Congress must give permission for federal funds to be expended. Transportation authorization legislation is, primarily, the mechanism by which this permission is granted. Authorization legislation establishes transportation policy and areas of emphasis for spending by creating and defining programs and authorizing funding. The funding mechanism, including the various user fees, is established. Authorization legislation covers multiple years because transportation projects require a long time from planning through construction.
The current multi-year surface transportation authorization act, the Fixing America’s Surface Transportation Act (FAST Act), was signed Dec. 4, 2015 (Pub. Law 114-94). In general, the FAST Act left existing programs intact, and maintained FY 2015 investment levels until Sept. 30, 2020, with small increases for inflation. As mentioned above, these investment levels have been made possible by supplementing Highway Trust Fund revenue with transfers from the General Fund and other sources such as the Leaking Underground Storage Tank Fund and the Federal Reserve surplus account; revenue from the sale of some crude oil reserves; and savings and increased revenue from changes to certain taxes and penalties, etc. In some cases, ten years’ worth of savings and increased revenue are harnessed to pay for the six-year bill.
On Oct. 5, 2018, the president signed a bill reauthorizing federal aviation programs and funding until Sept. 30, 2023. Public Law 115-254 provided $97 billion, including $16.8 billion for the Airport Improvement Program ($3.35 billion per year, consistent with several previous years).
On Dec. 20, 2019, the president signed HR 1865, an eight-bill appropriations package providing full-year funding for FY 2020 for USDOT and most other federal agencies. For USDOT, the bill provided authorized levels of formula obligation: $46.365 billion for highways, $10.15 billion for transit, and $3.35 billion for the Airport Improvement Program. However, another piece of legislation passed by Congress in July 2019, the Bipartisan Budget Act of 2019, raised the spending caps for the year. Consequently, in many program areas the omnibus supplemented the authorized amounts with General Fund dollars. Examples of these increases include: an additional $2.2 billion for highways, bridges and certain other projects, an additional $510 million for bus projects, and an additional $400 million for discretionary grants to airports.
Distribution of funds
Most federal funds are distributed to state and local officials based on formulas. For example, Iowa receives funds to maintain the interstate system based generally on the state’s share of the nation's interstate vehicle miles traveled and interstate lane miles, while urban planning funds are based on our share of the nation's urban population. Funds for improving our airports are based on the number of passengers, population, and geographic area of the state; and a portion of the five-year capital improvement plan for general aviation airports. Transit funding is based in part on transit ridership. These formula funds are called apportionments. Other programs have no mandatory distribution formula, so distribution is based on competitive applications or another project selection process. These funds are called allocations. In general, as a condition of receiving federal funding the state or local jurisdiction is required to provide matching dollars. The most common matching requirement for formula programs is twenty percent, but the rate can be as low as zero percent or as high as fifty percent.
Formula transportation funding for Iowa
The following table identifies the level of federal FY 2017-FY 2018 formula funding received by Iowa for state and local projects and activities.
||% of national
||% of national
|Highway formula funds
|Transit formula funds
For additional information, please contact Susan Wallace in the Strategic Communications and Performance Division,
515-239-1838 or, for specific funding program information, review the Iowa DOT's