What Lies Ahead on Infrastructure?
With the appropriations battle finally resolved for the remainder of the fiscal year (that’s 221 days of breathing room, for anyone counting), attention might finally turn to what Congress can accomplish on infrastructure. A few thoughts and observations in this regard:
- Timing is key. To have a chance, Congress would need to introduce bills by spring and pass them by the end of 2019, at the very latest. To avoid the crazy season of a presidential election year, the end of September would be a preferable target.
- Infrastructure Package vs. Transportation Reauthorization. A broad infrastructure package has allure for members in both chambers, but a broader funding package means more committees and stakeholders are involved. For this reason, recent talk is that the biggest effort may be to pass transportation reauthorization by the end of the year with some infrastructure sweeteners included (broadband is one we could envision) to expand the base of support for such an effort. It seems unlikely that Congress will do an infrastructure package AND a reauthorization in such close succession. And the probability is extremely low that a reauthorization gets done next year anyway (the current program expires on September 30, 2020), with the election in full bloom by then. Then we would be back to long-term extensions, which is not a popular idea.
- Gas Tax Increase? There is some hope Congress will increase the gas tax this year, either as part of an infrastructure package or a reauthorization. The odds don’t favor it happening, but a properly calibrated bill might pass. Sweeteners (mentioned above) and earmarks (mentioned below) could play a role in making a tough vote a little easier.
- Earmarks. Congressionally directed spending. Article 1 authorized spending. Call it what you like, restoring Congress’ ability to earmark small portions of spending bills is a hot topic again in Washington, with support from members on both sides of the aisle. There is wide agreement that earmarks would increase the chance of passage of an infrastructure bill (especially if it includes a gas tax increase) by giving Members of Congress some cover back home for a tough vote.
The big news last week was the agreement on remaining appropriations bills. Now that the bill has been signed, here is a quick overview of relevant sections.
- The bill fully funds FAST Act authorized levels for the second year in a row.
- The bill contains discretionary supplementary funding, which is used to plus-up Trust Fund programs with general funds. This is the result of a two-year budget agreement before last year’s appropriations process. The total of this supplementary funding increased slightly from last year ($4.36B to $4.45B) but is being distributed quite differently.
- The biggest winners are the Surface Transportation Block Grant Program (STBGP), which receives an additional $2.73 billion above the fully funded FAST Act levels (last year’s supplemental for STBGP was $1.98B); and Bridge Replacement Grants which receives $475M this year (after getting $225M last year).
- The biggest losers are Airport Improvement Program discretionary grants ($500M less than last year); Significant Federal and Tribal Lands ($275M less); and Transit Formula Grants for State of Good Repair ($137M less) and Buses ($50M less).
- The BUILD discretionary grant program (formerly TIGER) gets $600M less than last year, but last year was a high-water mark. The $900M committed to BUILD grants this year is still well above previous years, where funded amounts ranged from $474M to $600M.