Federal Money: FHWA Formulas, the STIP, MPOs and the Reauthorization Fight

Most Idaho road debates sound local: a highway district levy, an Idaho Transportation Board vote, a city's impact fee. Behind many of those decisions sits money from Washington. In state fiscal year 2025, the Idaho Transportation Department (ITD) reported $493.0 million in federal reimbursements out of $1,241.2 million in total funds received, roughly 40 percent of what came in, according to the 2025 ITD Annual Report. Counties, cities and highway districts get federal dollars too, mostly through programs run by the Local Highway Technical Assistance Council (LHTAC).

This lesson explains how that money is calculated, what strings come with it, which planning documents must list a project before a federal dollar can be spent, who the regional planning bodies are, and what the 2026 reauthorization fight means for Idaho. It ends with step-by-step guides for finding the federal money in a project near you and for commenting on the plans that steer it. Facts are current as of October 2026. Federal programs change often, especially in a reauthorization year, so check each figure against the linked source before you rely on it.

The money chain: from the fuel pump to an Idaho project

Where the federal Highway Trust Fund gets its money

Federal highway programs are paid mostly from the Highway Trust Fund. The Congressional Research Service (CRS), in its September 8, 2026 update of Surface Transportation Reauthorization: Federal Highway Programs (R48845), reports that fuel taxes make up roughly 85 percent of the fund's highway account revenue. Congress last raised those taxes in fiscal year 1993. The federal gasoline tax is 18.3 cents per gallon (18.4 cents counting a 0.1-cent leaking underground storage tank tax), and diesel is 24.3 cents (24.4 cents with that tax). CRS estimates their purchasing power has fallen about 74 percent since 1993.

Because fuel tax revenue has not kept up with spending, Congress has repeatedly moved general tax money into the fund. The IIJA, signed November 15, 2021, transferred $118 billion from the general fund: $90 billion to the highway account and $28 billion to the transit account. CRS projects the highway account balance will approach zero in fiscal year 2028 and the transit account in fiscal year 2027. The fund cannot go below zero. If the highway account ran dry, CRS notes, FHWA could slow its payments to states for completed work. Several federal fuel taxes, including gasoline and diesel, are scheduled to drop to 4.3 cents per gallon after September 30, 2028, unless Congress extends them.

Four words that confuse almost everyone

Federal transportation money moves through four stages. News stories mix them up, so it helps to keep them straight.

Term	What it means	Who acts	Idaho example
Authorization	A multi-year law that creates programs and sets how much may be spent from the trust fund (contract authority)	Congress	The IIJA authorized highway programs for fiscal years 2022 through 2026
Apportionment	FHWA divides each year's formula money among the states by statute	FHWA	$410,158,296 for Idaho's core programs in FY2026
Obligation	The federal government commits to pay its share of a specific project phase	FHWA, at ITD's request	A project in the STIP gets a federal project agreement before it is advertised
Reimbursement	Cash paid after the state or local agency spends its own money and bills the federal government	FHWA pays ITD	$493.0 million in federal reimbursements to ITD in FY2025

Federal-aid highway money is a reimbursement program. ITD or a local agency pays contractors first, then bills FHWA for the federal share. That is why a local government needs cash on hand for a federal project, even with a small match.

How the formula works

Under 23 U.S.C. 104(c), FHWA apportions formula funds "On October 1 of fiscal year 2022 and each fiscal year thereafter." There is no new needs calculation each year. Each state's starting share equals its share of all states' fiscal year 2021 apportionments, which was itself carried forward from earlier laws. CRS explains that this base-year method preserves state shares from a chain of base years (2009 under MAP-21, 2015 under the FAST Act and 2021 under the IIJA). Two guarantees then adjust the result: each state must receive at least 95 percent of its estimated highway tax payments into the trust fund, and at least 2 percent more than its fiscal 2021 apportionment and 1 percent more than the prior year.

After the state total is set, section 104(b) divides it among programs by fixed percentages. For example, the National Highway Performance Program receives 59.08 percent of the remaining amount and the Surface Transportation Block Grant program 28.74 percent, after certain programs are carved out first.

The table below explains what each formula program pays for. The dollar figures are Idaho's fiscal year 2026 amounts before set-asides, penalties and sequestration, from FHWA Notice N 4510.911 (January 29, 2026), and the Bridge Formula Program figure is from Notice N 4510.907 (October 1, 2025).

Program	What it pays for	Idaho FY2026
National Highway Performance Program (NHPP)	Condition and performance of the National Highway System, which includes interstates and major routes such as US-95 and US-20	$225,687,810
Surface Transportation Block Grant (STBG)	The most flexible program: roads, bridges, transit capital, planning. Includes the Transportation Alternatives set-aside and a share suballocated by population	$109,794,070
Highway Safety Improvement Program (HSIP)	Data-driven safety projects such as rumble strips, guardrail, intersection changes	$23,594,032
Congestion Mitigation and Air Quality (CMAQ)	Projects that reduce emissions in areas with air quality problems or maintenance plans	$15,112,616
PROTECT formula	Resilience against floods, wildfire, rockfall and other hazards (created by the IIJA)	$11,131,899
National Highway Freight Program (NHFP)	Freight corridors and bottlenecks	$10,737,014
Carbon Reduction Program	Projects that cut transportation emissions (created by the IIJA)	$9,789,971
Metropolitan Planning	Pays for the six metropolitan planning organizations' planning work	$2,311,960
Railway-Highway Crossings	Safety at rail crossings	$1,998,924
Core formula total		$410,158,296
Bridge Formula Program (separate, from IIJA Division J)	Bridge replacement, rehabilitation and preservation; 15 percent set aside for off-system (local) bridges	$45,000,000

Some federal money is set aside for local areas

Not all of a state's formula money is ITD's to spend wherever it chooses. Part of STBG and its Transportation Alternatives (TA) set-aside is suballocated by population. In fiscal 2026, Idaho's TA set-aside was $10,036,335, of which $1,710,560 went to the Recreational Trails Program. The remainder was split among areas over 200,000 people ($1,157,013, all for the Boise urbanized area, population 433,180), areas of 50,000 to 200,000 ($1,521,585), areas of 5,000 to 50,000 ($712,851), areas under 5,000 ($1,520,758), and funds usable in any area ($3,413,568), per Table 2 and Table 3 of N 4510.911. These suballocations are one reason the metropolitan planning organizations, described below, matter.

Late each federal fiscal year, FHWA also takes back money that some states could not use and redistributes it to states that can obligate it before September 30. This is called August redistribution. For fiscal 2026, Idaho received $4,846,751 in a separate redistribution of certain authorized funds under Notice N 4510.912 (February 20, 2026). Check FHWA's notices for the August 2026 redistribution amount, which this lesson did not verify.

The federal match: why Idaho pays 7.34 cents on the dollar

The default federal share under 23 U.S.C. 120 is 90 percent for Interstate projects and 80 percent for most other projects. The law raises those shares in states where unappropriated public lands and nontaxable Indian lands exceed 5 percent of total area. This is called the sliding scale. The federal share can never exceed 95 percent. An alternative formula in section 120(b) also counts national forests, parks and monuments, and a state using it must sign an agreement committing it to use the difference for other eligible highway purposes.

FHWA's rates for Idaho are in Notice N 4540.12 (March 17, 1992). Under the alternative formula, Idaho's public lands ratio is 0.6329 and the federal share for an 80/20 program becomes 92.66 percent. For Interstate projects under section 120(a), Idaho's ratio is 0.2269 and the federal share is 92.27 percent. LHTAC's program table lists a 7.34 percent local match for its federal-aid programs, which is the other side of 92.66 percent (LHTAC funding options, 2020).

Some federal programs or project types carry their own shares that override the sliding scale. Under 23 U.S.C. 120(c), summarized in FHWA's IIJA federal share fact sheet, certain safety projects such as traffic signals, roundabouts and rumble strips may be paid at up to 100 percent federal, but a state may use that option on no more than 10 percent of its apportionment. Toll facility projects are generally capped at 80 percent. The Federal Lands Access Program, covered below, does not require a match in Idaho's current call for projects.

No plan, no money: the STIP, the TIPs and the ITIP

Statewide planning

Under 23 U.S.C. 135, every state must keep a long-range statewide transportation plan with a minimum 20-year forecast period, and a Statewide Transportation Improvement Program (STIP). Federal law says the STIP "shall cover a period of 4 years and shall be updated every 4 years," or more often if the governor chooses. Citizens, affected agencies and other interested parties must get a reasonable opportunity to comment on both. In nonmetropolitan areas, the state must develop the STIP in consultation with local officials responsible for transportation.

Idaho does more than the minimum. ITD keeps a seven-year program called the Idaho Transportation Investment Program (ITIP), covered in Lesson 5. The ITD STIP page says the STIP covers seven years and lists the current approved STIP as FY2026-2032, with an approval letter from FHWA and the Federal Transit Administration. The ITIP page lists FY2027-2033 as the current approved ITIP. Think of the ITIP as the state's full program and the STIP as the federally approved version that FHWA and FTA use to authorize spending. The STIP changes through amendments, each posted for written public comment; the STIP page listed seven FHWA amendments (H1 through H7) dated May 22 through September 21, 2026.

Metropolitan planning organizations

Federal law requires a metropolitan planning organization (MPO) "for each urbanized area with a population of more than 50,000 individuals" (23 U.S.C. 134(d)). An MPO is a board of local elected officials, with ITD and sometimes transit agencies, that adopts two federal documents:

• A long-range metropolitan transportation plan with a 20-year forecast period, updated every 4 years in areas with air quality problems and every 5 years elsewhere (134(i)).
• A Transportation Improvement Program (TIP), a financially constrained list of federally funded projects, updated at least once every 4 years and approved by the MPO and the governor (134(j)). Before approval, the MPO must give interested parties an opportunity to take part.

An urbanized area over 200,000 people is a Transportation Management Area (TMA) (134(k)). In a TMA, most federally funded projects outside the National Highway System are selected from the TIP "by the metropolitan planning organization designated for the area in consultation with the State and any affected public transportation operator." In Idaho, only the Boise area qualifies, which gives COMPASS more say over project selection than other Idaho MPOs have.

Idaho has six MPOs, listed on ITD's MPO funding map and LHTAC's urban jurisdictions list.

MPO	Area	What to know
COMPASS (Community Planning Association of Southwest Idaho)	Ada and Canyon counties: Boise, Meridian, Eagle, Garden City, Nampa, Caldwell and others	Idaho's only TMA. Long-range plan: Communities in Motion 2050 (2055 update under way). Its TIP page lists the FY2026-2032 TIP and an FY2027-2033 TIP report dated September 30, 2026. Applications for its FY2028-2034 program were open September 16 to November 20, 2026
KMPO (Kootenai Metropolitan Planning Organization)	All of Kootenai County	Formed in 2003 after Coeur d'Alene, Post Falls and Hayden together passed 50,000 people. Its site lists an FY2025-2031 TIP figure of $487 million
BMPO (Bonneville Metropolitan Planning Organization)	Idaho Falls, Ammon, Iona, Ucon and Bonneville County	Established in 1992. Members include ITD
BTPO (Bannock Transportation Planning Organization)	Pocatello, Chubbuck and northern Bannock County	Current TIP FY2027-2033; long-range plan MTP 2050. Took comment through September 5, 2026 on a TIP amendment adding a US-91 and Park Lawn Drive intersection project
LCVMPO (Lewis-Clark Valley MPO)	Lewiston, Idaho and Clarkston, Washington area	Serves communities on both sides of the state line. Its mailing address on ITD's map is in Asotin, Washington, and Washington's DOT publishes its federal obligations too
MVMPO (Magic Valley MPO)	Twin Falls and Kimberly	Listed on ITD's 2025 MPO map, with offices in Twin Falls. Its draft Unified Planning Work Program for the year starting October 1, 2026 described a budget of roughly $260,000, per KMVT (July 13, 2026)

Check each MPO's site for the current TIP before commenting. The LCVMPO and MVMPO websites were not loaded for this lesson; find them through ITD's MPO map.

Rural Idaho: no MPO, but still a voice

Most of Idaho's land and many of its road miles are outside any MPO. There, ITD must consult local officials when it builds the STIP (23 U.S.C. 135(g) and (m)). In practice, rural local agencies reach federal money through LHTAC's programs and ITD's district offices, and rural residents reach the plan through the ITIP comment period each July and the county commissioners and highway district boards who apply for LHTAC funding. LHTAC also lists 19 "small urban" areas, from Blackfoot and Burley to Weiser, that are too small for an MPO but large enough for separate urban programs. Whether Idaho has formally designated any regional transportation planning organizations under section 135(m) was not verified for this lesson; ask ITD's planning office.

LHTAC: the bridge between Washington and your highway district

The Local Highway Technical Assistance Council was established in 1994 under Idaho Code Title 40, Chapter 24. It recommends to the Idaho Transportation Board how federal funds for local highway projects should be distributed and prioritized, develops standards for local road work, runs a training center (the T2 Center) and administers state programs such as the Local Rural Highway Investment Program.

The working rules are in the 2025 ITD-LHTAC Stewardship Agreement, dated October 30, 2025 and running through September 30, 2030. It says "ITD must maintain overall accountability for the federal-aid program in Idaho," while LHTAC handles program and project administration for local projects. The agreement covers the Small Urban, Rural, Local Highway Safety Improvement Program, Off-System Bridge, Local Bridge, Transportation Alternatives and Emergency Relief programs. The usual path is:

1. LHTAC calls for applications from eligible local agencies, ranks them and recommends projects to the Idaho Transportation Board for the ITIP.
2. The local agency signs a state/local agreement with ITD, with LHTAC's help.
3. The local agency selects a design consultant under ITD's procedures.
4. Design follows ITD manuals and LHTAC's quality assurance guide.
5. LHTAC acts as ITD's representative for construction administration, inspection and testing. Change orders above plus or minus $500,000 need ITD's concurrence.

LHTAC's 2020 program table gives a sense of scale, though amounts change: about $8.9 million statewide for local safety projects, about $12 million for rural projects, about $8.5 million for urban construction, and about $9 million for local bridges, each with a 7.34 percent match. Treat those as historical figures and check LHTAC's current calls for projects.

The Bridge Formula Program's off-system set-aside is the clearest local stake in the reauthorization fight. In fiscal 2026 that set-aside was $6,750,000 of Idaho's $45 million. According to the FHWA bridge inventory, counties own 1,571 Idaho bridges (95 rated poor), cities 278 (18 poor) and "other local agencies," a category that in Idaho includes highway districts, 675 (45 poor), per FHWA's 2025 Bridge Condition by Owner table.

Federal Lands Access Program: roads to the national forests

About 15,907 miles of Idaho's 59,240 public road miles are owned by federal agencies, mostly the Forest Service, according to FHWA Highway Statistics table HM-10 for 2024. Many county and highway district roads lead to those lands. The Federal Lands Access Program (FLAP) pays for public roads, bridges, trails and transit that are on, next to, or provide access to federal lands, when a state, local or tribal government owns or maintains them.

FHWA's Western Federal Lands Highway Division issued Idaho's current call for projects on September 1, 2026, for fiscal years 2029 through 2031, with about $17 million available per year. Proposals are due Friday, January 22, 2027, and must be submitted jointly by the owning government and the federal land agency whose lands are accessed. The letter says the program "does not require matching funds," though applicants are encouraged to contribute. A three-member Programming Decisions Committee, with representatives from Western Federal Lands, ITD and LHTAC, selects projects (Idaho FLAP page).

The 2026 reauthorization fight

What the IIJA did

The IIJA (Public Law 117-58) provided about $365 billion for highways over five years, according to CRS: $304 billion in trust fund contract authority, $47 billion in advance appropriations from the general fund (Division J), and $15 billion in authorizations subject to future appropriations. Division J included the Bridge Formula Program at $5.5 billion a year and the National Electric Vehicle Infrastructure (NEVI) formula program at $1 billion a year. When the law passed the Senate on August 10, 2021, both of Idaho's senators voted for it, and Sen. Mike Crapo's statement said the bill would bring Idaho $1.9 billion for road construction, repair and maintenance and $225 million for bridges, per the Idaho Capital Sun (August 11, 2021).

The September 2026 stopgap

The IIJA's highway authorizations expired September 30, 2026. Congress did not pass a new multi-year bill in time. Instead, H.R. 6500, the Continuing Appropriations and Extensions Act, 2027, passed the Senate 90-6 on August 8, 2026 and the House 370-48 on September 1, and was signed September 2, according to the AASHTO Journal. It funds the government and extends surface transportation programs from October 1 through December 11, 2026, at prorated fiscal 2026 levels.

What it leaves out drew the most attention. It does not extend the Division J advance appropriations. AASHTO reported that no fiscal 2027 money would therefore be available on October 1 for programs such as the Bridge Formula Program and NEVI. The National Association of Counties (NACo), in a September 2, 2026 analysis, said the law "sets up a September 30 funding cliff for counties" and that if Division J is not restored, overall federal funding for roads, bridges, safety and transit would fall by more than 15 percent, with the Bridge Formula Program and the Safe Streets and Roads for All grant program among those cut. The act is Public Law 119-103, according to two Congressional Research Service reports: R48845 and R49353 (September 17, 2026), which says the President signed H.R. 6500 on September 2, 2026. NACo's analysis lists a different number (P.L. 119-416), which appears to be an error; the White House signing statement confirms the bill number and date.

The House bill: BUILD America 250 Act (H.R. 8870)

Rep. Sam Graves, chair of the House Transportation and Infrastructure Committee, introduced H.R. 8870 on May 19, 2026, and the committee ordered it reported on May 21, according to CRS. As CRS describes it, the bill would:

• Provide about $75 billion a year in trust fund contract authority plus $3 billion a year in general fund authorizations for five years, with no advance appropriations. CRS estimates the average annual amount of assured highway funding would be about 7 percent higher than under the IIJA; the bill would provide $73 billion in fiscal 2027, rising to $78 billion by fiscal 2031.
• Charge a new federal annual fee of $130 for electric vehicles (rising to $150 by fiscal 2032) and $35 for plug-in hybrids (rising to $50 by 2031). CBO estimated about $17 billion in new revenue over fiscal 2026-2036, partly offset by about $5 billion in lower income and payroll tax receipts.
• Eliminate the Carbon Reduction Program, PROTECT formula, Bridge Formula Program and NEVI, create a new bridge formula program, and create a Consolidated Funding Pilot for up to 10 states.

CRS reports CBO projected that the highway account's shortfall in fiscal 2031 would widen under the bill, from $23 billion to $27 billion. NACo joined a June 15 letter urging a House floor vote on H.R. 8870. A Senate committee bill was not described in the sources reviewed for this lesson; check the Senate Environment and Public Works Committee site.

The arguments, side by side

Position	Best argument as its supporters make it
Pass a multi-year bill now (committee leaders, NACo, state DOTs)	Short extensions freeze planning. Agencies like ITD and LHTAC cannot advertise long-lead projects without knowing future amounts, and the bridge money lapses in the meantime.
Trim programs and fund through users (supporters of H.R. 8870's structure)	Consolidating programs gives states flexibility, and an EV fee makes vehicles that pay little or no fuel tax contribute to the roads they use. Advance appropriations from the general fund added to federal deficits.
Keep Division J-style programs (many county, transit and rail groups)	Dedicated bridge and safety money reaches local bridges that formula money often skips. APTA, the transit association, said leaving out advance appropriations means a 20 percent cut to transit and an 81 percent cut to passenger rail funding, per Mass Transit.
Fix the trust fund first (budget watchdogs, some members)	Fuel taxes have lost about 74 percent of their purchasing power since 1993, and the highway account is projected to run dry around 2028. Any bill that spends more without new revenue relies on general fund transfers.

For Idaho, the practical stakes are concrete. The core formula programs ($410 million in fiscal 2026) continue under the stopgap at prorated levels. The $45 million a year in Bridge Formula money, including $6.75 million for local bridges, does not continue unless Congress acts. Idaho's state-side funding is also tighter: the $275 million General Fund transfer in S1218 (2025) was a one-time appropriation for fiscal 2026, and no 2026 bill repeated it for fiscal 2027, as Lesson 4 and Lesson 5 explain. A federal gap therefore has fewer state dollars to backfill it.

Where this fits in the rest of the course

Federal money is one stream among several. Lesson 2 shows where it sits beside the state fuel tax, registration fees and property tax, and Lesson 4 explains GARVEE bonds, which borrow against future federal funds. Lesson 5 shows how to read an ITIP line, and Lesson 6 covers the highway district budgets that must carry the local match. Lesson 8 turns to growth and impact fees, Lesson 9 to getting a project changed, and Lesson 10 to reporting on one.

Related courses: Local Government (including the budget cycle), Laws and Rules, Idaho Open Meetings for MPO and highway district board meetings, Idaho Public Records Requests, Testifying and Public Comment, Budgets and Fiscal Duty for elected officials, and Data and Statistics for working with FHWA tables.