Congress floats 2024 transportation spending plan with nips and tucks

Fiscal 2024 transportation funding would remain essentially flat to the previous year under a bipartisan spending bill unveiled Sunday, with a few cuts to grant programs that President Joe Biden had hoped to fund.

The full six-bill “minibus” totals $465 billion, and if passed by Friday would fund the federal agencies through the remainder of fiscal 2024. The deal comes a week after Congress passed a week-long funding extension, its fourth of 2024, nearly six months into the fiscal year.

Congress still faces a March 22 deadline to reach a deal for the remaining government agencies that will see their funding expire on March 22.

Local issuer advocates like the National Association of Counties urged Congress to hammer out long-term funding. “Nearly a third of county revenue comes from intergovernmental sources, so our ability to plan and execute effectively on our responsibilities hinges not only on the availability of federal funding, but also its reliability,” said a NACo spokesperson.

The partial spending plan is coming together as President Joe Biden is expected to highlight the importance of infrastructure during his State of the Union address on Thursday.

The U.S. Department of Transportation would see $106.4 billion in 2024 under the proposal. That includes annual Highway Trust Fund spending, and is on top of $37 billion in advance appropriations under the 2021 Infrastructure Investment and Jobs Act.

Ahead of the bill, state departments of transportation last week warned that a technical issue with the timing of Highway Trust Fund appropriations is becoming a major problem that could spark a “potential lapse” of IIJA highway funds before the Sept. 30 fiscal year end.

The so-called August redistribution occurs when non-formula highway funds authorized in the annual appropriation bill are not fully tapped, and to avoid losing the dollars, the Federal Highway Administration redistributes the money among states. In addition to forcing states to scramble to obligate the money within as tight a window as 30 days, the move eats into the amount of formula funding at the start of the following fiscal year, according to the American Association of State Transportation and Highway Officials, which represents state DOTs.

This year’s redistribution is expected to total $8.5 billion, roughly 15% of annual state DOT highway funding, AASHTO said in a Feb. 26 letter to Congressional leaders.

“State DOTs have reached a point where it will be extremely difficult—if not impossible—to obligate $8.5 billion in just 30 days this summer,” the letter said. “If a legislative fix is not enacted, we believe that federal highway funding faces a potential lapse at the end of this fiscal year. AASHTO and USDOT agree that we must avoid such an outcome, which would essentially rescind previously authorized dollars from the IIJA and result in less federal transportation investment than was envisioned by Congress when the bill was enacted.”

The draft DOT budget includes $345 million for the popular RAISE grant program that goes to state and local transportation projects. That’s on top of $1.5 billion from the IIJA, bringing the program’s total for the rest of 2024 to $1.845 billion.

Transportation appropriations total about $1 billion less than Biden requested in his 2024 budget proposal, and did not fund his $100 million request for the Thriving Communities grant program, which goes to disadvantaged areas.

The Federal Transit Administration will receive about $16.6 billion, according to the Senate Appropriations Committee. When combined with $1.6 billion in IIJA advanced appropriations, the FTA’s critical Capital Investment Grants program total is $3.8 billion. That’s “sufficient to fully fund all projects with full funding grant agreements and those expected to enter into a grant agreement this year,” the committee said.

The 2024 package also includes funding for 6,630 individual projects totaling $12.7 billion. The Environmental Protection Agency faces the largest cut, at around 10%, most of which will come out of its Superfund program cleaning up contaminated sites. The program will still see significant funding from the IIJA.

Senate Appropriation Committee Chair Sen. Patty Murray, D-Wash., said the six-bill 2024 appropriations package “sustains critical investments as Democrats rebuild America’s infrastructure and keep our country moving forward.”