The Highway Trust Fund was set to run out of available money at the end of August but with a last-minute extension, contractors working on infrastructure projects can expect funding to continue—at least until May 2015.
The short-term funding extension bill, which still needs to be signed by President Obama, came down to the wire, barely meeting the Aug. 1 deadline that would have slowed payments to states by 25 percent, costing the industry jobs.
Despite the back-and-forth between the House and Senate and their failure to pass a long-term solution, this is good news for contractors who may have been concerned about losing significant funding on their federal highway projects. Without the extension, the industry would have faced even greater job loss. More background information on the bill
is available on the GOP website.
The bill provides $10.8 billion to keep the Highway Trust Fund afloat, the majority of which comes from a process called “pension smoothing” that would allow employers to contribute less to their employees’ pensions, increasing taxable corporate income over the next 10 years. The bill also makes changes to the government’s import/export customs fee. Congress will be forced to find a different solution to fund the Highway Trust Fund when the 10-month extension expires at the end of May 2015.
About 50 percent of funding on infrastructure projects, including roads, bridges, transit and more, come from the federal government’s Highway Trust Fund, which is paid for by the 18.4 cents-per-gallon gas tax. The government then allocates that money to states based on size, highway usage and necessity. States cover the other 50 percent.