ROADS/BRIDGES: State DOTs to lose some contract authority says FHWA

July 3, 2017

Rescission will cost DOTs millions, effect state-owned roads and bridges

The Federal Highway Administration (FHWA) informed state departments of transportation how much each is losing as of June 30 in certain categories of highway program contract authority, as Congress required in the fiscal 2017 government funding bill that it sent to President Trump on May 4.

The cuts, or “rescissions,” range in size. The FHWA notice listed California at the high end losing nearly $89 million in contract authority, followed by Texas with $85 million, Ohio losing $41 million and Pennsylvania close behind at just under $40 million.

In all, Congress rescinded $857 million in contract authority that DOTs had not already obligated by May 31, as an offset for spending elsewhere in the budget. The cuts take place at a time when states continue to hope for a promised infrastructure investment plan from the Trump administration, but also when the president has offered a 2018 budget proposal that would make further cuts in federal transportation spending, presenting a confusing atmosphere.

In addition, according to AASHTO the 2017 rescission could be just a small example of what is to come. The FAST Act included a one-time, $7.6 billion rescission of unused contract authority that will hit state DOTs on July 1, 2020, unless Congress alters that provision.

Joung Lee, policy director at the American Association of State Highway and Transportation Officials, told the AASHTO Journal that a series of rescissions, especially the looming 2020 cuts, could significantly squeeze the state agencies.

“Even the smaller ones this year limit states’ ability to program their federal funds across many categories of the federal highway program,” Lee said. “But the much larger cuts to contract authority coming under the FAST Act, when combined with the most recent action, have the potential to disrupt highway project planning for a number of state DOTs.”

State agencies will have to absorb the cuts proportionally in their nonfederal highway program accounts, including the core formula-apportioned funds DOTs use to help pay for projects on their state-owned road systems and interstate highways, as well as those that fund alternatives such as bike and walk paths.

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