DALLAS – States will share a $1.9 billion windfall of old, unused congressional earmarks set aside for defunct transportation projects under guidelines published Tuesday by the Federal Highway Administration.
A provision in the Consolidated Appropriations Act of 2016 (PL 114-113) enacted in mid-December gave states the authority to repurpose the remaining funds if the original earmark was 10 years old and if less than 10% of the allocation has been expended or the project has been closed.
Congress banned the practice of earmarking -- designating specific funding for individual projects -- in 2010. At that point there were more than $13 billion of unexpended earmarks on the books, according to the Congressional Research Service. The $1.9 billion figure represents the earmarks for transportation projects, for which less than 10% of the amount was expended.
The states must notify the FHWA of the new or existing projects to be funded from the released earmarks by the end of fiscal 2016 on Sept. 30. The money must be spent within the state on projects within 50 miles of the original designation and must be expended by the end of fiscal 2019.
"This is a tremendous opportunity for state and local governments to work together to identify their needs heading into the next 30 years," said Transportation Secretary Anthony Foxx. "I encourage these leaders to identify innovative projects that reconnect their communities and increase access to jobs, education, and basic services."
An estimated 1,300 projects have unexpended earmarks, said Jeff Davis, a senior fellow at the Eno Center for Transportation, with more than $10 million remaining for 17 of them.
New York leads the list of recipient states with $207 million of unexpended earmarks, followed by Georgia with $161 million, California with $126 million, and New Jersey with $116 million. Michigan could receive $93.5 million.
The $1.9 billion of unexpended earmarks is actually funding that the states were promised by the 2005 surface transportation bill and its predecessors. But the funds were never received, said Allison Rose, manager of member services for the American Road & Transportation Builders Association.
States were prohibited from rededicating earmarked funds if a project never got under way, if it changed so much that it did no longer complied with the specific earmark, or if the project was completed under budget, she said.
"While allowing states to shift funds from these dormant earmarks to new projects certainly provides opportunities for increased highway construction market activity in the next three years, this action should not be confused with an increase in highway funding," Rose said.
Transportation earmarks came out of funding the states would have received through formula-based highway and transit programs, using up the contract authority and obligation limits in their annual allocations, ARTBA said in an analysis.
"The result of projects that did not move forward was a dilution of construction activity from what would have occurred if all funds had flowed through the core program," ARTBA said.
The earmark provision in last year's omnibus budget bill is similar to those in the Jurassic Pork Act, S. 1544, filed in June 2015 by Sen. Jeff Flake, R-Ariz. Flake's bill would have given state transportation departments a year to expend the funding before it expired.
"Like tyrannosaurus rex, brontosaurus, triceratops, and other terrible lizards of the past, the infamy of many congressional earmarks lives on to this day," said Flake when he introduced the measure. "Billions of dollars sit in federal transportation accounts and can't be moved."
FHWA distributed more than $470 million of unexpended earmarks to states in August 2012 from projects authorized in fiscal 2003 through 2006.
