Federal budget stalls infrastructure funds

WASHINGTON, D.C.—Congress has yet to pass the fiscal year 2022 federal budget, and without it, appropriations for the Infrastructure Investment and Jobs Act (IIJA) are unavailable.

The roughly $1.2 trillion IIJA, signed into law Nov. 15, includes around $550 billion in new spending, which will be doled out over the next five years for surface transportation programs.

Industry trade groups encouraged congressional leaders to pass the new budget in a letter signed by 66 organizations Jan. 24.

"We can begin to fulfill the promise of the IIJA expected by the public only when full-year appropriations for FY 2022 becomes available—the outcome that all of the signing organizations recognize and fully and unreservedly support," the letter stated, in part.

The current stopgap government funding bill, which expires Feb. 18, kept in place the FY 2021 budget. On Feb. 8, the House approved another stopgap spending bill to avert a government shutdown and delay passing the full budget until March.

Gabrielle Hopkins, vice president of federal affairs at the Auto Care Association (ACA), said without the appropriations in the FY 2022 budget, the IIJA is "essentially like a check that's not good yet until you have the money in the bank." The ACA, she said, signed the letter to stress the importance of making those funds available.

The Tire Industry Association (TIA) also joined the letter, calling the issue "very critical issue for TIA and an important one for the implementation of the legislation," according to Roy Littlefield IV, TIA director of government affairs.

"We signed on because without FY 2022 appropriations in place, states and local governments will be unable to access the IIJA's roughly 20 (percent) funding increase for highway formula programs, along with any new transportation initiatives that Congress provided for in the IIJA."

State departments of transportation already are planning and programming around the increased funding, but projects will be delayed until the budget passes, according to Susan Howard of the American Association of State Highway and Transportation Officials (AASHTO), which also signed the letter urging Congress pass the budget.

"The (IIJA) offers many opportunities to deliver on long-standing needs as well as engage in new policy areas," Howard, director of policy and government relations at AASHTO, said.

Howard said she believes states and communities will see benefits of the IIJA over the next few years as funds are "fully" put to work.

"Implementation of new programs will take some time," she said. "Not only because of the appropriations challenge, but because establishing new programs can't happen overnight. In addition, the bill includes many new discretionary grant programs that still need to be launched."

Littlefield sees plenty of benefits in the IIJA but said the biggest obstacle right now will be funding sources.

"The challenge will be that there are many other legislative priorities including the (Build Back Better Act) and other social reforms that could end up costing more than the highway bill," Littlefield said. "Without increasing existing taxes, we are concerned that Congress may look for new revenue streams to fund the bill."

Hopkins said implementation of the IIJA will be a long process because of its scale and the huge amount of planning involved on every level of government, but hardest part was over — getting the bill signed into law.

"I think sometimes politicians get a bad rap, … but when you look through a bill like this you can see how well thought-out these issues are," she said. "Most of these provisions, they didn't come up with these ideas alone, because they had industry advocates and citizens coming to them and saying, 'This is a problem we see, and this is the solution we are proposing.' They demonstrated the importance of that issue, worked with their legislators, and now, here it is.

"It's law, which is pretty exciting."

The U.S. Tire Manufacturers Association also said the biggest challenge to the infrastructure plan was getting the bill passed.

"That said, there will be a short window for programs within the infrastructure law to prove their viability and effectiveness before funding challenges come into play. The bill made a historic investment in our nation's infrastructure, but it will be up to future Congresses to ensure those programs are appropriately funded and reauthorized."

The USTMA said the "IIJA offers an unprecedented opportunity to modernize our roads, highways, ports and airways in ways that are sustainable, resilient and meet the needs of our future."

Specifically, the USTMA commended the inclusion of research and provisions in the IIJA that would improve the scrap tire markets.

"We have a once-in-a-generation opportunity to truly transform the country's infrastructure by focusing on our shared priorities," USTMA President and CEO Anne Forristall Luke said.

In a Feb. 4 letter to U.S. Senate and House leaders, the USTMA urged legislators to focus on energy efficiency, circularity and stormwater mitigation as they relate to tire policy and "related transportation sustainability initiatives."

The USTMA said any policy that "encourages investment in domestic infrastructure has a substantial impact for our member companies and their products."

Maurice Taylor Jr., chairman of Titan International, the largest domestic producer of OTR tires, called implementation of the IIJA a "waiting game" as the government allocates funds.

"My guess is that it will be late 2023 or mid-2024 before things start to move," Taylor said. "I believe that could either supercharge Titan's business, or, at the very least, help continue our business at the current levels.

"It's all good news as I see it."