DALLAS – More than $1 billion of federal highway funding that should be going to states in fiscal 2017 is in limbo unless lawmakers can agree on a transportation budget for the current fiscal year.

Allocations to states set out in the five-year, $305 billion transportation funding measure enacted in late 2015 have been frozen at fiscal 2016 levels by a continuing budget resolution approved last year by Congress.

States could lose $1 billion of federal transportation funding in 2017 unless a budget dispute is settled soon. VaDOT

States could lose out on $869.4 million in fiscal 2017 formula funding for highways and another $159.4 million of grants and other funding, a total of $1.03 billion, according to an analysis by the America Association of State Highway and Transportation Officials.

The current budget resolution will expire April 28. Congress may have to adopt another, shorter extension to buy time for progress on the budget front.

Allocations to states in fiscal 2017 provided by the Fixing America's Surface Transportation Act should total $36.56 billion but the continuing resolution's funding freeze would whittle that down to $35.69 billion, AASHTO said. Grants and special programs in the FAST Act total $6.7 billion in 2017 but the continuing resolution freezes those at the $6.54 billion authorized in fiscal 2016.

States have not received their full 2017 allocations because Congress adopted a continuing resolution in September to keep transportation funding flowing to states into December after failing to agree on a fiscal 2017 budget. Lawmakers in December extended the resolution and the funding freeze until April.

The Senate approved a fiscal 2017 transportation budget in May 2016 with $56 billion of highway and transit funding from the FAST ACT. The House Appropriations Committee approved a fiscal 2017 transportation budget measure a week later that incorporated the FAST Act funding.

The freeze also affects a $400 million increase for federal transit funding in fiscal 2017 that now cannot be touched. The FAST Act also provided $199 million in 2017 to help fund the installation of crash-prevention equipment on commuter and passenger rail lines.

The highway funding formula means that every state's allocation is different but in each case the frozen money would have been enough to launch projects during the spring 2017 construction season, said AASHTO policy director Joung Lee.

"Particularly for states in northern areas with short construction seasons, not having their full federal funding assured by late April makes it harder for them to put federal funds to work," he said.

"This really adds up for state transportation departments, and is now starting to cause headaches for some that face tight deadlines to wrap up their 2017 project budgets and lock in construction contracts," Lee said.

Failure to provide the FAST Act allocations could reduce federal road funding to Texas in fiscal 2017 by $82.7 million, California by $80.7 million, Florida by $42.2 million, and New York by $37.8 million, according to the AASHTO analysis.

The Transportation Department also has not yet acted on applications from states for $850 million from a grant program aimed at funding freight-moving projects of regional or national significance. Applications for the 2017 round of Fastlane grants established by the FAST Act were due in by mid-December.

The 2016 round of the annual grants provided $759.2 million for 18 projects in 15 states and the District of Columbia. The 212 applications sought grants totaling $9.8 billion.

The funding freeze is expected to be an issue at Wednesday's session of the House Transportation and Infrastructure Committee's highway panel. The lawmakers will hear about state and local implementation of the FAST Act from Oklahoma DOT executive director Michael Patterson representing AASHTO, Dallas Area Rapid Transit president Gary Thomas speaking for the American Public Transportation Association, and Atlanta Mayor Kasim Reed representing the U.S. Conference of Mayors.

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