Posted on April 1, 2022.

A budgetary quirk to a 2015 transportation funding bill is set to slash $7.6 billion to certain types of national transportation funding in 2020, eating into transportation budget baselines in states such as Texas, New Jersey and Pennsylvania by hundreds of millions of dollars.

To help make the final price tag of the 2015 Fixing America's Surface Transportation (FAST) Act more palatable, lawmakers at the time included a $7.6 billion rescission in the bill's text, targeting individual states' unobligated balances. That rescission, set to take effect in mid-2020, essentially allows the federal government to take back nearly $8 billion in highway contract authority.

In Texas alone, more than $960 million in contract authority is at stake, according to the Department of Transportation.

"All 50 states and the District of Columbia will be hurt by the rescission, including close transportation partners of these states," a group of more than 40 transportation associations and related groups, including the American Public Transportation Association and the National Governors Association, wrote in a September letter to congressional leaders. "The planned rescission next summer is already starting to impact project construction, which will delay mobility, quality of life, and economic benefits provided by these projects if unaddressed soon."

The Department of Transportation estimates Texas, New Jersey, Pennsylvania and Illinois stand to be the most significantly impacted by the planned revocation, based on an unobligated balance of contract authority formula, as laid out by the Federal Highway Administration. More than $450 million is at risk of rescission in each of the four states.

"If allowed to take place, the rescission will virtually wipe out all remaining contract authority available to states in core highway formula programs," Jim Tymon, executive director of the America Association of State Highway and Transportation Officials, wrote in a letter last month to a group of Senate party leaders and senior members of transportation-related subcommittees. "It is especially critical to repeal this provision in Calendar Year 2019 because in the worst-case scenario, states may be forced to deobligate existing projects in order to provide the necessary amount of contract authority to be rescinded."

Original Post: https://www.usnews.com/news/best-states/articles/2019-11-14/with-fast-act-transportation-bill-set-to-expire-states-face-large-potential-losses-in-funding

Merchant Policies