States and construction companies forced to cope with stopgap federal bills that provided transportation funding on the installment plan now have a bit more breathing room. The Hiring Incentives to Restore Employment (HIRE) Act, signed into law on March 18, includes yet another highway-transit extension. But this one stretches through December, and these days, that almost qualifies as a long-term bill. State and industry officials would much rather have a multiyear measure, but in this election-shortened year, the nine-month bill appears to be the best they will get.
The HIRE Act has several positive provisions for construction, most of them focused on transportation. Besides authorizing highway and transit programs through Dec. 31, the new statute adds $19.5 billion to strengthen the unsteady Highway Trust Fund and also restores highway funding to its 2009 level.
The HIRE Act will stabilize the highway market through 2010’s busy building period, says Jay Hansen, National Asphalt Pavement Association vice president for government affairs. “It means states can kick loose the projects for this construction season,” he says. Appropriations were in place, Hansen notes, “but we needed the extension, and we needed the fix of the Highway Trust Fund for the states to proceed with these projects.”
The new law bolsters the trust fund by transferring $19.5 billion from the general fund. That is more than enough to avert a $9-billion trust-fund shortfall that had been expected this summer. Of the $19.5 billion, $14.7 billion goes to the trust fund’s highway account and $4.8 billion to its mass-transit account.
In another plus for the trust fund, the HIRE Act directs the general fund to take over the trust fund’s responsibility for the cost of certain users who are exempt from federal motor-fuels taxes.
Senate Environment and Public Works Committee Chairman Barbara Boxer (D-Calif.) says that under the new legislation, state agencies won’t have to worry that, “when they wake up in the morning, there won’t be money in the Highway Trust Fund.”
It has been an understandable worry. The HIRE Act is the third trust-fund bailout in less than two years—$8 billion was shifted from the general fund in September 2008 and $7 billion last August.
The new measure also restores highway obligations to their 2009 levels by canceling previous obligation-authority rescissions. Since Oct. 1, those cuts had trimmed total federal road obligations by about $1 billion a month, compared with 2009 amounts.
In addition, the package expands the federally subsidized Build America Bonds program to apply to school construction and energy projects.
It also gives companies an exemption from paying Social Security payroll taxes for hiring those unemployed at least 60 days. That exemption extends through Dec. 31.
