Construction industry officials have found much to like in the new Fixing America’s Surface Transportation Act, not the least because it was signed into law, extends for five years and is fully funded. But one negative note was the law’s deep cut in the TIFIA loan program, which has provided critical financing for major highway, transit and other projects, including those involving public-private ventures.

The FAST Act slashes direct funding for TIFIA—the Transportation Infrastructure Finance and Innovation Act—by 73%, from 2015’s $1 billion to $275 million in fiscal 2016 and 2017. The amount rises to $300 million in 2019 and 2020. Each direct TIFIA dollar supports an estimated $10 in loan volume.

“It’s definitely very disappointing,” says Cathy Connor, WSP | Parsons Brinckerhoff senior vice president for federal government affairs. “I think that the general consensus is that $275 to $300 million is too low. We were hoping to see something in the $500-million range.”

Jay Farrar, manager of Bechtel’s Washington, D.C., office, says, “What’s difficult with that [reduction] is, already TIFIA is oversubscribed.” The Dept. of Transportation reports that it has 15 TIFIA applications filed in FY 2015 still pending, for projects totaling $15.5 billion. Many more applications filed before 2015 are awaiting a DOT decision, too.

David Bauer, American Road & Transportation Builders Association senior vice president for government relations, says the TIFIA cutback will have “a significant impact on the overall transportation construction marketplace.”

The effects of the cut won’t become clear for weeks, at the earliest, but Bauer points to the 17-year-old TIFIA program’s recent history as a possible guideline. In the FY13-14 period, when TIFIA funding reached a combined $1.75 billion, DOT closed 19 loans for projects whose cost totaled $35.8 billion. In FY10-11, when TIFIA funding was just $122 million per year, DOT approved six applications for $6.7 billion in projects.

The FAST Act does make more types of projects eligible for TIFIA assistance, including rural and transit-oriented development projects of at least $10 million. Bauer says, “How all of that [is] going to play out remains to be seen.”

DOT had sought big numbers for TIFIA, proposing $1 billion a year over six years in the revised GROW AMERICA bill, announced in February. Asked for comments about the FAST Act’s TIFIA provisions, a DOT official said via email, “We will work aggressively within the contours of the bill to expand the pipeline of innovative projects using a variety of funding and financing mechanisms.”

DOT didn’t provide specifics. But Connor cites FAST’s new “nationally significant freight and highway projects” program, funded at $4.5 billion over five years. That program is aimed at projects of $100 million or more. She says, “These are the types of large projects that would potentially be procured using public-private partnerships.”

The new law also says that TIFIA money that DOT is unable to obligate in a given year will stay in the program and be rolled over for future years’ commitments.

That’s a big change from an earlier use-it-or-lose-it requirement, which was triggered in April, when DOT was forced to reallocate $639.9 million in uncommitted TIFIA to the states—not in the form of TIFIA loans but as regular formula highway aid. n By Tom Ichniowski