May 18, 2020
State DOTs Would Get $15B In Phase 4 COVID-19 Bill
The “Health and Economic Recovery Omnibus Emergency Solutions” or “HEROES” Act is a $3 trillion COVID-19 relief measure proposed by the House of Representatives on May 12. The proposed “Phase 4” COVID-19 bill contains $15 billion in stopgap funds for state departments of transportation.
This is well below the $50 billion the American Association of State Highway and Transportation Officials projects state DOTs will need to continue operations as they face “drastic falloffs in motor fuel tax revenues, toll road receipts, and other funding sources.”
According to AASHTO’s analysis of the “Phase 4” relief bill, “state DOTs would receive $14.775 billion distributed by formula funding, with tribal DOTs getting $150 million, Puerto Rico getting $60 million, and territorial DOTs receiving $15 million,” AASHTO’s article states. “Additionally, HEROES Act funds would be subject to Surface Transportation Block Grant Program or STBGP eligibilities and be provided at 100 percent federal share, with those funds allowed to cover operational, maintenance, and administrative expenses, including payroll needs.”
The HEROES Act would also provide remaining fiscal year 2020 Federal-aid Highway formula dollars from the Fixing America’s Surface Transportation or FAST Act at 100 percent federal share, as well as allow those funds to be used to cover operational, maintenance, and administrative expenses, including payroll.
“We want to thank House leadership for acknowledging the challenge facing state DOTs due to impacts from the COVID-19 pandemic,” noted Jim Tymon, AASHTO’s executive director, in a statement. “While this isn’t the $49.95 billion we asked for, it’s a good start. We look forward to working with House and Senate leadership to determine a level of funding that will allow state DOTs to continue to meet the needs of a nation and its economy that is getting ready to return to work.”
Bipartisan support had been growing for the nearly $50 billion state DOT funding “backstop,” with more than 130 members of the House of Representatives supporting that request in a letter sent on May 11 to House Speaker Nancy Pelosi, D-Calif., and Minority Leader Kevin McCarthy, R-Calif. “Our transportation system is essential to America’s economic recovery, but it is facing an immediate need as the COVID-19 pandemic is significantly impacting states’ transportation revenues,” the letter said. “With millions of Americans following ‘stay-at-home’ orders to reduce the spread of COVID-19, many state governments are facing steep across-the-board reductions in tax revenues.”
As vehicle traffic has declined by 50 percent in many parts of the country due to work and travel restrictions, state DOTs expect a 30 percent average decline in forecasted revenues over the next 18 months – with some potentially experiencing revenue losses as high as 45 percent
“Due to these grim realities, some states are unable to make contract commitments for basic operations such as salt and sand purchases for winter operations,” the members said. “Both short-term and long-term transportation projects that were previously set to move forward are being delayed, putting construction jobs at risk.”