DALLAS – States will share more than $2 billion of unexpected federal highway funding from old, unexpended project earmarks thanks to a provision in the fiscal 2016 omnibus budget bill that Congress passed in mid-December.
A House amendment to the budget bill that became law (PL 114-113) gives state transportation departments the authority to use funding from unexpended earmarks remaining as of Sept. 30, 2015, on projects within 50 miles of the original proposal. An earmark is a legislative provision that allocates funds for a specific project, program or organization.
The authority extends for three years after state officials notify the federal Transportation Department how they intend to allocate the repurposed funding. State DOTs may also capture leftover funds from earmarked highway projects that were completed if the total cost was less than the congressional allocation. The original earmark allocations were written so that any unspent federal funding could not be used on other projects.
The omnibus budget law requires state DOTs to submit quarterly reports to the Transportation Department on how much of the repackaged funding is being spent on the eligible projects.
"The federal share of the cost of a project carried out with funds made available under this section shall be the same as associated with the earmark," the amendment said.
A report by the Eno Center of Transportation said the unexpended earmarks totaled $2.1 billion on June 30, three months before the end of fiscal 2015.
"Some of the states had one or two big earmarks that were not expended, while others had none because they were more efficient in getting the money out," said Jeff Davis, a senior fellow at Eno. "The total from June won't change much over the last three months of fiscal 2015."
An estimated 1,300 projects have unexpended earmarks, Davis said, with 17 having more than $10 million remaining.
New York has $221 million of unexpended congressional earmark funding, followed by Georgia with $164 million and California with $124.8 million, according to an Eno study.
A similar earmark provision was in an initial version of the five-year, $300 billion transportation funding bill, but was removed to improve its budget score, Davis said.
The Federal Highway Administration is now updating its earmark database and will issue a report soon on which states are eligible and the amount of repackaged funding that is available to them, said Joung Lee, policy director for the American Association of State Highway and Transportation Officials.
Eligible projects must have been on the books for at least 10 years and less than 10% of the earmarked funds have been expended, he said.
"For now we only know that it may cover quite a number of earmarks that might otherwise indefinitely remain unspent, and that it may support a significant amount of new infrastructure investment based on money Congress already authorized but that state DOTs could not actually spend," Lee said.
The unexpected funding will not be evenly distributed among the states, said Bud Wright, executive director at AASHTO.
"This provision releases a lot of funding and will apply to most states, though under some very specific conditions," he said.
The revived funding is more restrictive than the usual allocations of federal funding based on population and size of a state's road network, Wright said.
"This is not money that is spread evenly across the country," he said.
The proposed reallocation of earmarked funds is four times the funding provided in fiscal 2016 for the Transportation Investment Generating Economic Recovery grant program for road, rail, port and transit projects, Wright said.
"So it is a substantial amount and will be very welcome, as many states continue to struggle to pay for their transportation project needs," he said.
