Winding down toward the uncertainty of IIJA reauthorization.

Multiple factors in play as September expiration approaches.

A transportation appropriations bill signed into law on February 3 ensured full funding of core highway and public transportation programs through FY2026 — allowing states to continue committing federal dollars to projects during the last year of the 2021 Infrastructure Investment & Jobs Act (IIJA). On April 3, the Trump administration subsequently released a budget request for Fiscal Year 2027 — including a set of fact sheets that call for a total of $1.4 billion in USDOT highway and bridge discretionary grants, as opposed to line items for specific programs.

The American Road and Transportation Builders Association (ARTBA) and CIRI are hopeful that any reauthorization will include additional funds to counteract the effects of inflation, unforeseen needs and other factors. If a reauthorization bill is not passed by the deadline, we are also hopeful Congress will pass a continuing resolution (CR) to temporarily extend IIJA funding at its current levels.

Healthy market activity expected after record year in 2025.

The total value of state and local government transportation contract awards was $152.2 billion in 2025 – a new record – up from $132.2 billion in 2024, according to data compiled by the economics team at ARTBA. Their December 2025 market outlook also expected the US transportation construction market to grow nearly 3% to a record $209.1 billion in 2026.

HTF growth beyond projections tempered by expected shortfalls.

The Congressional Budget Office (CBO) recently updated receipts and future projections upward for the Highway Trust Fund (HTF) — as HTF revenue for 2025 outpaced prior projections by $2 billion. The CBO predicts projected gas tax revenue, previously expected to decline by $10 billion over the next decade, will grow slightly over the next 10 years. This will likely be augmented by the elimination of the $7,500 federal electric vehicle tax credit, along with changes to vehicle greenhouse gas emissions targets implemented by the Trump administration.

Congress relies on CBO to determine how much HTF revenue will be needed to offset outlays for the next surface transportation law. The most recent update appears to reduce the amount needed for the next five-year bill (2027-2031) by approximately $30 billion. While these developments are positive, Congress will still need to find approximately $220 billion in additional HTF revenue to pay for investments that grow from current levels.