The federal money that states receive is typically always used in full each year. States do this to prevent their funding from being reduced in subsequent years. To prevent this from occurring the states spend money on unnecessary things such as paving rural roads.
I propose that each state be given a repository where any excess funding can be stored. Any money deposited into the repository couldn't be used against the state for federal funding reductions. After 10 - 20 years of usage the state may have built up enough reserve money to the point that the federal funding could be reduced to the state with little impact or the money could be used as an emergency fund that wouldn't require any federal approval.