Short Answer: No money is being lost or returned.
Short Explanation: Congress “appropriates” less money than government is “authorized” to spend. States have great freedom to allocate the appropriated funds among different programs. States typically use as much as they can for roads. Massachusetts has the dubious honor of spending the lowest percentage of any state or territory of its Transportation Enhancements (TE) authorization and other programs typically used for bike/ped facilities.
For bike/ped-favoring programs such as TE and Congestion Mitigation/Air Quality (CMAQ), the disproportionate allocation process creates an “unobligated balance” between the authorized ceiling and the obligated (to be eventually spent) amount. This “authorized-to-obligated” gap accumulates every year. Every now and then, Congress cleans up the books by “rescinding” some of the unobligated amounts. States have great freedom in deciding which programs’ unobligated balances are used for the rescission – they typically use the bike/ped programs for this purpose.
Short Conclusion: Unless state priorities change, the fact that bike/ped programs were under utilized in the past is a good indication that they will be under utilized in the future – so loosing the old balance may be aggravating, but is unlikely to make much difference in actual spending.
Short Call To Action: We need to push states to use more of their appropriated federal transportation funds for programs funding bicycle and pedestrian facilities and off-road paths to avoid creating the large unexpended balances that set the stage for disproportionate rescissions.
But all this just scratches the surface of the story. Every now and then word begins to circulate that the Feds are “rescinding” billions of dollars in many different spending areas, including transportation. Emails start sending warnings that funding for bicycle and pedestrian programs is being reduced and that people should contact Washington to protest The League of American Bicyclists, Bikes Belong, and others have said that “At the very least, rescissions should be fair and proportional. All funding programs should receive equal consideration to others: they should be spent proportionally and rescinded proportionally. Programs favorable to bicycle and pedestrian projects should not be targeted more than others.” See: http://www.advocacyadvance.org/site_images/content/Rescissions_FAQs.pdf
While every opportunity to demand modal equity is worth taking, fighting rescissions is focusing too late in the process. The cows are already out of the barn. At both the federal and state levels we need to move “upstream” and demand policy changes that make bike/ped projects more likely to be funded in the first place.
We need to protest, to advocate, to partner. But we need to understand what’s going on so we can use our limited advocacy resources in the most efficient manner.
Authorization, Appropriation, and Allocation:
Every year (in some cases, every few years), Congress authorizes a certain amount of spending. They set an overall “authorization ceiling” as well as specific authorization ceilings for broad areas (such as transportation) and even program areas within that issue (such as the Surface Transportation Program, mostly used for roads, and Transportation Enhancements, which is a major source of funding for bike/ped facilities).
But no one actually gets to spend the full authorization ceiling. Rather, Congress then “appropriates” the actual total available to be “obligated” (and eventually spent) in that year or period – and this appropriated amount is (almost) always lower than what was authorized. In transportation, each state’s authorization/obligation ceiling is what they are actually allowed to spend in that time period.
However, in the name of flexibility and state’s rights, each state is relatively free to allocate or divide up the total appropriated amount for a broad area (e.g. transportation) among the various programs and subprograms in any way it wants. Except where explicitly required by Congress to do otherwise, a state can use as much (or as little) of its allocation as it wants for any particular program or subprogram — up to the “authorization ceiling” for that program or subprogram.
Key Fact: Almost every transportation program, including the Surface Transportation program (STP), can be used to fund bike/ped facilities in some way. Under the federal and state Complete Streets policies, every road should have the maximum feasible accommodations – including things such as wide sidewalks, buffered bike lanes, and protected bike parking spaces. But nothing is technically out of bounds — including (in addition to TE, CMAQ, and STP) High Priority Projects (HPPs), Safe Routes to Schools
(SRTS), Recreational Trails Program (RTP), Highway Safety Improvement Program
(HSIP), Section 402 State and Community Highway Safety Grant Program. See
Unobligated Balances and Rescissions:
Since the total authorization amount for all transportation programs added together is higher than the appropriated amount, if a state allocates the full authorization amount for one program it means that there will be a lot less available to be allocated to other programs. For example, almost every state spends its full authorization for highways and roads. This means that almost every state spends a lot less than the authorized amount on programs typically used to fund bike/ped projects – Massachusetts is simply the most embarrassing example. The impact of these choices is multiplied by the fact that road programs (e.g. STP) are much larger than the bike/ped programs to begin with.
For those less favored programs, this creates a “gap” between the annual authorization ceiling and the amount actually spent (or *obligated* to be spent) in those other programs.
Key Fact – in most cases, the entire amount that the state is appropriated is spent — nothing is left “on the table” or returned to the feds.
Over years, assuming that the same pattern of lopsided allocation/obligation continues, the unobligated balance – the gap between the authorized ceiling and the actually obligated amount – continues to grow in the less favored programs.
This is where rescissions come into the picture. Accountants and budget makers do not like the kind of lingering “authorization to spend” that very large “unobligated balances” create. In addition, any state that lets a gap grow year after year after year is clearly saying that it really isn’t interested in spending for the underfunded programs.
Key Fact: a state could, if it wanted to, make up for past underfunding by allocating more and more of its future overall authorization total to those historically neglected programs — up to the full amount of the historically accumulated gap. This flexibility was built into the law to allow states to use an unusual percentage of their funds for short-term special projects and then make it up as they go forward.
So every now and then the feds demand that states cancel (or “rescind”) some amount of their long-term authorization-to-obligation gap. The total rescission amount is distributed among the States in the same proportion as the funds subject to the rescission were apportioned to the States for some appropriate fiscal year. (For the text of the federal announcement, see http://www.bikeleague.org/blog/2010/08/return-of-rescissions/)
Disproportionate Impact and Advocacy Priorities
It should not be surprising that most states tend to assign most of their required rescissions to the programs with the biggest unobligated balances — meaning those of least value to car traffic. This means that most states disproportionately use Transportation Enhancement (TE) and Congestion Mitigation/Air Quality (CMAQ) programs for rescissions: while those two programs received 7.3 percent of federal appropriations, they were the source of 44 percent of the 2010 rescissions.
But this is really only a paper cancellation of a future possibility — the elimination of the ability to divert huge amounts of future transportation money from historically favored programs into the historically disfavored ones. In fact, it is unlikely that states would ever allocate that much money to these programs. So the loss of the possibility of such an equalizing allocation is mostly irrelevant.
Of course, it worth taking advantage of every possible opportunity to demand modal equity. But rescissions aren’t really the issue. We need to find ways to make bike/ped projects more likely to be funded in the first place. And we need to find long-term, equitable ways of funding the needed improvements and transformation in our transportation infrastructure while encouraging a shift to more sustainable and safe vehicles.
For More About Rescissions:
Or check the National Transportation Enhancements Clearing House to get a state profile about authorization, obligation, and rescission amounts: www.enhancements.org/Stateprofile.asp
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