $275,000,000 for fiscal year 2017
- $285,000,000 for fiscal year 2018
- $300,000,000 for fiscal year 2019
- $300,000,000 for fiscal year 2020
Tribal Transportation Program:
- $465,000,000 for fiscal year 2016
- $475,000,000 for fiscal year 2017
- $485,000,000 for fiscal year 2018
- $495,000,000 for fiscal year 2019
- $505,000,000 for fiscal year 2020
Federal Lands Transportation Program:
- $335,000,000 for fiscal year 2016
- $345,000,000 for fiscal year 2017
- $355,000,000 for fiscal year 2018
- $365,000,000 for fiscal year 2019
- $375,000,000 for fiscal year 2020
National Park Service:
- $268,000,000 for fiscal year 2016
- $276,000,000 for fiscal year 2017
- $284,000,000 for fiscal year 2018
- $292,000,000 for fiscal year 2019
- $300,000,000 for fiscal year 2020
United States Fish and Wildlife Service:
- $30,000,000 for each of fiscal years 2016 through 2020
United States Forest Service:
- $15,000,000 for fiscal year 2016
- $16,000,000 for fiscal year 2017
- $17,000,000 for fiscal year 2018
- $18,000,000 for fiscal year 2019
- $19,000,000 for fiscal year 2020
Territorial and Puerto Rico Highway Program:
- $200,000,000 for each of fiscal years 2016 through 2020.
Nationally Significant Freights and Highway Projects:
- $800,000,000 for fiscal year 2016
- $850,000,000 for fiscal year 2017
- $900,000,000 for fiscal year 2018
- $950,000,000 for fiscal year 2019
- $1,000,000,000 for fiscal year 2020
Additional areas that will be funded which are not included above include transportation safety programs, administrative costs to manage the program, border enforcement grants, new entrant audits, commercial vehicle information systems and networks deployment, training and education, intelligent transportation systems program, university transportation centers program, transportation statistics and others.
It’s important to note that while the majority of the funding will be used for construction projects, there are many areas that will receive funding that are not construction related. We often see these large numbers associated with transportation and seem to think it’s all going directly to the construction industry. This is not the case for this bill.
Concerns with the Transportation Bill
As can be seen in the funding numbers, the sums are significant. While the passing of the bill was a great achievement and adds certainty of a 5-year bill for our cities and states, it seems again we are moving money from one “pot” to another to fund this bill. We have funding for now, but where will the money come from in 5 years? As a nation, we will be dealing with how to fund this bill again in another 5 years.
And how will these projects be prioritized, selected and managed? It appears from the bill no changes in accountability have been addressed. A system that is very political and often inefficient has been sustained. It will take all of us in the construction industry to ensure that the American tax payers' dollars are appropriately spent and managed on projects that have the most benefit to the public.
Further Analysis of the FAST Act
Over the next few months we will layout what is in the funding figures in the bill, provide some framework to terms such as “National Priority Project,” discuss concerns for the future and administration of the bill, and how the bill impacts the construction industry.
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