Editor’s Note: Find the entire Miller report at http://www.millercenter.org/policy/transportation

The Stimulus Runs Dry

No more ARRA funds for new projects (but payouts still going).

It’s over.

All of the $27 billion in Stimulus dollars destined for highways has been obligated. But billions still have to find their way to contractors.

The Stimulus legislation, the American Recovery and Reinvestment Act (ARRA), required that all highway improvement funds be obligated by September 30 this year. According to Federal Highway Administration (FHWA) data, nearly every state met that requirement. And only one state – California – gave back Stimulus money, with $1.67 million of it redistributed to Arizona, Michigan, New York and South Carolina according to the American Road and Transportation Builders Association (ARTBA) analysis of that data.

Only one tenth of a billion remained unobligated at the end of September.

With the deadline passed, states can’t obligate ARRA funds for new projects or transfer funds among projects. Any funds not obligated must now be returned to FHWA. If a Stimulus project runs over its budget, the state can ask FHWA for more ARRA funds. But if approved, those funds have to come from another in-state project, which of course has to have its funds cut to provide the transfer. But as ARTBA points out the over-budgeted existing project must experience “a legitimate cost increase not related to a disputed contract claim or an increase under an escalation clause.”

Because September is the peak of the highway construction season, FHWA outlayed a monthly record of $1.49 billion of ARRA highway funds during the month, bringing total outlays to $13.99 billion for construction work performed, according to ARTBA.

With all ARRA highway investment funds now obligated, ARTBA’s analysis shows state and local government recipients have obligated just under $26.4 billion for 12,932 projects, including 5,322 that have been completed and 6,229 that are under construction. When projects on federal lands and TIGER 1 projects are included, the grand total comes to $27.0 billion obligated for 13,351 projects, says the analysis. At the September deadline, state and local governments in Texas continue to lead in outlays, at $945.2 million, with California second at $847.4 million and Illinois third at $676.1 million. Twenty other states, up from 18 at the end of August, have paid out more than $250 million.

Breaking down the $13.994 billion of ARRA funds by year, ARTBA says $5.612 billion was outlayed during calendar 2009 and $8.382 billion so far during calendar 2010. ARTBA estimates that if outlays during the final three months of 2010 equal the same months of 2009, then total Stimulus fund outlays this calendar year should be about $11.5 billion, which is slightly higher than expected according to data from the Congressional Budget Office. v