Unspent Highway Funds

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States Ponder Future Transportation Funding

By Sean Slone | Tuesday, August 28, 2012 at 3:09 pm

The U.S. Department of Transportation recently made more than $470 million in unspent funds for transportation projects immediately available to states. The money comes from funds initially allocated for 671 earmarked projects in appropriations bills between 2003 and 2006 that are now either dead or delayed. While the rescissions could give states greater flexibility to use those funds, they could provide additional challenges for states hoping to jump-start their moribund projects.

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The U.S. Department of Transportation made more than $470 million available immediately to states for transportation projects, according to an Aug. 17, 2012, announcement from U.S. Transportation Secretary Ray LaHood.

The money comes from funds initially allocated to the Department of Transportation for 671 earmarked transportation projects included in appropriations bills between 2003 and 2006. The House of Representatives, in recent years, has banned earmarks from spending bills.
The transportation department is notifying states about the amount of money they have left from projects that were not completed or cost less than expected. States can apply to use those funds for other projects.¹
States are expected to retain any unused funding they have been allocated.
States must identify plans to use the funds by Oct. 1 and obligate the funding by Dec. 31. Funds not obligated by the end of the year can go to other states in 2013.² States could still spend the funds on the projects for which they were earmarked if those projects are now ready to move forward.³
The Obama administration has the authority to rescind the earmarks because of language included in the appropriations bills. This is the first time that authority has been used.⁴

The earmarks were primarily for transportation projects that are now dead or have been delayed.

In some cases, the project was completed and some funding was left over.
Other projects have been held up due to delays in design, environmental review, additional funding availability or other issues.⁵

Eighteen states have more than $10 million in rescinded earmark funds available.

Alabama ($51.5 million), California ($43.1 million), Texas ($30.8 million), New York ($29 million) and Pennsylvania ($28.5 million) have the most funds available among the states.
Wyoming is the only state with no funds available.
California has 71 earmarked projects that could lose funding, the most of any state.⁶

The rescissions could have both advantages and disadvantages for states.

Two Kentucky road projects—an interchange and a connecting road—near a business and industrial park in Bowling Green for which more than $7 million was earmarked are actually well under way. They are both fully designed, rights-of-way are being purchased and some utilities are being relocated to make way for the projects. But the construction phase can’t move forward because a federal lawsuit concerning environmental review standards is pending at the appeals court level. State Transportation Cabinet officials say it’s possible the lawsuit won’t be resolved by the end of the year, so the state could have to reobligate the funds to other projects and find additional federal funds for the Bowling Green projects later.
The release of the earmarks can give states more flexibility in cases where the amount of the federal earmark didn’t come close to what is actually needed for a project to begin. For example, Kentucky transportation officials point to a $983,000 allocation for the Interstate 66 project in Pike County, a comparatively small amount on a billion-dollar project they say is difficult for them to spend effectively.⁷

REFERENCES:

1 Matthew Daly. “White House offers states $470M in unspent funds for transportation projects.” Associated Press. August 17, 2012.

2 “USDOT Frees Up $473m for State, Local Road & Transit Projects.” Transportation Issues Daily. August 18, 2012.

3 Richard Simon. “How to use an unspent $473 million? No surprise, ideas differ.” The Los Angeles Times. August 20, 2012.

4 “USDOT Frees Up…”

5 Ibid.

6 Federal Highway Administration. “Unobligated Balances of FY 2003-2006 Appropriation Act Earmarks (as of August 15, 2012).”

7 Robyn L. Minor. “State still committed to roads projects.” Bowling Green Daily News. August 20, 2012.

Unspent Highway Funds