New Relief Coming from Washington – What Does This Mean for Transportation?

States are essential to moving critical infrastructure projects forward and will be key to building a sustainable economic recovery following the COVID-19 pandemic.

Thomas Curtin | Program Director, Infrastructure

Late Monday, December 21, Congress passed a combination omnibus and coronavirus relief measure, which includes $900 billion in supplemental aid—the second largest stimulus in U.S. history following the CARES Act passed earlier this year. The legislation now awaits the President’s signature to enact the law.

The bill contains language effectuating the one-year extension of the FAST Act, which was reauthorized for an additional year prior to its expiration at the end of September.  It also contains $45 billion in transportation relief, which comes as transportation agencies across the nation are reeling from unprecedented declines in ridership, use, and associated revenues.  The critical relief is appropriated as follows:

  • $16 billion for airline support
  • $14 billion for transit agencies
  • $10 billion for highways provided to state departments of transportation
  • $2 billion for airports
  • $2 billion for private bus operators
  • $1 billion for Amtrak

State DOTs will benefit most directly from the $10 billion in highway funding, which is being allocated as follows: $9,840,057,332 for state and local DOTs to be distributed according to the existing FAST Act formula; $114,562,862 for the Tribal Transportation Program; $35,845,307 for the Puerto Rico Highway Program; and $9,528,499 for the Territorial Highway Program.

The COVID-19 relief funding is flexible, providing for 100 percent federal share in Surface Transportation Block Grant-eligible projects, as well as “maintenance, operations, and administrative expenses, including salaries of employees (including those employees who have been placed on administrative leave) or contractors, information technology needs, and availability payments,” as well as those not included in existing long-range plans, Transportation Improvement Plans, or State Transportation Improvement Plans.  An additional provision provides for an approximate 14 percent suballocation to local jurisdictions with a population of over 200,000. 

The relief package comes at a critical time, as many states are putting together their final transportation budgets for the new fiscal year and heading into state legislative sessions.  As previously reported in NGA’s Policy Memo on Transportation Funding and Financing During COVID-19, the pandemic has had a devastating impact on state transportation budgets.  In many cases, states have been faced with the need to make significant cuts, including canceling future projects, reducing staff, and delaying infrastructure maintenance.

While the measure provides a critical stopgap, the one-year extension of the FAST Act expires in nine short months on September 30.  The incoming Biden Administration has signaled a robust infrastructure package, focusing on a sustainable recovery that creates jobs and, according to the president-elect, “build our economy back.”  In accepting his nomination for U.S. Department of Transportation Secretary, former South Bend, Indiana Mayor Pete Buttigieg stated that the incoming administration has “been given a mandate to build back better, and step one in building back better is to build.”

States are essential to moving critical infrastructure projects forward and will be key to building a sustainable economic recovery following the COVID-19 pandemic. Governors have taken action to enhance infrastructure, including creating new and increasing existing funding streams, advancing public private partnerships, addressing regulatory delays, improving transparency and promoting innovation.

As the nation’s Governors look to the reauthorization of surface transportation in the fall, and the potential for a game-changing infrastructure package in Washington, the NGA Office of Government Relations will be working to ensure states have a voice at the table, advocating for Governors’ Principles For National Infrastructure Investment.  The Center for Best Practices will provide programming and the tools states need to maximize their assets, projects, and opportunity at this critical juncture.