Some questions you may be asking:

(1) Are the funds getting to the States?

(2) Can the States use the additional funds?

(3) Overall, are the States using all of the obligational authority available to them?

(4) What is RABA?

(5) What types of projects are States choosing to fund?

(6) Is the actual cash making its way to the construction industry?

The following pages will walk you through the answers to these questions . . .

Overview

The following table provides a visual overview of the funding situation. Please continue for more detailed explanations and analyses on the subsequent pages.

Note:
-- Obligations, expenditures, and unobligated balances shown above include only funds subject to the FAH obligation limitation.
-- Data derived from FHWA's Financial Management Information System (FMIS)

1. Are the funds getting to the States?
   
   
   • In total for the 6 years of the bill, the Transportation Equity Act for the 21st Century (TEA-21) provides a 40% increase over the funding authorized in ISTEA.
     

     ISTEA	$155 B	(1992-1997)
     TEA-21	$218 B	(1998-2003)

     
     
     
   • States are receiving more money through apportionments and allocations, but the 40% increase represents the change, in total, from one 6-year Act to the next 6-year Act, not from one year to the next.
   • TEA-21 funds authorized to date (through 2002) have been made available - this totals over 80% of all TEA-21 funds.
   
   
   
   
   
2. Can the States use the TEA-21 funds?



• TEA-21 provided corresponding levels of obligational authority to accompany the authorizations. Appropriation actions to date (through FY 2002) have fulfilled the levels set by the Authorizing committees.



• In a given year, States are free to obligate funds up to the limit of available obligational authority.



• Although the obligational authority is lower each year than the total amount of funds available, the funds are available for a 4 year period so that States can obligate them in time to prevent lapse.




3. Overall, are the States using all available obligational authority



• Yes, the States are using their obligational authority - no State has allowed any obligation limitation to lapse.



• What is available?
• Prior to TEA-21, all obligational authority was available for only one year, after which time it would expire permanently if unused.



• New in TEA-21 was a provision to allow obligation authority for certain programs (High Priority Projects, Appalachia, Woodrow Wilson Bridge, Research & Technology, and a portion of Minimum Guarantee) to be carried over at the end of the year.



• Some obligational authority is being carried over.
• Carry over obligation limitation was a new concept for States in TEA-21, and many States are taking advantage of it by first fully obligating the limitation that expires



• Cumulatively, the carryover limitation built up to a total of $3.2 billion by the end of FY 2001, almost 75% of which was for High Priority Projects.



• Another adjustment to the total limitation available for obligation each year, beginning in FY 2000, is Revenue Aligned Budget Authority (RABA). See section 4 for explanation.



• The following chart illustrates the components that make up the total limitation available for obligation each fiscal year:





Note: Transfers to transit are not reflected in the above figures.


• As States adjust their long-range transportation plans to accommodate the promise of TEA-21 funding within the revenues accruing to the Highway Trust Fund, most appear well-positioned to use the funding that becomes available.



• Obligations are increasing - States obligated almost 47% more Federal-aid highway funds (subject to the obligation limitation) in 2001 than in 1998, the first year of TEA-21 -




1998	$19.5 B
1999	$24.7 B
2000	$25.5 B
2001	$27.7 B




4. What is RABA?



• Highway program funding levels are tied to estimates of Highway Trust Fund (HTF) receipts made at the time of enactment of TEA-21, and these levels are adjusted each year to reflect the latest information on HTF receipts.



• Revenue Aligned Budget Authority (RABA) is the annual calculation of this adjustment, and is intended to ensure that highway funding is aligned with actual and anticipated revenue to the Highway Account of the HTF



• RABA calculation is not driven by policy, but rather is determined by formula.



• In total for FYs 2000-2002, RABA has provided an additional $9 billion in highway funding.



• Due to the recent economic slowdown and current projections of future HTF revenues, we will experience in FY 2003, for the first time, a downward adjustment of TEA-21 projected funding levels.



• The following table illustrates the impact of RABA on the Federal-aid highway program








5. What types of projects are the States choosing to fund?
   


• Over half of the TEA-21 funds authorized were for core Federal-aid Highway (FAH) program catgories:
• National Highway System (NHS) $28.6 B
• Interstate Maintenance (IM) $23.8 B
• Surface Transportation Program (STP) $33.3 B
• Bridge Replacement & Rehabilitation $20.4 B
• Congestion Mitigation/Air Quality Improvement (CMAQ) $ 8.1 B



• TEA-21 provides flexibility to fund a variety of activities, including transfer provisions for transit. In 2001, States used about $1.3 billion in FAH funds for transit alternatives.



• A total for FAH obligational authority is distributed to each State in proportion to the amount of funds they receive. Within that total, the State can use their obligational authority on the programs and projects that they feel best meet their individual needs and priorities.

Exception - additional obligational authority that is distributed, as required by law, specifically for certain programs (i.e., High Priority Projects, Appalachia, Woodrow Wilson Bridge), can only be used for the intended purpose.


• All funds have been obligated in every program category by the end of their period of availability - no funds have lapsed



• Obligations (of apportioned funds) for the first 4 years of TEA-21 (1998-2001) indicate that States continue to focus on "core" highway improvements.




NHS	19.0 B
IM	$14.1 B
STP	$25.7 B
Bridge	$10.2 B
CMAQ	$ 3.6 B
Subtotal	$72.5 B
Other	$18.3 B
Total	$90.8 B







• Further, for new projects authorized in a given fiscal year, States are using available funds for the following types of improvements






Note: "Other" in above charts includes certain other FAH programs not otherwise included, such as Safety/Traffic Operations/TSM, Environmentally Related, Highway Planning & Research, Metropolitan Planning. Data from (Highway Statistics 2000 (Table FA-10)



6. Is the actual cash making its way to the construction industry?
   
   
• Yes - both obligations and expenditures have increased as a result of TEA-21.



• The payout of FAH funds (expenditures) increased by almost 50% from the 1998 level of $17.4 billion to a level of $25.9 billion in 2001.



• Actual spending, in the form of cash outlays, doesn't correspond directly to the obligation of funds because of the slow (9 year) spendout rate for FAH projects, as illustrated in the following table: