As the federal government prepares to close the books on its fiscal year Sept. 30, the Indiana Department of Transportation announces it has invested all $897,920,888.32 in federal highway funds available to Indiana. Funds not assigned to projects by the end of September each year are sent back to Washington, D.C., and shared among all U.S. states and territories.
About federal highway funding
Included in the pump price for a gallon of gas are state and federal fuel taxes dedicated to transportation. While gas prices change often, the federal tax is fixed at 18.4 cents per gallon and the state tax is 18 cents per gallon. Federal fuel tax revenue goes into the Federal Highway Trust Fund, and Congress approves payments from the fund separate from the rest of the federal government. Current federal highway funding levels have been approved through Oct. 29.
The Federal Highway Trust Fund typically reimburses 80 percent of construction project costs and requires 20 percent state or local matching funds. The Federal Highway Administration will reimburse up to 90 percent federal funds on safety or interstate highway projects.
Federal funds for local projects
INDOT makes a quarter of its federal highway funds available for local construction projects. The Metropolitan Planning Organizations decide which local projects are funded in urban areas, and INDOT distributes funds for the rural areas.
The local communities or their consultants design the projects, purchase the land, and pay the required 20 percent match. INDOT then bids the projects and oversees them to ensure compliance with federal rules.