At a time when policymakers are considering whether to increase federal investment in transportation infrastructure, data from the U.S. Treasury show that cash expenditures for federal-aid highway programs flattened for fiscal 2017 and actually declined in the first three months of fiscal 2018.
In addition, the data from Treasury's monthly statements on receipts and outlays show that federal transit spending fell in the 2017 budget year, mostly due to a decline in capital grants to individual projects but even reflecting a slight drop in formula outlays to transit agencies.
The Treasury statement for last September, which included totals for all of fiscal 2017, reported that full-year outlays for federal-aid highway programs totaled $43.585 billion, up just 0.38 percent from $43.421 billion for fiscal 2016.
And that report showed that all fiscal 2017 spending by the Federal Transit Administration fell about 1.3 percent to $12.263 billion from the prior year's $12.421 billion. Treasury reported FTA formula grants, the portion of spending from the Highway Trust Fund's mass transit account, totaled $9.460 billion in 2017, down slightly from $9.466 billion in fiscal 2016.
In its statement for December, covering the first three months of fiscal 2018, Treasury said cash outlays for the federal-aid programs totaled $10.604 billion, down 4.4 percent from $11.093 billion in the same three months of the prior fiscal year.
That stands in contrast to a year earlier, when Treasury reported that highway program outlays rose as the 2017 fiscal year got under way.
Transit funding rose in the past three months, however, as Treasury said both capital grants and formula outlays outpaced the first quarter of the 2017 fiscal year.
The flat to declining highway outlays also stands in contrast to what Congress previously approved and what state departments of transportation expected.
Under the Fixing America's Surface Transportation Act that Congress approved in late 2015, lawmakers authorized a 2.1 percent increase in 2017 federal-aid highway project funding commitments and a 3.3 percent hike in transit programs. Highway funding was also scheduled to increase another 2.2 percent in 2018, while transit funding was scheduled to stay unchanged.
But actual cash outlays can trail funding commitments for various reasons.
Joung Lee, policy director for the American Association of State Highway and Transportation Officials, said the data from Treasury "partly reflects congressional delays both last year and now in approving full-year appropriations that let transportation agencies use the FAST Act increases."
He added: "Another potential factor for the lag in cash flow may be related to delays by the new Trump administration in pushing out discretionary grant funds."
For instance, since passing the FAST Act Congress has repeatedly delayed passing full-year appropriations bills that would let the transportation funding increases take effect, using stopgap government funding measures that left DOTs repeatedly drawing on partial distributions of federal funds at prior-year levels.
For fiscal 2017, lawmakers did not finally pass a full-year spending bill until May, after which the Federal Highway Administration was able to distribute the rest of the year's project obligation limits at the higher FAST Act levels.
But while that meant DOTs could finally obligate all their 2017 funds to projects, the bills for actual outlays would come in over many years as projects reached completion.
In addition, the new Trump administration in its first year took time to reassess transit grant project applications and a USDOT grant program. It ended up rebranding the former Fastlane infrastructure grants that come out of the Highway Trust Fund, calling the program INFRA and modifying some of its terms.
The USDOT issued a combined 2017-2018 grant solicitation that had the effect of delaying more than $700 million in 2017 grants. Applications were due Nov. 2, and it is not clear when the administration will finalize its project choices and award the grants.
Separately from the trust fund, Congress in its full-year spending bill last May also appropriated $500 million to the USDOT for its TIGER grants. While still staffing up political appointees, the department sought project applications through Oct. 16, and has not yet awarded any of those funds.
That would not affect the federal-aid project outlays in the Treasury statement, but it is another instance of 2017 transportation project funds that are available and still going through a process before they will be distributed sometime in fiscal 2018.
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