AASHTO Journal - AASHTO Shares Redistribution Concerns with FHWA

The American Association of State Highway and Transportation Officials recently expressed its concern regarding “increasingly large” annual redistributions of Highway Trust Fund obligation limitation to state departments of transportation each August due to the “narrow timeframe” for allocating that funding.

[Above photo by AASHTO]

This “redistribution” occurs late in the federal fiscal year when HTF’s “allocated programs” – federal programs for national purposes separate from formula dollars to states – do not fully use their share in that year; money that is subsequently redistributed to state transportation agencies across the country.

“In the most recent cycle, August Redistribution reached a record high of $6.2 billion for fiscal year 2022, which represents a substantial increase from $1.9 billion in FY 2015,” AASHTO said in a letter sent January 6 to the Federal Highway Administration.

“Such a large redistribution created significant difficulty due to the very narrow timeframe of about a month for state DOTs to effectively program these dollars before the end of the federal fiscal year,” the organization noted.

In addition, AASHTO pointed out that “carryover balances” from allocated programs have grown larger due to increased funding from the $1.2 trillion Infrastructure Investment and Jobs Act or IIJA enacted in November 2021.

“These developments have led to state DOTs seeing a corresponding and relative decrease in their amount of formula obligation limitation at the beginning of the fiscal year, which deprives them of the time window which would otherwise better enable them to strategically deploy IIJA dollars throughout the full fiscal year,” the organization noted in its letter.

“In order to make the most out of the historic transportation investment made under the IIJA, we request that FHWA inform state DOTs at the beginning of each federal fiscal year regarding the amount of carryover balance for every allocated program, and provide a monthly update of these balances for the remainder of the fiscal year,” AASHTO said.

“This information will help state DOTs to better optimize their programming of federal dollars throughout the year, including their ability to plan for larger August Redistribution amounts,” the organization added.