Notes about highway funding

In its Q1-2014 Construction Outlook Report, FMI forecasts a modest 1 percent increase in highway and street construction for 2014 to $82.2 billion. The company says, “Public-private-partnerships still hold out hope for projects that can generate revenue from usage fees, but funding from more private investors will not approach the needed amount of infrastructure the country needs to make.”

FMI notes these facts:
• President Obama’s 2015 budget calls for “$199 billion over four years to continue critical investments in highways and includes the creation of a new freight program as well as a new “Fix-it-First” program, which is aimed at repairing structurally deficient bridges.
• According to the American Road & Transportation Builders Association, “Taking into account changes in wages, materials and inflation, state and local governments awarded $54.3 billion in real highway and bridge contracts between February 2012 and January 2013, compared to $55.8 billion in the same 2011-2012 time period.”
• State budgets will continue to be strained, and it will be difficult to get larger projects off the ground owing to uncertainty of long-term government funding and highway program renewal.
• The American Council of Engineering Companies reports that, “According to the Congressional Budget Office, the balance of the Highway Trust Fund (HTF) will be depleted in fiscal year 2015, necessitating dramatic cuts in highway and transit spending unless new revenues are provided. Absent congressional action, highway program funding would fall from $40 billion to approximately $4 billion, while funding for transit projects would fall from $11 billion to $7 billion.”

More recent estimates from the U.S. Department of Transportation suggest the HTF could actually run out of money by this September. With the current highway bill, MAP-21, expiring in September, Congress will certainly need to address highway funding this year — one way or another.