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Tag: shutdown

Transit funds could crack under the pressure of the budget deadline

entrance to the USDOT headquarters

The upcoming continuing resolution to fund the government and avert a shutdown won’t include transportation spending, piling on the pressure to pass the infrastructure deal and budget reconciliation. Congress could end up gutting the reconciliation package to make a deal.

Image by U.S. Department of Transportation

Congress is currently negotiating a continuing resolution (CR) to fund the government at current levels and keep things open and functioning through December 3, but, unlike most other CRs, transportation is not in the current CR. So the race is on to pass both the surface transportation reauthorization (the Infrastructure Investment and Jobs Act, also known as the Senate’s infrastructure deal), and the budget reconciliation by the current September 27 deadline set by Congressional Democrats.

If passed, the current CR will fund only the FAA and the FHWA’s emergency fund, no other transportation programs. This means that without reauthorization, normal authorized funding provided to highways, transit, rail and other programs will come to a halt after September 30, even under this CR. Of course, these things will be funded by reauthorization and reconciliation if they pass, but that is not a given. So without the safety net of a CR, Congress must pass reauthorization by September 30 or risk a shutdown of much of US DOT. That date is coming fast, and the United States government has already begun shutdown planning procedures.

Speaker Pelosi’s dual-track approach has tied the fate of reauthorization to that of budget reconciliation. If Congress can pass reconciliation, they will most likely be able to pass reauthorization. But key Senators are debating the budget’s $3.5 trillion funding level, which may mean that in order to get both bills to pass, Congress could cut reconciliation funding for the transit programs we applauded last week.    

For those who wish to improve the nation’s infrastructure, reconciliation is just as important as reauthorization. 

If Congress passes reauthorization without the transportation funding in the budget reconciliation package, they will cut $10 billion in transit funding and remove all operations funding for transit agencies. They will fail to provide direct funding to localities, fail to connect affordable housing to services and amenities, and fail to address the impacts of U.S. transportation policy on communities of color.

As we said when the reauthorization text was released, the bill does not represent any sort of policy shift toward safety or connectivity that our communities so desperately need. In fact, it cements irresponsible highway expansion. The transportation programs included in the budget reconciliation package move this reauthorization in the right direction.

To avoid a shutdown that could cripple transportation projects and to improve the infrastructure deal, reconciliation is just as vital to pass as the deal itself.

Shutdown averted; another crisis created

people waiting for a train

The U.S. Department of Transportation (USDOT) is refusing to obey the rules and Congress has so far been powerless to stop them. At stake are billions in federal funding for new and expanded transit systems that USDOT doesn’t want to award. But a policy change that attempts to reign in USDOT and make it obey the law could just be making matters worse.

Congress today has done its part to avert a government shutdown by passing a continuing resolution (CR) that will fund the federal government through November 21. The president has until Monday night to sign it. While a CR is generally just a continuation of existing policy, this one tweaks a key, but very wonky, policy for the Capital Investment Grant (CIG) program—the main source of federal funding for building new and expanding existing transit systems.

The CIG program has been under attack by the Trump administration, which is ideologically opposed to funding transit, since day one. Because Congress has continued to fund the program, USDOT has instead sought to sabotage the grant-making process by delaying grants, shutting down lines of communication, and making the whole process more opaque and confusing to everyone involved: Congress, project sponsors, and the public.

Now here’s where it gets wonky. In fiscal years (FY) 2018 & 2019, Congress tried to hold USDOT accountable by adding new language to their appropriations bills that required the agency to actually award (i.e. “obligate”) at least 85 percent of the funds for that fiscal year by the end of the following calendar year (so 85 percent of FY18 dollars would need to be spent by December 31, 2019 and FY19 dollars spent by the end of 2020).

The CR that Congress just passed changes that language to say that USDOT must “allocate,” rather than “obligate,” at least 85 percent of those funds. Allocation is not the same thing as obligation and results in zero dollars actually going to project sponsors.

The original “obligation” language was designed to force USDOT to advance projects through the CIG pipeline and actually award funding by signing grant agreements. The change comes from a concern that USDOT will simply ignore the law—let that statement sink in—which would result in Congress clawing back the CIG funding through a lengthy legal process.

In essence, USDOT doesn’t want the money even though Congress gave it to them anyway and ordered them to spend it because they know local communities are counting on it for their transit projects. But USDOT is ignoring the law and spending as little of the funding as they can get away with. To date, USDOT has only spent about a third of what Congress has authorized over the past three years. It’s understandable that Congress would seek another solution to get grants out the door—we agree more is needed—but focusing on “allocating” funds could create a new problem while failing to solve the original one.

Creating a new problem

Changing the requirement for “obligation” to “allocation” through the CR ignores the new realities on the ground. It used to be that an “allocation” meant something. USDOT would allocate funds to projects that were almost finalized and ready for construction to signal that a grant was to follow shortly. Under previous administrations, allocations would inform how much money Congress would provide in the budget for the CIG program and signal an imminent grant. But this administration has broken from precedent. “Allocations” from this USDOT are a big old nothingburger.

As we have previously described, an “allocation” is simply an internal accounting in the ledgers at USDOT. It doesn’t mean funding has been awarded nor does it guarantee that funding will ever arrive. In at least nine cases, communities have been waiting for months without funding despite receiving an allocation. One of those projects—the Purple Line subway extension in Los Angeles—has received two separate allocations without receiving a dime of federal money.

A table of nine nine unfunded transit projects with allocations and the date of the allocations

Congress’s new rules in the CR would unfortunately do nothing to ensure these communities receive funds and would give undue credit to USDOT for “allocating” these funds, regardless of whether that allocation eventually results in a formal grant.

Instead of simply swapping “obligate” for “allocate,” we’ve proposed that Congress requires a strict timeline for DOT between making an allocation and an obligation, along with requirements for the DOT to regularly communicate with Congress and project sponsors about the status of all projects that are seeking CIG funding. While Congress can’t do USDOT’s work for them, it can exercise aggressive oversight that would make it much harder for the agency to just sit on its hands. USDOT’s actions (or lack thereof) to date have more than justified such an approach.

Congress’s heart is in the right place; they’re trying to make USDOT obey the law and administer the CIG program as intended. The fact that Congress is even in this position speaks to the sordid state of affairs at USDOT. But their proposed remedy to this problem—changing policy in the CR to focus on tracking internal accounting (“allocations”) instead of executed grants—could just end up making things a whole lot worse.

Government shutdown previewed a future without federal transit funding

With federal employees at the Federal Transit Administration furloughed during the recent record-length shutdown, transit funding wasn’t being distributed and grant/loan programs ground to a halt. New projects were further delayed and transit providers were faced with hard choices about service cuts, showing the vital importance of federal funding for transit.

Since taking office, the Trump administration has been hostile to federal transit funding. The president’s first and second budget requests both called for eliminating critical programs that provide funding to transit—the competitive TIGER program, Capital Investment Grants (CIG) for building new transit and funding major improvements, and intercity passenger rail funding.

Taken to the extreme, eliminating federal transit funding would require shuttering or at least crippling the Federal Transit Administration (FTA) which awards transit grants and ongoing funding. While such a radical position would almost certainly never pass Congress, it has been analyzed by the Congressional Budget Office as a possible deficit reduction strategy. And last month, we got a preview of a future without federal transit funding when staff at the Federal Transit Administration were furloughed for over a month.

The FTA doles out approximately $250 million a week in payments and reimbursements to local providers and state governments to support transit—payments that halted during the shutdown. After a 35-day shut down, there is a backlog of about $1 billion. Although the government has been reopened it will likely be months before the staff at FTA are able to clear this backlog. (Similar federal payments to states for road-related funding through the Federal Highway Administration were not interrupted because FHWA staff positions funded by the Highway Trust Fund were not furloughed.)

In many communities—particularly smaller and more rural ones—the local transit system watched as an approaching fiscal cliff left them with little option but to cut routes or shutter the system without federal funding. As Politico noted, “The government shutdown is pushing some of the nation’s small, midsize and rural transit systems to an existential crisis, prompting bus agencies to scale back service, prepare for furloughs, or even contemplate closing their doors entirely.”

In the Wilmington, NC area—still recovering from Hurricane Florence last September—Wave Transit faced service cuts and construction projects were suspended. In Frederick County, MD, TransIT Services was faced with a similar dilemma. In Arizona, at least 27 rural transit providers that offer critical lifelines to residents were left high and dry without federal funding; the prospect of shuttering entirely was a possibility for some transit providers. And in Missouri, OATS Transit wasn’t facing a future service reduction; it reduced service to stretch its emergency funds for as long as possible during the shutdown. The Community Transportation Association of America (CTAA) has more on the specific impacts for many of those communities.

Some states with the means were able to throw a lifeline to local transit systems by deploying available funding to cover the sudden evaporation of federal funding. But with some federal transit funding already slowed down over the last year, states wouldn’t be able to pick up the slack indefinitely.

For example, the construction of the final leg of the Purple line extension in Los Angeles—which is home to the third largest public transit service by ridership in the country—was impacted by the shutdown as low-interest loans and grants (which would be eliminated if the Trump administration had its way) were held up. And LA Metro had already been waiting for months for a final funding agreement with the FTA for the extension—an agreement that FTA could have signed already—which could not be advanced or signed during the shutdown.

Federal transit funding is critical

Transit is critical to the economies of communities large and small, urban and rural. If residents can’t get to work without transit, then it’s awfully hard to grow a strong local economy. And it’s impossible to build a strong national economy on the backs of weak local economies. Federal transit funding is vital for making this possible.

Furthermore, the construction and maintenance of transit vehicles and facilities supports high-paying, skilled manufacturing jobs across the country. In places like Elkhart, IN and Crookston, MN, the bus and parts manufacturers are a big part of the economy. As we’ve noted, steady federal transit funding is critical to maintain these jobs; they can’t be switched on and off at a whim.

What is clear post-shutdown is that federal funding for transit is critical. This shutdown was a test drive down a path without such funding and that isn’t a future worth pursuing.

Stories You May Have Missed – Week of September 8th

Stories You May Have Missed

As a valued member, Transportation for America is dedicated to providing you pertinent information. This includes news articles to inform your work. Check out a list of stories you may have missed last week.

  • The House of Representatives on Friday cleared a short-term measure to avoid a government shutdown and raise the debt limit through December 8th, ratifying a deal President Trump struck with Democrats. (The Hill)
  • Earlier in the week, President Trump reached a deal with Senator Minority Leader Chuck Schumer and House Democratic Leader Nancy Pelosi to provide Hurricane Harvey relief and raise the debt ceiling and extend government funding until December 8th. (Politico)
  • The House of Representatives began consideration of a package of 8 appropriations bills this week, including the Transportation and Housing and Urban Development (THUD) appropriations bill. (See T4America’s blog post and amendment tracker here)
  • The House of Representatives rejected a proposed amendment to the THUD appropriations bill that would have defunded Amtrak. (The Hill)
  • Because of Hurricane Irma, the House delayed final passage of the appropriations package until the week of September 11th. (Politico)
  • House Republicans still lack the votes to pass their draft House budget, putting at risk their efforts to pass tax reform. (The Hill)

Budget battles leave a cloud over transportation funding as lame duck session looms

Same story, different year. Once again, we’re nearing the beginning of a new fiscal year on October 1, and Congress has failed to pass a budget to fund the government for the upcoming year. Even if Congress adopts a temporary budget to avert a shutdown —which is looking likely — important transportation programs could be left on hold on until lawmakers pass a full budget.

The House and the Senate never resolved their disagreement over the annual appropriations for transportation for the upcoming fiscal year — one of many budget issues that they couldn’t agree on this year. As in years past, the Senate provided more money for transportation programs in their appropriations bill than did the House. See the last column in the table below:

FY14

USDOT actual		GROW AMERICA Act for FY15 (President's 4-year proposal)HOUSE FY15 THUD Proposal ( & difference vs FY14 actual)SENATE FY15 THUD Proposal (& difference vs FY14 actual)DIFFERENCE between House & Senate FY15 proposals
Federal-Aid Highways$40.26B$48.062B$40.26B$40.3B (+$40M than FY14)+$40M in Senate proposal
Transit Formula Grants$8.6B$13.914B$8.6B$8.6B-
Transit 'New & 'Small Starts'$1.943B$2.5B$1.691B (-$252M than FY14)$2.163B (+$220M than FY14)+$472M in Senate proposal
TIGER$600M$1.25B$100M (-$500M than FY14)$550M -($50M than FY14)+$450M in Senate proposal
Amtrak Operating$340MProposes to roll passenger rail into two new programs that total $4.775 billion*$340M$340M-
Amtrak Capital$1.05Bsame as above$850M (-$200M than FY14)$1.04B (-$10M than FY14)+$190M in Senate proposal
High speed rail$0same as above$0$0-
*Up to $35 million is available for planning activities in the Senate FY15 THUD proposal.
**The FY15 Administration Budget (Grow America Act) consolidates existing rail programs into 2 new programs (Rail Service Improvement Program and Current Passenger Rail Service).

With no progress made toward passing individual appropriations bills, or an “omnibus” that includes them all together in one package, Congress is moving on to temporary measures.

Yesterday, the House introduced a “continuing resolution” to extend government funding through mid-December that, if adopted, is expected to pass the Senate shortly afterward. That would ensure that the government can continue operating at the same funding levels as this past year. But it means that negotiations on a full budget will have to take place during the “lame duck” session, after the November elections but before losing members leave and new members arrive. That, or punt once again again until the new Congress starts in January.

With the elections likely to change the political landscape of Capitol Hill, it’s hard to predict what might happen after November 4th with any certainty.

In any case, as long as the government is operating via a short-term budget, any programs that are discretionary at USDOT (i.e., not funded from the Highway Trust Fund) will likely face great uncertainty. That means the next round of TIGER grants, money for new transit expansion (New and Small Starts), and passenger rail funding might see delays in when they’re awarded — creating even more funding uncertainty for states, metro areas and transit agencies.

At least the Highway Trust Fund is on stable footing until May, right, since Congress managed to scrounge up $10.8 billion through all manner of accounting gimmicks to temporarily delay insolvency?

Well, perhaps.

You might remember that about a year ago, USDOT was predicting that the trust fund would go bankrupt sometime late in 2014. Once we got into 2014, however, the deadline started shifting earlier. September. August. Then the end of July. So, in truth, who knows whether $10.8 billion actually will get us to May? It wouldn’t be too surprising to see a report from USDOT sometime in January or February, much as last time, saying that the trust fund is likely to reach insolvency a little sooner than previously thought.

One way or another, we’ll know more soon. Provided a shutdown is averted, members of Congress are scheduled to leave Washington after next week until the elections.