The House voted Tuesday to provide funding for highway and transit projects through approximately May 2015 in response to a looming shortfall in the Highway Trust Fund. Without action, many transportation construction projects around the country would come to a halt beginning August 1 because federal funding for the states to pay workers and purchase supplies will be cut by nearly a third.
The bill received bipartisan approval, with a vote of 367 to 55. Backers included 186 Democrats and 181 Republicans, while 10 Democrats and 45 Republicans opposed it. The bill, which President Obama has indicated he will sign if passed by Congress, now moves to the Senate for consideration.
The Highway Trust Fund is the main source of federal funding for repair and construction of roads, bridges, and mass transit. Current projections indicate that the fund will be become insolvent by the end of next month. The bill provides additional funds to sustain HTF spending, which would otherwise be cut by 28 percent on August 1, threatening up to 700,000 jobs.
The bill approves a $10.8 billion transfer to the Highway Trust Fund, to be paid for using customs fees, pension smoothing, and excess money from a fund to repair leaking underground fuel storage tanks.
While the bill passed this week averts the immediate transportation funding crisis, long-term funding for federal transportation projects remains in jeopardy. Adding to the uncertainty, Congress has failed to pass the standard surface transportation spending authorization legislation in recent years, and since 2009, has instead passed nine short-term bills. The uncertainty has caused many states to delay the start of new projects.
The House plan averts an immediate crisis, but business and community leaders from around the country continue to urge federal officials to develop a long-term funding plan that gives states and localities the certainty they need to make longer-term investments.
Business Forward will continue to keep you informed with new developments on this issue. Learn more about the crisis in transportation funding here.