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DOT presents FY2026 highways request as federal funding pauses and deferred-maintenance backlog grow
Summary
The Department of Transportation and Public Facilities presented its FY2026 highways request March 12 to the Senate Transportation Finance Subcommittee, describing funding sources, targeted one-time and base increments and the department's deferred-maintenance backlog while flagging temporary federal pauses that could affect future obligations.
The Department of Transportation and Public Facilities laid out its fiscal year 2026 highways request to the Senate Transportation Finance Subcommittee on March 12, emphasizing the composition of highway funding and several targeted increments while noting temporary pauses to some federal programs.
The department said the highways-only portion of its operating budget is about $126,000,000, with the largest single state source being unrestricted general funds (about $58,500,000), followed by revenue from the state's motor fuel tax and capital-improvement project receipts. "The portion of funding we're focusing on today is the largest slice of the pie," said Andy Mills, Department of Transportation and Public Facilities staff, during the presentation.
Why it matters: lawmakers and DOT staff said the state faces a tight fiscal environment and a sizable deferred-maintenance backlog on highways and facilities; choices about where to place limited funds will affect maintenance, safety projects and regional operations.
Key budget items and funding sources
DOT staff outlined the main revenue streams for highways and several FY26 requests: - Highways-only operating funds: approximately $126 million in aggregate, with unrestricted general funds roughly $58.5 million, federal and other sources making up the remainder. - Motor fuel tax: the department identified the state 8-cent-per-gallon motor fuel tax as a major recurring source. - Capital Improvement Project receipts (federal dollars used for state force preventative maintenance): roughly $22.6 million listed in the presentation.
Noted line-item requests included a $25,000 base increment for highway-safety staffing; $4.5 million of CIP receipts to create Dalton Highway aggregate stockpiles for quicker winter response; a $250,000 one-time unrestricted general fund (UGF) request to establish Dalton Highway safety training for hazardous materials response; a $1,000,000 increment to address roadside hardware backlogs (guardrail, signs and culverts), primarily assigned to Northern Region; and a one-time $500,000 UGF request for right-of-way clearing of vacated homeless encampments. The department also proposed swapping $2,800,000 UGF to $2,800,000 federal funds for Anton Anderson Memorial (Whittier) Tunnel operations after federal partners approved eligibility.
Federal program pauses and potential impacts
Committee members asked about impacts from federal actions. "We've received some direction on certain programs and fund types being temporarily suspended for further obligations from our Federal Highways partners," Andy Mills said, noting delays also on some Federal Transit Administration rural ferry projects. The department said the National Electric Vehicle Infrastructure (NEVI) pass-through was among paused programs; staff estimated NEVI pass-through obligations at about $12,000,000 annually for future obligations. The presentation also referenced a short delay and subsequent approval for the carbon reduction program.
Deferred maintenance
DOT staff told the subcommittee the department's deferred-maintenance backlog is substantial: about $163,000,000 for highways maintenance projects and about $85,500,000 for DOT facilities. "We provide a categorized list to the legislature every year through OMB," Dom Pinone, staff member, said, and the department said it is prioritizing condition surveys and designs for facilities such as the Haines maintenance station.
Regional priorities and assignments
DOT presenters said some increments were assigned to specific regions where needs are greatest. Christopher Goins, South Coast Region director, said Northern Region reported the largest need for roadside hardware repair and that some guardrail replacements are funded through the Highway Safety Improvement Program (HSIP). "Guardrail replacement is sometimes life-and-death work," Goins said, explaining why guardrail can be prioritized above pavement in certain circumstances.
No formal votes were taken at the hearing. Committee members asked DOT to provide additional follow-up information requested during the presentation.
Ending
DOT staff concluded by saying the department will keep working with the committee on prioritization, provide requested attachments and follow up on questions about project lists, deferred-maintenance details and regional lane-mile trends.
