ATM Members Kavinoky, Yaksich to Congress: Short-Term Extensions Hurt Everyone, Everywhere

Article reprinted with permission from AASHTO Journal

Business, State Leaders Spell Out Stark Impact of Short-term Extensions

May 08, 2015

Business groups and state officials pressed Congress early this month to enact a long-term highway and public transit bill before the Highway Trust Fund’s program authority expires May 31, while leading senators said they will need to pass a short-term extension by then.

Nick Yaksich, vice president for government and industry relations at the Association of Equipment Manufacturerstold a Senate Commerce subcommittee hearing May 5 that Congress should “break the cycle of patchwork fixes” to the trust fund “and meaningfully provide a longer-term fix.”

Yaksich said short-term extensions hurt manufacturers in the construction equipment industry by disrupting the flow of infrastructure projects while “congested and pothole-stricken roads slow the pace of commerce” across the U.S. supply chain.

And, said Yaksich, “the continued cycle of short-term fixes has sapped most state departments of transportation of their ability to plan most major, long-term capital investment projects.”

Utah State Sen. Curt Bramble told the panel that the Utah DOT currently has a hold on 25 highway paving projects valued at $65 million waiting beyond normal bid-letting schedules to see what funding Congress will allocate for the rest of that state’s short construction season.

Janet Kavinoky, executive director of transportation and infrastructure at the U.S. Chamber of Commerce, said that “by May 31 Congress should pass a long-term, fully funded bill.” If not, she said, “the alternative is to begin the pattern of extensions and revenue patches all over again. That pattern leads to slowed or cancelled [bid] lettings, project delays, cost increases and uncertainty that negatively affect business outlooks.”

Despite that late push, some House leaders have already said they expect to unveil a short extension around mid-May that would probably extend the trust fund through December at a cost of about $10-$11 billion to maintain current funding levels. Some have said they hope that will give Congress enough time to negotiate a major tax reform package that could include enough new revenue to pay for a five- or six-year highway bill.

Sen. Deb Fischer, R-Neb., who chairs the Commerce Surface Transportation panel, flatly told that same May 5 hearing: “A short-term extension is highly likely.”

And Senate Majority Leader Mitch McConnell, R-Ky., said, “We clearly have to do an extensions on highways” among the task Congress must complete before leaving after the third week of May for an extended Memorial Day break.

Separately, Senate Environment and Public Works Chairman James Inhofe, R-Okla., said EPW is close to completing its draft of a long-term bill. Politico reported Inhofe continued to try to build support for a shorter extension of trust fund authority to July in order to force Congress to act on long-term funding when the trust fund accounts are expected to run low.

The Transportation Construction Coalition also urged Congress to consider only a limited extension, and toughen it with specific dates for delivering a major bill.

That group of road builders, labor organizations, and equipment or material suppliers said in a May 6 letter to congressional leaders “the next surface transportation extension should be of limited duration and include an explicit timeline detailing when the tax committees and the full Congress will act.”

The TCC said the most recent extension to May 31 has already disrupted the 2015 construction season in many states, but a long-term bill could “stabilize and grow highway and transit investment.”

But until a long-term measure becomes law, the TCC said, “this long-term cycle of uncertainty and piecemeal management undermines the ability of state transportation departments to implement multi-year transportation plans, and discourages the private sector from making investments in new capital and personnel.”

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