Proposed budget cuts will keep highway funding flat

Level holds at $41.1 billion for FY 2011; money for high-speed rail pulled

News AGC of America April 13, 2011
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The budget compromise agreed to by President Obama and Congressional leadership to fund the federal government through the remainder of FY 2011 is expected to be approved by the House and Senate this week. Included in the agreement are reductions in funding for several transportation programs.

The budget bill funds the highway program in FY 2011 at $41.1 billion—the same level as in FY 2010. The bill, however, eliminates $650 million in general-fund dollars that were provided in the FY 2010 appropriations bill. This is not the general fund transfers that were made over the past three years to keep the Highway Trust Fund solvent but were instead supplemental funds.

In addition, the bill eliminates $630 million in funding for surface-transportation earmarks. These are projects that have been on the books for years and in some cases decades but for one reason or another have never been funded. The bill rescinds $2.5 billion in existing contract authority that had been previously apportioned to states but was never funded.

This continues an ongoing trend to cut accumulated contract authority. While this does not actually reduce funding amounts it does limit state flexibility to use its annual funding to meet its specific state priorities. Funding for the Tiger Grant II program was cut by $72 million from $600 million in FY 2010 to $528 million in FY 2011.

The biggest transportation loser in the bill is funding for high-speed rail. The bill eliminates all of the $2.5 billion in funding for high-speed rail in FY 2011 and goes back and eliminates $400 million from the funding provided for this program in FY 2010.
The bill also cuts $400 million in funding from the Federal Transit Administration’s (FTA) New Starts Program in FY 2011, and $280 million from the amounts provided in FY 2010. FTA’s New Starts Program is a primary capital investment program.
The Federal Aviation Administration’s Airport Improvement Program is funded at $3.52 billion in FY 2011—the same amount as in FY 2010.

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