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AASHTO Journal

States Waiting on This Year’s FAST Act Funding Increases as Construction Season Begins

It is time for new infrastructure projects to get under way across the nation as the spring of 2017 commences and winter's storms and frozen ground fade into memory. But state departments of transportation are still waiting to access hefty amounts of funds left frozen by Congress.

The dilemma is that Congress authorized the extra funding in a 2015 multiyear surface transportation law but is refusing to release the additional money until lawmakers can hammer out this year's federal budget.

Caught in the middle are stakeholders like state DOTs. The amounts of frozen funding vary for each state based on a formula, but they total more than $1 billion nationwide when looking at the entire fiscal year. In each state, however, the extra funding would be enough to have launched more projects this spring if the money was already cleared to use. 

The Alabama DOT cannot yet use nearly $17 million in highway funding known in budget parlance as obligation limitation, or "oblim" for short, according to a staff analysis by the American Association of State Highway and Transportation Officials. Oblim represents the ceiling on how much federal funding a state may commit in a year on its federal-aid highway projects.

capitol0816.jpgIndiana is still waiting to plug $20.7 million of new oblim into its 2017 project cycle. Arizona cannot tap into $16.3 million that is sitting there, authorized but not yet appropriated. For Florida the amount tops $42.2 million.

The amount of money Congress is keeping so far this year from Texas, on the high end, totals $82.7 million. Wyoming, near the low end, is waiting to use nearly $5.5 million.

"This really adds up for state DOTs, and is now starting to cause headaches for some that face tight deadlines to wrap up their 2017 project budgets and lock in construction contracts," said AASHTO Policy Director Joung Lee.

"Particularly for states in northern areas with short construction seasons, not having their full federal funding assured by late April makes it harder for them to put federal funds to work," he added.

All of this is because Congress authorized – and fully paid for – modest annual increases in highway funding to state DOTs in the Fixing America's Surface Transportation Act it passed in December 2015. States absorbed their fiscal 2016 increases soon after. But when the first of the remaining annual hikes was due to kick in last Oct. 1 with the start of the 2017 budget year, lawmakers instead passed the first of so far two continuing resolutions that kept funding most government operations at 2016 levels.

The latest stopgap funding measure expires April 28, and both appropriators and congressional leaders have said they want to complete a new measure that can fund the government for the rest of 2017 and end the freeze seven months into this budget year.

But until they pass a new budget accord and the president signs it into law, state DOTs and other stakeholders are waiting to see if they will get the money they've been expecting. State officials have been telling Congress that the delay is hurting them.

South Dakota Gov. Dennis Daugaard, at a March 1 Senate Commerce Committee hearing, said his testimony also represented the views of transportation departments in nearby states of North Dakota, Montana, Wyoming and Idaho.

"We are frustrated," Daugaard said, because while the federal government is under a continuing resolution, FAST Act funding levels for this year "are not in effect. We have a short construction season in South Dakota. So a funding delay of a few weeks can sometimes translate to a year's delay in delivering a project."

David Bernhardt, commissioner of the Maine DOT and this year's AASHTO president, carried that message to a Senate Appropriations subcommittee hearing March 8. "Missing the construction window due to a less than full-year obligation limitation can mean that some projects are delayed," he said.

Transit agencies around the country are in a similar situation, since the FAST Act authorized a nearly $400 million increase in federal transit formula allocations for 2017 that have also been frozen. And the FAST Act set aside $199 million, for 2017 only, to help fund crash-prevention positive train control systems for commuter and passenger rail lines – money left untouched so far.

The delayed funding increases also come as the transportation sector faces a possible reduction in the USDOT's TIGER grant program this year, which Congress in recent years has funded at $500 million. President Trump has proposed to strip TIGER completely out of his 2018 budget, and is urging lawmakers to also zero it out of the 2017 budget deal they are trying to complete, but appropriators could decide to continue TIGER at some level for the rest of this year.

In addition, the industry is waiting for the administration to award $850 million in new FAST Act-authorized grants for projects of regional and national significance including freight projects that are paid for out of the Highway Trust Fund's highway account. The Obama administration accepted applications for what it called those Fastlane grants late last year, and it is up to the Trump administration to submit to Congress a list of proposed award winners.

3/31/2017
Questions regarding this article may be directed to editor@aashtojournal.org.