Transportation Funding in the New House COVID Bill

Transportation Funding in the New House COVID Bill

October 02, 2020  | Jeff Davis

Following is a general overview of the $77 billion in transportation aid provided by the revised coronavirus aid bill passed by House Democrats this week.

Department of Transportation. The new House bill would appropriate $48.1 billion to the U.S. Department of Transportation, on top of the $36.1 billion appropriated by the CARES Act in March 2020, as follows:

Mar. 2020 May 2020 Sept. 2020
Enacted Heroes Act Heroes Act
CARES Act version 1 version 2
USDOT appropriations
Office of the Secretary
Salaries and Expenses 1.8 20.0
Essential Air Service 56.0 75.0
Federal Aviation Administration
Operations 75.0 50.0
Airport Grants 10,000.0 13,500.0
Federal Highway Administration
Highway Infrastructure Programs 15,000.0 0.0
Federal Motor Carrier Safety Administration
Operations and Programs 0.2 0.2
Federal Railroad Administration
Safety and Operations 0.3 0.0
Amtrak Northeast Corridor Grants 492.0 1,392.1
Amtrak National Network Grants 526.0 1,007.9
Federal Transit Administration
Transit Infrastructure Grants 25,000.0 32,000.0
Public Transportation Emergency Relief 15,750.0
Maritime Administration
Operations and Training 3.1
State Maritime Academy Operations 1.0
St. Lawrence Seaway Development Corp.
Operations and Maintenance 1.5
Office of Inspector General
Salaries and Expenses 5.0 5.0
TOTAL, USDOT APPROPRIATIONS 36,085.3 30,825.0 48,051.7

The most interesting thing about the changes from the May 2020 Heroes Act to the September 2020 Heroes 2 bill, at USDOT, is that the authors of the bill zeroed out funding for state DOTs through the highway program. No reason was given, but one has to think that AASHTO’s opposition to the Democratic surface transportation reauthorization bill had something to do with that. Nor does the new bill contain a provision in Transportation and Infrastructure Committee jurisdiction temporarily increasing the federal share of regular highway and transit aid to 100 percent of project costs, which has been in several other recession stimulus bills in past decades.

The mass transit aid in the new bill is much greater than that in Heroes 1 ($32.0 billion versus $15.8 billion), and is structured very differently. For details, see this article.

The new bill provides another $13.5 billion in aid to airports. The first $500 million (at least) is to take the regular fiscal 2021 airport grants (assuming they are provided in a separate appropriations act) up to a 100 percent federal cost share.¬† Then, at least $12.5 billion is to be apportioned to primary airports based on their 2019 share of total passenger enplanements. Once that is settled, up to $200 million goes to general aviation and non-primary commercial airports. Of the $12.5+ billion, 25 percent is specifically to be set aside for “on-airport car rental, on-airport parking, and in-terminal airport concessions (as defined in part 23 of title 49, Code of Federal Regulations) in the form of waiving rent, minimum annual guarantees, lease obligations, fees, or penalties, or, at the request of the owner of an in-terminal concession, to provide for a buyout of such concession.”

This would bring total COVID-related support for airports to $23.2 billion, as shown below (in millions of dollars, before oversight takedowns).

CARES Act Heroes 2 TOTAL
Commercial Service Airports – Special Formula 7,400 12,500 19,900
Commercial Service Airports – Regular AIP Formula 2,000 0 2,000
General Aviation/Non-Primary Airports 100 200 300
Increase Regular AIP Grant Cost Share to 100% 500 500 1,000
Total Appropriations 10,000 13,200 23,200

The new House bill provides an additional $2.4 billion for Amtrak ($1.4 billion for the Northeast Corridor and $1.0 billion for the National Network), in addition to $1 billion in CARES money and Amtrak’s regular $2 billion per year appropriations in 2020 and 2021. However, $569 million of the funding in the new bill is actually a backhanded way of bailing out state and local governments.

Under Amtrak’s latest service line plan, state governments were expected to pay Amtrak $304 million in 2020 and $308 million in 2021 to support Amtrak’s various state-supported trains. $350 million of the National Network appropriation in the new bill is “to be apportioned toward State payments” for these routes. Similarly, state and local governments were expected to pay $401 million in 2020 and $410 million in 2021 for local commuter rail access to the Northeast Corridor, and $220 million of the money from the NEC appropriation in the new bill is to defray those costs.

This would take total COVID-related aid for Amtrak to $3.4 billion this  year, as follows (in millions of dollars):

CARES Act Heroes 2 TOTAL
Northeast Corridor 492.0 1,392.1 1,884.1
National Network 526.0 1,007.9 1,533.9
Total Appropriations 1,018.0 2,400.0 3,418.0

Transportation-specific aid outside DOT. The new bill also contains a mystery $100 million transportation appropriation in the Financial Services and General Government title of the appropriations portion of the bill, and $28.3 billion in additional grants to air carriers and their contractors in order to stave off mass layoffs until March 31, 2021.

Mar. 2020 May 2020 Sept. 2020
Enacted Heroes Act Heroes Act
CARES Act version 1 version 2
Other transportation aid:
Grants to Multi-State Transportation Entities 100.0
Air Carrier Payroll Grants for:
Passenger air carriers 25,000.0 25,000.0
Cargo air carriers 4,000.0 300.0
Contractors 3,000.0 3,000.0
Loans and Loan Guarantees for:
Passenger air carriers 25,000.0
Cargo air carriers 4,000.0
Businesses critical to national security 17,000.0

The $100 million mystery appropriation (on page 52 of the bill) is for “making payments to multi-State entities that are involved in the transportation of passengers or cargo and are suffering revenue losses due to the Coronavirus Disease 2019.” The bill makes reference to a June 2020 Federal Reserve document for its definitions of eligible recipients, which clarifies that “A Multi-State Entity is an entity that was created by a compact between two or more States, which compact has been approved by the United States Congress, acting pursuant to its power under the Compact Clause of the United States Constitution.” It also clarifies that eligible recipients have to be issuers of their own bonds, which “must have been rated at least A-/A3 as of April 8, 2020, by two or more major NRSROs.”

And the bill requires that recipients must be “involved in the transportation of passengers or cargo.” The list of interstate compacts approved by Congress since 1789 is pretty short, and of the ones that are involved in transportation, there are only the Port Authority of New York/New Jersey, the Washington Metropolitan Area Transportation Authority, the Delaware River toll and port compacts, the New Jersey-Pennsylvania Turnpike Bridge compact, the Kansas City Area Transportation Compact, and a bunch of smaller interstate bridge compacts. (It would be easier if Congress could still earmark things, so we could know with certainty who this money was meant for, but $100 million split a bunch of ways wouldn’t do the Port Authority a tremendous amount of good, seeing that they were trying to borrow $1.1 billion from the Fed anyway).

With regard to airlines, the new House bill (in Division Q, starting on page 1903) provides another $28.3 billion in payroll support aid to air carriers (described in this article).

General-purpose state-local aid. And the new bill also features the top priority of Democrats, general-purpose aid to state and local governments (though not nearly as much as the earlier bill). Some of this aid could be spent on transportation.

Mar. 2020 May 2020 Sept. 2020
Enacted Heroes Act Heroes Act
CARES Act version 1 version 2
General-purpose aid which state and local governments could choose to use some of for transportation:
Grants to State Governments* 69,500.0 500,000.0 238,000.0
Grants to Territorial Governments* 3,000.0 20,000.0 9,500.0
Grants to Indian Tribes 8,000.0 20,000.0 9,500.0
Grants to Local Governments 69,500.0 375,000.0 179,000.0
Total, General-Purpose Fiscal Relief 150,000.0 915,000.0 436,000.0
*The District of Columbia was classified as a Territory under the CARES Act relief fund but is included as a State in the Heroes Act (both versions) relief fund.
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