Senate transportation panel told state budget shortfall could force agency to forgo $100M+ in federal grants

State transportation officials told the Senate Transportation Committee on Feb. 13 that a reliance on one-time funds and uncertain state match could make the Agency of Transportation (AOT) forgo tens of millions of dollars in federal competitive grants and force cuts to paving and bridge work.

Candace Umkus, chief financial officer for the Agency of Transportation, said the agency is counting on a one-time infusion — a $12.5 million general-fund transfer this year plus a JTOC appropriation the agency referenced as roughly $20.25 million — to close a near-term deficit. Umkus said the agency’s analysis shows a roughly $30.6 million deficit in the first year if those items are treated as recurring, and that “for 2027 … the full amount of the difference … is actually all state match needed for competitive grants.”

The nut of the committee’s concern: without state match, federal competitive awards that require a state contribution would not be used. Committee members and AOT staff repeatedly cited a roughly $102 million figure for discretionary federal grants that could be at risk if AOT can’t provide matches; Jeremy Reed, the agency’s chief engineer, described that $102 million as “a federal number” representing grant awards or applications that require state match.

Why it matters: many of the agency’s large projects — bridges, highway construction and locally administered grants — rely on federal…