The Michigan Department of Transportation (MDOT) has officially announced it will not be funding the FY2025 Federal Aid Buyout Program, citing a lack of MDOT state money (state trunkline fund – STF).

According to the Department, it has “determined that there will not be enough state funding to match the anticipated federal aid. After exploring multiple possible solutions, it has been decided that MDOT will not be able to provide state funds for the FY 2025 Federal Aid Buyout Program and still be able to maintain the functions of the department and match expected federal aid.”

This decision is in accordance with Public Act (PA) 49,Section 6, copied here for your convenience. A copy of PA 49 is attached.

(6) The department must make available money from the state trunk line fund in exchange for federal aid obligation authority awarded to local road agencies in the amounts described in subsection (8) unless the amount must be reduced to do either or both of the following:

• Match all available federal aid including reapportionments, redistributions, or other awards of federal aid obligation authority.
• Provide for debt service, the minimum state-funded program, routine maintenance of state trunk lines, administration, and all other functions of the department.

(7) If the department reduces the amount of money available from the state trunk line fund under subsection (6), the department must submit a letter to the chairpersons of the senate and house of representatives transportation committees, the chairpersons of the senate and house of representatives transportation appropriations subcommittees, the senate majority leader, and the speaker of the house of representatives explaining why the department is unable to match available federal aid or perform its essential functions.

The STF shortage is caused by increased Infrastructure Investment and Jobs Act federal aid requiring additional state match; increased debt service payments of existing and new MDOT bonds; state trunkline maintenance; and construction inflation costs.

This decision does not impact FY2024, which will still proceed as planned.

If you have questions, please contact [email protected] or call Don Mayle at 517.423.8589.

John LaMacchia is the League’s director of state & federal affairs. He can be reached at [email protected] or 517-908-0303.