In a fiscal-year-end bonus, the Federal Highway Administration has redistributed to the states $2.8 billion in unused federal highway aid, which they can use to help fund road and bridge projects.
FHWA’s reallocation of unused highway obligation authority is an annual occurrence, taking place toward the Sept. 30 end of the federal fiscal year. Under the 2016 action, announced in an Aug. 31 FHWA notice, 49 states and the District of Columbia will share in the funds. Hawaii receives no funds.
Brian Deery, senior director of the Associated General Contractors of America highway and transportation division, notes that the redistributed authority doesn’t increase the overall $42.4-billion obligation limit that Congress approved for this year. “It’s not new money,” he says.
But Deery adds that the reallocation benefits particular states “because they’ll get more money in their program...So to our members in that state, it’s a big deal.”
California gets the largest portion of the 2016 total, with $293.1 million. New York ranks second, with $155.8 million.
Florida is third, at $150 million, followed by Illinois, $133.4 million; and Pennsylvania, $123.4 million.
Rounding out the top ten are Georgia, at $122.2 million; Ohio, with $120 million; Michigan, at $103.5 million; Virginia, $90 million; and Texas, $75 million.
Joung Lee, American Association of State Highway and Transportation Officials director of policy, says the yearly redistribution “recognizes the fact that the obligation limitation provided by Congress is on an annual basis. So if you don’t use it within that fiscal year, then it lapses.”
State departments of transportation tend to use up all of their apportioned shares of the overall obligation limit, Lee says. “You don’t really see state DOTs putting unused obligation limitation on the table to be redistributed.” States’ shares are determined by formulas set by Congress.
In fact, state DOTs could have used more than their original apportionments—they requested $5.2 billion in this year’s redistribution, far more than the amount FHWA had available.
States must obligate the reallocated authority to specific projects by Sept. 27, FHWA said.
But Lee observes that actual expenditures could occur in future years. He says, “Using up your ‘ob limit’ this year doesn’t mean that you have to finish building the project this year.”
He adds, “You just have to get the commitment of federal dollars to that project by end of [September] that you can then draw against until the project is finished.”
Lee says that the unused money tends to come from the piece of the obligation ceiling that’s not apportioned to the states. That nonapportioned aid goes for such programs as Transportation Infrastructure Finance and Innovation Act (TIFIA) loans, highways in national parks and on other federal lands, research and development and FHWA administrative expenses.
Though the funds may originally have been designated for, say, research or TIFIA, states have wide latitude in where they will deploy the redistributed aid. “If they’re putting it in programs that are of primary need, then obviously that helps out our members,” Lee says.
Of California’s $293 million, Caltrans, the state DOT, will receive $185 million. Local transportation agencies will get the balance.
Caltrans Director Malcolm Dougherty said in a statement, “This money will be put to work immediately supporting jobs and making improvements that will benefit Californians for decades to come.”
Louisiana, which received $40.3 million, plans to use the funds for improvements to Interstate 10, from I-49 to the Atchafalaya Basin Bride in Lafayette and St. Martin parishes. Gov. John Bel Edwards (D) said in a statement that the I-10 corridor “is a top priority for me and the state.”
