TxDOT to Lose $742 Million in Federal Funding

The Texas Dept. of Transportation had to return $742 million to the federal government this fall as part of a $9-billion rescission of highway project programming authority.

That funding would have been part of the FY 2010 allocation, according to the American Association of State Highway and Transportation Officials. Rescissions, or reductions in the funding allotted by legislation, are nothing new.

Historically, rescissions have been flexible, allowing states to decide what spending to reduce. This allows TxDOT to limit its impact on the state’s planned funding levels, Kelli Petras, TxDOT spokeswoman, told Texas Construction.

The language included in the Energy Independence and Security Act of 2007 makes rescissions less flexible, according to TxDOT. States reduce each spending category by a specific amount, including equity bonus category, which is designed to bring each state’s share of highway funding inline with gas-tax dollars. This result is a reduction in Texas’ obligation authority and TxDOT awarding fewer contracts.

Petras says the rescission impacts the state’s planning for the coming year’s projects.

“Planning from right-of-way to environmental studies requires a process that can take three to five years,” Petras says. “That’s what most of this money is spent on,” she adds. “When we do get the obligation authority, we want to be ready to spend the money when we get it.”

With the loss of the funds, fewer contracts will let in FY 2010 and a few planned projects will be hurt, she says. Projects that have been started will be finished, she adds.

“This is like having a trust fund that you’ll get at age 18,” she says. “You haven’t spent it yet, but you’ve planned out how you plan to spend it. Now you can’t have it and it impacts your plans.”