While federal highway spending authority is established by multi-year transportations bills like SAFETEA-LU, each year Congress must enact a transportation appropriations bill setting overall spending levels for a given fiscal year. Authorization bills like SAFETEA-LU provide contract authority via formula for each state’s highway program. Appropriation bills provide obligation authority for states to allocate as they wish among the federal highway core programs (i.e., National Highway System, Surface Transportation Program, Bridge, and Congestion Mitigation Air Quality). 

It is also important to note that states always receive more contract authority than obligation authority and every highway project must receive equal amounts of each to proceed to construction. Therefore, the appropriation bill acts as a limit on how much each state may spend.   

For fiscal year (FY) 2010, three pieces of the legislative puzzle must fit into place for state transportation departments and highway contractors to fully know the size of the publicly funded highway market. The federal share is about 45 percent of the total publicly funded highway market, not counting economic stimulus funding. 

The three legislative items that must fall in place are:

     1. Passage of the FY 2010 transportation appropriations bill.
     2. Passage of an extension of SAFETEA-LU or a new multi-year authorization bill.
     3. More revenues or transfer of general funds to the Highway Trust Fund.

Congress recently enacted legislation transferring $7 billion from the general fund to the Highway Trust Fund, and it is currently estimated that these funds will allow FHWA to honor all commitments to the states for their highway projects through June 2010.  Any short-term extension of SAFETEA-LU or multi-year surface transportation authorization will require more revenues or transfer of general fund dollars.

NAPA has prepared a quick guide on solving the 2010 funding dilemma. This guide will be updated as new developments occur. 

Assuming that all the pieces fall in place, here is a chart showing each state's funding for 2009 and projections for 2010.