FHWA Issues Order to Rescind $8.7 Billion in State Highway Funds

The Federal Highway Administration (FHWA) has notified states that, as required by SAFETEA-LU, $8.7 billion in budget authority will be rescinded from their unobligated Federal-aid highway balances on September 30, 2009. While for some states this will not have a direct effect, in many states this will result in an actual cut in funding for highway construction projects. Each state will lose budget authority in a proportion that matches its percent of the total highway funds that were provided over the six year life of SAFETEA-LU (FY 2004-2009). Senator Kit Bond (R-MO) attempted to remedy this situation with an amendment in July when Congress was taking action to keep the Highway Trust Fund solvent by transferring $7 billion from the general fund. While there was significant support to correct the rescission problem, it was not acted on and, therefore, FHWA is required to take this action. AGC is working to have this rescission corrected when Congress returns from its summer recess.