Contractors have about ten weeks. The Infrastructure Investment and Jobs Act expires September 30, and Congress has to pass either a new multiyear surface transportation law or a short-term extension to keep federal money flowing to states and localities.
The gap is roughly $58 billion a year
Maintaining spending at IIJA levels after expiration would take more than $102 billion annually. The Highway Trust Fund brings in about $44 billion a year, from a federal gas tax that has been 18.4 cents per gallon since 1993 and has never been indexed to inflation. Every reauthorization since has closed the difference with general fund transfers, and each one has been harder to pass than the last.
Vehicle efficiency and electrification are making it worse on both ends. Fuel consumption per mile keeps falling, so receipts erode even as vehicle miles traveled rise, and EVs contribute nothing to a fuel tax at all. Every serious proposal to fix this involves either indexing the gas tax, a vehicle-miles-traveled fee, or admitting the trust fund is now a general fund program with a misleading name.
What contractors are saying
Lynn Hansen, CEO of Charlotte-based Crowder Constructors, put it plainly at a recent briefing: “If federal funding is reduced or fails to keep pace with growth and inflation, our projects will be postponed.” He added that “Construction employment will be put at risk.”
The exposure is bigger than it was in previous cycles because the IIJA reauthorized surface transportation programs at roughly a 34% increase over prior levels. Firms staffed up, bought equipment and bonded into that number. Direct surety premiums have grown more than 40% since 2021, largely on the surge in bonded public work, which is a decent proxy for how much of the industry’s capacity is now pointed at federally assisted projects.
Extensions are the base case, and that’s the problem
Congress has run this program on short-term extensions before. The last two surface transportation bills each needed multiple stopgaps before final passage. An extension keeps money moving and prevents an outright shutdown of state lettings, so it’s the likely outcome.
It’s also corrosive. State DOTs can’t advertise multiyear megaprojects against funding authorized in six-month increments, so the first thing that stops under an extension isn’t the paving program, it’s the big-ticket work with long design lead times. Projects like the ALCOSAN Ohio River Tunnel and corridor rebuilds in design right now are the ones that quietly slide.
State lettings are still active in the meantime. Minnesota DOT awarded Lunda Construction a $33.4 million Highway 77 contract on July 13 and named the firm apparent low bidder on a $28.6 million Highway 243 job. Water infrastructure is moving on a separate track: the House Transportation and Infrastructure Committee advanced the Water Resources Development Act of 2026 on a 66-0 vote, authorizing $30.5 billion across the clean water and drinking water state revolving funds. Surface transportation has no comparable bipartisan vehicle in front of it. Source: Construction Dive.