Friday, November 13, 2009

Feast and Famine

Roberta Broeker is MoDOT's chief financial officer. Her post today clarifies MoDOT's current state of funding and why there are challenges ahead.

This year has been both feast and famine in federal transportation funding. In February, the President signed the American Recovery and Reinvestment Act. At a national level, it’s a massive bill totaling $787 billion dollars. Of that, $48 billion was allocated to transportation. When you crank through the math, $788 million of additional transportation dollars came to Missouri. That was broken up into $525 million to the Commission to administer (about two-thirds of the federal funds we receive in an average year); $93 million sub-allocated to the Kansas City, St. Louis and Springfield metropolitan planning organizations; $19 million for transportation enhancement projects, the bulk of which we divvied up around the state and let our local planning partners pick the projects; and $151 million to other transportation modes.

We worked fast and furious to select projects and get the federal funds obligated, because the time lines imposed by the bill were short AND because the goal was getting people back to work.

Fast-forward to September 30 and the end of SAFETEA-LU, the multiyear bill that apportioned and controlled federal transportation spending across the nation. Built into SAFETEA-LU like a ticking time bomb was an $8.7 billion rescission of federal funds. What does that mean? The bill starts out telling states how much money is apportioned to them over the life of the bill, but then also the increments in which we’re allowed to “obligate” it to specific projects. It’s a way of managing the checkbook at the federal level, preventing states from spending all their money in the early years of the bill.

There was widespread speculation that before September 30, 2009 arrived, Congress would do away with the rescission, and let states have that money to build projects. Ultimately, that didn’t happen. For Missouri, that meant $202 million of potential projects were wiped off the books. We didn’t have to cancel any projects because we were allowed to parcel the rescission among the programs where there was still a difference between the amount originally apportioned to Missouri and the amount we’d already obligated to specific projects.

But in that unobligated difference were a world of possibilities. As I’ve read newspaper stories from around the state, local officials have commented on bridges that will be delayed for a year or more, and the need to regroup and figure out how to get planned projects off paper and make them reality.

As if that weren’t bad enough, the “continuing resolutions” Congress has passed to keep the federal program operating after SAFETEA-LU’s expiration have made finances even tighter. Continuing resolutions aren’t anything new. After the previous federal bill expired in September 2003, we had twelve continuing resolutions before SAFETEA-LU passed in August 2005. But they gave states slightly more money than in the expired bill. Due to the fiscal year 2009 rescissions, the two continuing resolutions we’ve had so far (one for the month of October, and a second one that runs through December 18) have given us federal funds not at the SAFETEA-LU level, but at that amount less rescinded amounts. So when you compare federal funds available for the first 75 days of this federal fiscal year to what we expected (level funding from last year), MoDOT and local planning partners have $57 million less available to obligate than we planned. That’s a difference of 30 percent.