State departments of transportation have passed their first “use it or lose it” test under the American Recovery and Reinvestment Act, obligating half of their highway stimulus funds at least 10 days before the June 29 deadline set under the economic-stimulus statute. In another positive sign, the number of ARRA highway and transit project starts has climbed sharply, but critics point out that actual outlays remain small.

ARRA required states to obligate—commit to specific projects—at least 50% of their highway stimulus allocations by June 29. If not, the unobligated portions would revert to U.S. DOT to be redistributed to other states.

But no redistribution will be necessary. “Every state not only met the 120-day deadline, they beat it,” says DOT Secretary Ray LaHood. Maine was the first to hit the 50% mark, reaching the goal on March 6, just 17 days after ARRA was signed into law. Hawaii was the final state to meet the requirement, achieving the benchmark on June 19. One more deadline remains for state DOTs: They must obligate the remaining 50% of their highway funds by March 2, 2010.

The Obama administration said on June 25 that $19 billion of ARRA funds has been obligated for more than 5,300 transportation projects. The Federal Highway Administration is the pacesetter at DOT. As of June 22, FHWA had authorized more than 5,000 projects and obligated $15.7 billion, Jeffrey Paniati, acting deputy administrator, told the House Transportation and Infrastructure Committee.

Beside committing funds, states are making headway in getting ARRA road projects under contract and under construction. House transportation committee Chairman James Oberstar said at a June 25 hearing that, based on reports through May 31, 4,098 ARRA highway and transit projects had been out to bid. He added that 2,294 of those, totaling $6.5 billion, were under contract. Of projects under contract, work had begun on 1,243, with a total value of $4.4 billion. The numbers of projects under contract and under way were more than twice the figures reported on April 30.

For highways and transit, Oberstar said, “I am confident that this program is off to a fast start, a good start.” But he noted other sectors, such as Corps of Engineers civil works and Environmental Protection Agency wastewater-treatment funding, are running behind transportation’s stimulus results.

Committee Republicans issued a report showing that of DOT’s $48.1 billion in ARRA funds, only $369 million had turned into actual outlays as of June 19. The panel’s top GOP member, John Mica (Fla.), said, “Folks, that is just pennies on a dollar, fractions of a penny on a dollar of what we have made available.” Mica blamed “government red tape” for the delays in getting projects to market.

Oberstar said ARRA highway and transit projects under way have added or saved about 21,000 direct jobs on sites, plus “thousands of indirect jobs” at materials companies and equipment makers. Still, he noted construction lost more than 1.2 million jobs between December 2007 and May 2009, saying “There is much work left to be done.”

The Federal Aviation Administration awarded $725 million, or 66%, of its $1.1 billion in ARRA airport-grant funds by June 17, said Administrator Randolph Babbitt, topping ARRA’s mandate for FAA to award 50% of the aid by then. The Federal Transit Administration has obligated more than $1.7 billion of its $8.3 billion in stimulus aid, said FTA chief Peter Rogoff.