FHWA Parcels Out $59.9B in IIJA Formula Funds

The newly distributed funds come through 12 Federal Highway Administration programs, nine of them created by the IIJA.

Graphic by Scott Hilling/ENR

In the first major release of funds for year two of the Infrastructure Investment and Jobs Act, the U.S. Dept. of Transportation has distributed $59.9 billion in highway and bridge funds that are parceled out by formulas among the states.

In announcing the action on Oct. 11, DOT Secretary Pete Buttigieg told reporters in a briefing that the newly distributed funds come through 12 Federal Highway Administration programs. Some were created by the 2021-enacted law. Others are carry-over programs launched before it was signed.

The largest share of the total is $53.5 billion for formula highway funds, a core program for FHWA, state DOTs and industry.

The second-largest program is the formula bridge category, with $5.3 billion.

Buttigieg said that the dozen programs “ensure that different priorities are met—for example, roadway safety—but they still give states a high degree of flexibility to meet their unique needs.”

State and industry officials welcome the announcement from FHWA, but there are still awaiting further information from the agency about the $53.5 billion in formula highway apportionments for fiscal 2023.

Susan Howard, American Association of State Highway and Transportation Officials director of policy and government relations, says, “I thinks states are looking forward to the continued opportunity the second year of funding provides to invest in a lot of great projects" nationwide.

'Complication' from the CR

But Howard said in an interview that there is a "complication" for the highway funds due to the recently enacted stopgap continuing resolution, or CR.

The CR only extends through Dec. 16 and thus does not set a full-year 2023 limit on how much of the just-apportioned highway funds states can actually obligate for projects.

Howard says, “The ability to draw down and obligate against that [apportionment] has not yet been provided, because we don’t have a fiscal year 2023 appropriations bill.”

A full-year 2023 appropriations measure is unlikely until after the Nov. 8 elections.

That means that state DOTs and engineering and construction companies that rely on federal highway work will have to wait to see the impact of the increased funding the IIJA authorizes for 2023.

In the meantime, states and industry are awaiting a further notice from FHWA spelling out an obligation limit for the period through Dec. 16, when the CR lapses.

That information, which will have a state-by-state breakdown, is expected soon. It will be a pro-rated share of the 2022 obligation ceiling.

Jay Hansen, National Asphalt Pavement Association executive vice president for advocacy, says that that part-year share is limited to about $12 billion. In comments emailed to ENR, Hansen said he expects the FHWA notice to be issued shortly.

Howard recalls that in late 2021 and early 2022, the situation was similar. The IIJA was enacted on Nov. 15, but no highway obligation limit was in place until April, when an omnibus appropriations measure finally cleared Congress and was signed into law.

This year, in a further wrinkle, Hansen says that the IIJA'a just-announced $5.3 billion for the formula bridge program, $885 million for electric-vehicle infrastructure and $250 million for the Appalachian highway program do not require further appropriations.

States do not have to wait for full-year appropriations to obligate funds for projects in those programs.

Those three categories’ combined annual funding remains flat over the IIJA’s five-year life.

Rollout of IIJA Continues

Mitch Landrieu, the White House infrastructure implementation coordinator, said in the briefing that with the IIJA's first anniversary about a month away, federal agencies have made "unbelievable strides" in rolling out the law's programs and funding.

Landrieu, a former mayor of New Orleans, said, "We're pushing money out the door. We're turning dirt on projects all over the country."

Buttigieg noted that the $60 billion total distributed represents a $15.4-billion increase over the level for fiscal 2021, the last year before the IIJA became law.

Lame Duck Session

Looking ahead, Hansen says, the next question for full IIJA highway funding is what might happen in a post-election lame duck session. "And that depends on the outcome of the midterm election."

He says, "If Congress can pass an omnibus [spending package] in the lame duck, it would be great and there would be no impact on states planning for projects."

But Hansen adds, "On the other hand, if this [spending] legislation is kicked into the new Congress, it would introduce uncertainty and that is never good for the state agencies or contractors planning for next year."

Number of new IIJA programs corrected on 10/12/2022

Tom Ichniowski has been writing about the federal government as ENR’s Washington Bureau Chief since the George H.W. Bush administration, and he has covered at least five major highway bills. A recognized expert on government policy on infrastructure and regulation, Tom is also a Baltimore native and Orioles fan who grew up rooting for Brooks and Frank Robinson. He is a graduate of Columbia College and Columbia’s graduate school of journalism, where he once used “unrelentless” in a headline.

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