All States Would Get Uniform Percentage Funding Increases Under Senate Bill, FHWA Says
August 1, 2019|Jeff Davis
The Federal Highway Administration has completed its initial funding analysis of S. 2302, the Senate highway reauthorization bill, as amended and reported from committee. The analysis shows that every state will receive annual funding that will average a 19.0 percent funding increase versus their FY 2020 FAST Act total.
This is because the new bill (the America’s Transportation Infrastructure Act) would lock in the current shares of total formula funding that are still, basically, the shares from FY 2009, the last year of the SAFETEA-LU law. (The Senate bill would use FY 2020 as the base share, which is tied to the FY 2015 shares, which were in turn chained to the FY 2012 shares (SAFETEA-LU FY 2009 formula plus state share of earmarks – the only variable is if any state has to be adjusted to get 95 percent of its estimated Highway Trust Fund Highway Account tax contribution dollars back out in the form of new formula apportionments, and so far, Texas is the only state that has triggered that adjustment). For example, Alabama, at the top of the alphabetical list, was guaranteed 1.9373 percent of formula funding under the FAST Act (and MAP-21), and will receive that under the new ATI Act.
Annual Highway Formula Funding Levels – FY 2020 FAST Act vs. FY 2021-2025 Averages Under the Proposed ATI Act
|Contract authority for apportioned programs and allocated-via-formula programs (excluding ferries). Source: FHWA.|
|FY20 FAST Act||FY21-25 ATIA Average||Annual Avg. vs FY20|
|Million $||Pct. Share||Million $||Pct. Share||Million $||Pct.|
|Dist. of Col.||176.7||0.4074%||210.3||0.4074%||+33.6||+19.0%|
The above table, and two other tables showing state-by-state annual aggregate totals and state-by-state average funding by program, can be downloaded in PDF format here.
The FHWA analysis makes clear one key difference between the eight formula programs that currently exist that would be continued by the FAST Act, which are apportioned to states via the formula in 23 U.S.C. §104, and the three new formula programs (safety, carbon emission reduction, and PROTECT grants), which are technically allocated (not apportioned) but would be given to states in the same percentage shares as the apportioned funding under §104. Funding apportioned under §104 (averaging $49.9 billion per year under the bill) is not reduced by FHWA via the application of the annual obligation limitation – instead, states get the full gross amount of contract authority each year that is then fungible with their prior-year balances, and the state then has to fit all of that under its annual obligation limitation distribution.
The three new programs are subject to the “lop-off” procedures under the annual obligation limitation (sec. 120 of the annual DOT appropriations bill and, if there is no appropriations bill, sec. 1102 of the highway bill. After making room for certain administrative expenses and prior-year unobligated balances of allocated programs (like TIFIA and INFRA) “off the top” of the obligation limitation, all the other allocated programs (except the §202 tribal transportation program) then have their contract authority reduced by a certain percentage to match the amount of remaining obligation limitation. In FY 2019, this was a 9.9 percent reduction to TIFIA, INFRA, the other federal lands programs, etc. FHWA estimates that the three new formula programs would be reduced by 8.5 percent each year because that is the three-year lop-off average for FYs 2017-2019. This would reduced the total contract authority for these three new formula programs from the $1.886 billion per year provided in the bill to $1.726 billion per year.
However, all is not lost. That excess contract authority still makes it back to states – the obligation limitation process also provides that, within 30 days of the application of the obligation limitation, FHWA then must give that lopped-off contract authority back to states, in the form of a lump sum that each state can use for any project eligible under the Surface Transportation Block Grant Program in 23 U.S.C. §133(b). In FY 2019, states collectively received an extra $252 million in this fashion (see the FHWA notice here), which was then fungible with the rest of their FY 2019 apportionments and prior-year carryover balances.
In other words, because the three new programs are not apportioned directly under §104, somewhere between 8 and 10 percent of the contract authority for those programs will effectively be transferred to the Surface Transportation Block Grant Program. (However, it should be noted that because the three new programs are not apportioned under §104, they are also exempt from the general transfer authority in 23 U.S.C. §126, which gives states general authority to transfer up to half of their new apportionments for any apportioned program to any other apportioned program.)
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