The Federal Highway Administration (FHWA) has announced how it will potentially distribute $2.1 billion of previously earmarked but unused or “orphan” highway project funds. California is eligible to receive $126.1 million—and federal-aid highway funds can typically be used for any infrastructure program, not just highways or roads.
The unused funds were set aside for projects originally authorized as far back as 10 years ago. Brian Deery, senior director of the Associated General Contractors of America’s highway and transportation division, said there are several reasons why earmarked funds go unspent. He said an earmarked project may not be a state priority, project plans may change, or the set-aside amount might not be enough to perform the work.
The 2016 omnibus bill, which called for the disbursement of unused funds, included the condition that the money be used on projects within 50 miles of the original earmarked ones. States must decide which projects will get the newly available funds within three years.
FHWA has also announced that they also have another $3.3 billion for projects that have more than 10% of their money obligated and that are ineligible for a piece of the $2.1 billion.
The soon-to-be-released funds are above and beyond the funding increase in December’s five-year, $305-billion Fixing America’s Surface Transportation (FAST) Act. The extra cash “is really a shot in the arm,” said Jay Hansen, National Asphalt Pavement Association executive vice president. “On top of the FAST Act, this is icing on the cake.”
For a cash-strapped California, the extra funds would be a welcome infusion for infrastructure projects. Nearly 225 transportation projects in California are on the verge of being axed or severely delayed because low oil prices have resulted in a huge deficit in gas tax revenue of $1.1 billion. And it’s gas tax revenue that funds highway projects in California.