COVID-relief bill has $10B to help state DOTs offset pandemic-related shortfalls

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The massive COVID-19 relief bill passed by Congress on Monday promises to help Wisconsin’s transportation fund offset revenue shortfalls brought on by the pandemic even as it provides tax relief to businesses that took out a Paycheck Protection loan earlier this year.

The legislation calls for distributing $10 billion to state transportation departments to help them cope with projected revenue losses resulting from the pandemic. In Wisconsin, transportation officials have said they expect to be dealing with a $215.8 million shortfall in their next biennial budget, a result in part of falling gas-tax collections as people drive less amid the COVID-19 outbreak.

Kristin McHugh, a spokeswoman for the Wisconsin Department of Transportation, said it’s still unclear how much the state will receive and how the money will be used.

“We are reviewing the provisions included in the bill to determine how it will impact Wisconsin’s transportation program,” she said.

Separately on Monday, Congress provided an additional $284 billion for its Paycheck Protection Program — which provides forgivable loans to businesses that have been hurt amid the economic shutdowns and disruptions caused by the pandemic. More than 2,200 contractors, architects and other companies in Wisconsin’s construction industry have received $1.3 billion in total from the PPP program so far this year.

In another boon to the industry, the bill stipulates that loaned money will not be treated as income for tax purposes. Previous guidance from the IRS and Treasury Department had classified the loans as taxable, sowing anxiety at many companies. Along similar lines, companies will now be allowed to deduct, without restriction, any expenses that are paid for with the proceeds of a forgiven PPP loan.

The more than 5,500-page coronavirus-relief bill is the longest in U.S. history. The House of Representatives approved it in a 359-53 vote late Monday and the Senate followed in a 92-6 vote. Sen. Ron Johnson was among the six GOP senators who voted against the legislation.

State highway departments have been calling on federal lawmakers since last spring to provide aid for revenue lost during the pandemic.

In Wisconsin, for instance, vehicle-miles traveled have dropped sharply as many people have sheltered-in-place to slow the spread of COVID-19. Fewer cars on the road has meant less gas-tax collections this year. By the end of June, Wisconsin’s transportation fund collected $97.3 million less than expected — exceeding the $80 million shortfall the department had initially predicted.

Dan Fedderly, executive director of the Wisconsin County Highway Association, said additional federal aid should help WisDOT avoid cutting road projects and making other tough decisions that may have otherwise been necessary.

“It answers the larger question of making sure there are projects in the queue that are going to go out to the industry and out to contractors,” he said.

Debby Jackson, executive director of the Wisconsin Transportation Development Association, said the relief is “good news.”

“This probably doesn’t offset all the revenue losses at WisDOT,” she said. “But it goes a long way toward at least offsetting some of it.”

The relief bill will also be a vehicle for carrying out some of Capitol Hill’s unfinished business. Among its many pages is a water-resources bill that will provide $10 billion for 46 Army Corps of Engineers projects related to flood control and environmental and coastal protection.

The legislation also contains various clean-energy provisions sought by Democrats and fossil-fuel incentives favored by Republicans, $7 billion to increase access to broadband, $4 billion to help other countries vaccinate their citizens, $14 billion for cash-starved transit systems, $1 billion for Amtrak and $2 billion for airports and concessionaires.

— The Associated Press contributed to this report

Editor’s note: This story has been corrected to state that Debby Jackson is executive director of the Wisconsin Transportation Development Association. Follow @natebeck9