Conferees reach agreement on key highway funding issues

News Associated General Contractors of America (AGC) June 24, 2005
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Yesterday, House and Senate conferees reached an agreement, in principle, on two key funding issues: scope and division of projects between the House and the Senate. It is also being reported that the conferees have agreed to a total six-year funding level of $286.5 billion. AGC was instrumental in working with key conferees toward this agreement and is pleased that progress is being made toward a final bill.

On scope, the conferees agreed to include the same percentage of total highway funding subject to the minimum guarantee program as was included in TEA-21. The minimum guarantee program provides extra funding as necessary to guarantee each state a specific percentage rate of return of its deposits into the Highway Trust Fund. Under TEA-21, scope was defined as the dollars distributed to states subject to minimum guarantee divided by total highway funding authorizations, or 90.2%. Numerically, the House- and Senate-passed bills authorize about $200 billion over the period FY 2005-2009, and 90.2% of $200 billion is $180.4 billion.

The conferees also agreed to provide the Senate with 40% of any high-priority project earmarks in the final bill. While the House-passed bill contained $11.1 billion for more than 3,000 projects, the Senate-passed bill contained no project earmarks. It is uncertain by what percentage the House earmarks will have to be cut to accommodate Senate projects, but during the conference on TEA-21 the House earmarks were cut by 25%. Estimates would give the House about $9 billion in high-priority project earmarks and the Senate about $6 billion. The conferees also agreed to split any other earmarks outside the high-priority projects account on a 50-50 basis.

With the bill’s current short-term extension expiring next Thursday, it appears more and more unlikely that a conference report will be completed by that deadline despite yesterday's progress. Most significantly, decisions regarding the distribution of highway funding among the states have not been made, nor has progress been made on the many policy issues in the bill. As a result, Congress may be required to pass a ninth extension in order to allow the conferees to complete their work.

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