AASHTO: TEA 21 delay costly

| 9/17/2003

A survey of state transportation representatives by The American Association of State Highway and Transportation Officials estimated a short-term extension of federal highway and transit programs, rather than enactment of a six-year bill, would mean $2.1 billion in project delays and the loss of more than 90,000 jobs.

The current federal legislation, the Transportation Equity Act for the 21st Century (TEA-21) expires Sept. 30, 2003. Revenue provisions related to the program could force a shutdown of highway and transit programs unless Congress acts, AASHTO concluded.

AASHTO surveyed the 50 states, the District of Columbia and Puerto Rico in August to determine the results from a short-term extension, rather than a full-term six-year reauthorization.

States said a short-term extension would:

  • Compound state budget problems, cause $2.1 billion in project delays, add project costs and cause the loss of 90,000 jobs.
  • Reduce work for consulting engineersas the project pipeline contracts. Design, planning and environmental activities will be postponed and contracts put on hold. Engineering, planning and environmental consulting firms will face cutbacks.
  • Eliminate jobs for construction contractors and workers. As the project pipeline shrinks, contractors will be forced to scale back their operations, including the number of construction workers hired.
  • Create a falloff in construction equipment sales and leases. Facing the uncertainty of a short-term extension, contractors will be less willing to purchase new equipment or enter into equipment leasing agreements.
  • Shelve long-term, multiyear projects. The interruption in guaranteed long-term cash flow in federal assistance could adversely affect the many states that utilize innovative financing techniques, such as grant anticipation note borrowing, Grant Anticipation Revenue Vehicle financing instruments and advance construction.
  • Delay transit projects and force service cuts. The public, especially rural communities, and the elderly will feel the impact.

States reported they have planned their programs anticipating funding at the Fiscal Year 2003 level. While 12 states say such a freeze would have minimal impact, the majority say a reauthorization delay will come at the cost of project delays and lost jobs.

To ensure that construction projects continue without interruption to funding, the AASHTO Board of Directors Sept. 7 urged that Congress enact "a short-term, temporary six-month extension of TEA-21 that ensures that highway, highway safety, motor carrier and transit programs do not shut down after Sept. 30, when TEA-21 expires." It also urges that Congress promptly pass well-funded six-year legislation reauthorizing highway, transit, highway safety and related programs.

AASHTO Executive Director John Horsley said, "Faced with a possible shutdown of the highway and transit programs, states are calling for immediate action on a short-term fix. But the cost of any delay comes high in terms of jobs and increased costs. We urge Congress to continue to press for passage of a six-year bill as soon as possible."

AASHTO has recommended that the federal highway program be funded at $245 billion as a minimum, and transit programs at $55 billion as a minimum over six years.