With the Infrastructure Investment and Jobs Act (IIJA) set to expire on September 30, 2026, transit leaders across the country are facing a critical window of legislative activity. Between upcoming reauthorization timelines, midterms, and immediate grant deadlines, staying ahead of federal funding policy is essential.
In a recent webinar, Aparna Paladugu (VP of Policy and Government Affairs at Via) sat down with DC transportation policy insider Jason Pavluchuk (Founder of Pavluchuk & Associates) to unpack what’s happening on Capitol Hill and what it means for those running and funding public transit.
Below are the key questions and takeaways from their discussion.
With only a few legislative days left before FY26 ends, what does Congress need to pass by September 30th?
There are about 10 to 15 legislative days at most, and two critical tasks must happen before the fiscal year ends: extending the IIJA (surface transportation reauthorization) and passing a Fiscal Year 2027 Continuing Resolution (CR) for general appropriations.
While authorization creates the "cookie jar" and appropriations fill it with "cookies," surface transportation is unique because Highway Trust Fund programs are guaranteed once authorized. However, because the IIJA is expiring, funding stops unless an extension or new authorization passes.
Both the House and Senate have drafted extension bills. The Senate CR extends both IIJA and budget appropriations to December 11, while the House CR extends appropriations to around mid-December. Because of the limited legislative calendar, both processes will almost certainly be bundled into a single package.
What happens after the temporary September extension? Are we looking at a full reauthorization in December?
A full reauthorization in December is extremely unlikely. Historically, Congress plans to do massive amounts of work during a post-election "lame duck" session. However, once they return, the focus shifts entirely to internal leadership organization—choosing committee chairs and reorganizing party lines.
By mid-December, time runs out, resulting in another extension. They will likely punt the decision to March. If punted to March, expect another short-term extension before substantive action occurs in 2027.
The primary drawback here is uncertainty. Transit agencies plan years in advance, and short-term extensions cause agencies to slow down spending as they approach the edge of funding cliffs.
If IIJA is extended, does all transit funding carry over? What programs are at risk?
Not everything is treated equally in an extension. Core transit formula programs tied directly to the Highway Trust Fund—such as core formula funding and bus/bus facility grants—are secure in a baseline extension.
The primary risk lies with Advanced Appropriations (Division J programs). These funds were created under the IIJA to supplement traditional formula dollars. Initial short-term extensions will likely cover only Trust Fund programs, deferring decisions on Advanced Appropriations to December or FY27 budget debates.
For transit agencies, key programs vulnerable during short-term extensions include:
- Low-No Emissions Grants: Received $1.1B in FY26, but $1.05B came from Advanced Appropriations. Without an extension of these funds, Low-No funding drops to just $78M.
- State of Good Repair: Received 4.75BinFY26,with~1B coming from Advanced Appropriations.
- All Stations Accessibility Program (ASAP): Heavily dependent on Advanced Appropriations to support legacy transit systems with ADA compliance.
- Competitive Discretionary Grants: Competitive programs like RAISE and SMART grants could face significant funding gaps or delays if Advanced Appropriations aren't extended.
What is the status of the five-year reauthorization bill (Build 250)?
The Build 250 America Act passed the House Transportation & Infrastructure (T&I) Committee with a massive 62-2 bipartisan vote in May. It serves as a solid baseline for future legislation.
The main roadblock isn't transportation policy disagreement—it’s finding the $150B to $200B funding gap required to fulfill the bill. With midterm elections approaching, leadership lacks the appetite to push major bipartisan packages to the floor right now.
Expected Timeline:
- Spring 2027: Committee markups.
- Summer 2027: House and Senate floor action.
- August / September 2027: Final bill passage.
If reauthorization slips past late 2027 into FY28, Congress will need to identify 25B–30B just to extend the baseline, coinciding uncomfortably with the presidential primary season.
How will key personnel changes and midterm elections affect the bill?
Narrow margins in both chambers and roughly 50 to 60 retiring members make the election landscape dynamic.
- House T&I Leadership: Chairman Sam Graves (R-MO) is retiring. Representative David Rouzer (R-NC), current Highways and Transit Subcommittee Chair, is poised to succeed him. Because Build 250 passed 62-2, it will serve as the baseline draft regardless of which party wins the House majority.
- Senate Committees: Senator Shelly Moore Capito remains top Republican on EPW. Senator Sheldon Whitehouse may move to the Judiciary Committee, leaving a leadership vacancy on EPW. Meanwhile, Banking (transit) and Commerce (safety/rail) are having initial discussions but have not released text.
- Policy Priorities: If Democrats win the House, expect pushes to restore passenger rail funding (currently omitted in Build 250). Meanwhile, AV/CV policy groundwork is advancing in Build 250, alongside USDOT's recently announced connected vehicle corridor programs.
For voters seeking information on current or upcoming elections, voter registration resources and official election results are available on your state's Secretary of State or local elections board website.
What grant opportunities are open now, and how should transit agencies adapt long-term?
There are several active federal grant opportunities transit agencies should keep on their radar:
- ICAM (Innovative Coordinated Access and Mobility): Applications due September 9 (focused on coordinating healthcare and transit access).
- Low-No & Bus/Bus Facilities: Applications due September 21 (Note: Bus funding is slightly lower this round as IIJA allocations wind down).
Looking long-term, Build 250 and future reauthorizations aim to reduce the total number of competitive grant programs. Managing dozens of disparate grant applications created administrative fatigue for smaller transit agencies.
Instead, dollars will increasingly flow back to state DOTs and Metropolitan Planning Organizations (MPOs) via formula funding.
Strategic Recommendation: If your transit agency, city, or organization relies on federal funding, start building direct relationships with your state DOT and MPO now. They will control a larger portion of discretionary and formula distributions in the post-IIJA landscape.
Want to learn more about navigating transit funding opportunities or advocating for policy changes on Capitol Hill? Reach out to us here.
