The American Association of State Highway and Transportation Officials sent a 30-page paper to the U.S. Department of Transportation on April 1 outlining a host of implementation recommendations for the $1.2 trillion Infrastructure Investment and Jobs Act or IIJA enacted in November 2021.
[Above photo by the Louisiana DOTD]
AASHTO noted in the paper that, as “delivery is paramount” to the success of the IIJA, state departments of transportation “stand ready” to partner with the executive branch of the federal government – including the USDOT – to ensure that the benefits promised by the new bill “will be fully realized” in the coming years.
AASHTO added that the formula programs within the IIJA make state DOTs “the entities best positioned” to achieve the measure’s transportation investment goals. The paper noted that AASHTO and its members greatly appreciate USDOT’s acknowledgment of the notable progress by state DOTs on key policy priorities, including system preservation, safety, climate change and resilience, innovation, equity, and efficient use of federal funds.
“Continuing and reinforcing the longstanding partnership between the USDOT and the states is our best opportunity to achieve outcomes that are fundamentally agreed upon between USDOT and state DOTs,” the organization said in its paper.
To that end, AASHTO’s major implementation recommendations on behalf of state DOTs revolve around managing the funds flowing from the IIJA.
“Mixing three types of budget authority – General Fund advance appropriations, General Fund subject to appropriations, and Highway Trust Fund contract authority – for so many programs, both existing and new, creates financial management challenges for state DOTs and other eligible entities,” the organization noted. “We request USDOT to work with state DOTs to make these ‘colors of money’ as easy to administer as possible.”
Along those lines, AASHTO urged the USDOT continue providing as much advance notification as possible regarding “notice of funding opportunities” or “NOFOs.”
“This is crucial for effective planning, programming, and financing purposes, in addition to collaborating with localities to fund shared priorities,” the association said. “Early notification will aid the rollout within the capacity of the agencies, supply chains, and industry.”
AASHTO emphasized that, where a range of possible legislative interpretations exist, the USDOT should provide interpretations that allow each state to best meet its unique needs – especially when it comes to allocating federal transportation funding.
Those funding issues become more complicated when it comes to the discretionary grant programs, as the IIJA significantly increased both the number of grant programs and their funding levels – programs that often support critical Congressional priorities.
“The efficient and effective delivery of these discretionary programs is critical to the successful delivery of the promises made to the American citizens by our elected leadership,” AASHTO said.
Yet the institutional capacity and resources necessary for eligible recipients to apply successfully for such grants “vary widely,” presenting a significant “equity issue” for smaller recipients looking to compete for and access discretionary grant programs.
“The amount of time needed to launch new discretionary programs could mean that money won’t flow for a year or more,” the association pointed out. “The unpredictability of obtaining a discretionary grant makes it difficult for states and localities to forecast around the availability of these funds, especially since some awards could be extremely large.”
AASHTO added that participation of some 60,000-plus local entities in the grant competition process could dramatically affect the review of applications. On top of that, the investment of significant time and money in the development of grant applications that are ultimately unsuccessful will be a significant obstacle in addition to increased competition.
“Meeting process requirements, project readiness, and the resulting ability to expend grant funding should be considerations in preparing for grant awards and in the timing and deadlines for NOFOs and applying for grants,” AASHTO said. “For successful and timely implementation to occur, cooperation, coordination, and collaboration with the agency responsible for administering the grant is critical prior to award of a grant.”