The House and Senate moved toward a week of deadlines ahead of the Christmas holiday recess, needing to pass a 2018 budget or temporary extension by Dec. 22 to keep agencies funded and moving toward a likely vote on a major tax cut bill after negotiators agreed on its framework.
Lawmakers reportedly planned to offer a new “continuing resolution” to fund the government into sometime in January, as they were not expected to complete negotiations on a full-year appropriations measure for fiscal 2018, which began Oct. 1.
Another CR would allow them to avoid triggering a shutdown of most federal agencies, but for state departments of transportation it would mean they continue to receive partial-year federal funding at 2017 levels.
That means many state DOTs would not be able to commit to projects that do not already have enough federal funds available. And it means they cannot yet tap any of a $1 billion increase in federal highway program funding that was scheduled to kick in this year.
Details of the tax bill agreement between House and Senate negotiators were still emerging, and it was unclear to what extent the final package might contain measures that would restrict certain transportation and bonding benefits.
News reports said negotiators had dropped a controversial House proposal to end tax exemption of private activity bonds, but would end advance refundings of government bonds that some states and agencies have used to save on interest costs so they could plow that money back into projects.
Transportation stakeholders awaited details on how the measure might affect tax credit bonds and advance refunding of tax-exempt government bonds, and transportation fringe benefits provided by employers.
The American Association of State Highway and Transportation Officials and other industry groups had also urged lawmakers throughout the year to use the rare opportunity of major tax legislation to carve out new revenue to end a long-term solvency threat to the Highway Trust Fund, in which dedicated HTF revenues will exceed authorized spending levels starting in fiscal 2021.
Transportation groups have also urged Congress and President Trump to designate some additional revenue within tax reform to fund the president’s promised infrastructure investment plan that has yet to emerge.
But tax writers left out of the tax bill both a long-term trust fund fix and revenues designated for the infrastructure plan.