May 25, 2017

The 2018 budget requests $11.226 billion in total resources for the Federal Transit Administration (FTA). The full $9.733 billion in spending from the Highway Trust Fund for formula grants is requested. But where general fund spending for transit is concerned, the request for FTA Capital Investment Grants is cut almost in half from the level authorized in the FAST Act – from $2.3 billion to $1.2 billion.

The budget requests the full 2018 installment payment projects of all 12 CIG projects that currently have full funding grant agreements (FFGAs) that have been signed and executed by FTA. These total $1.108 billion. In addition, Transportation Secretary Chao told Senator Dianne Feinstein (D-CA) over the weekend that she would sign the pending FFGA for Caltrain electrification, which will take another $100 million in 2018, bringing the committed total to $1.208 billion.

Take away 1 percent of the appropriation for oversight activities per the statute, and that only leaves $11.8 million in the account at the requested level. This is not enough for the estimated 2018 payments for any of the five projects that are currently in the New Starts Engineering phase and expect to get their FFGAs executed in 2017 or 2018 (Santa Ana streetcars, Maryland Purple Line, Minneapolis Blue Line LRT extension, Minneapolis Southwest LRT, and Seattle Lynwood Link).

In the 2018 New Starts Annual Report issued this week, the FTA states “When preparing funding recommendations for the upcoming fiscal year, FTA honors the commitments made in existing construction grant agreements. New projects not yet under construction grant agreements are recommended for funding only if proposed CIG funding levels are sufficient.”

Therefore, the Administration is using its own budget proposal and its lack of money in 2018 and beyond to justify its refusal to sign the FFGAs for the Purple Line and the other projects under New Starts Engineering, which would require an additional $3.4 billion in federal appropriations in 2018 and future years if their FFGAs get executed.

The Purple Line and Seattle-Lynwood have already received significant appropriations from Congress in advance of FFGA execution, because Senators Barbara Mikulski (D-MD) and Patty Murray (D-WA) were (and in the latter case still are) extremely senior and powerful members of the Senate Appropriations Committee. But attempts by Congress to force the Trump Administration to sign particular FFGAs and release previously appropriated funds, or commit future appropriations, are on uncertain legal ground.

The House and Senate Parliamentarians have been interpreting the self-imposed “earmark” bans in both chambers as exempting projects requested in the President’s budget. Congress can deny funding for projects that were in the budget request, and can increase or reduce funding for projects requested by the President, but it cannot fund new projects that were not in the budget request without violating the earmark ban.

Therefore, it does not appear that Congress can provide funding in the 2018 appropriations process for projects that were not requested for funding in the 2018 New Starts Report without violating the earmark ban (unless Congress gets rid of the earmark ban, as many members from both parties wish, many secretly).

Getting DOT to release the appropriations made in previous years for certain CIG projects, or forcing DOT to release future appropriations, is also legally problematic. The statute (49 U.S.C. §5309) says that the Secretary “may” enter into FFGAs under certain conditions, not “shall” enter into them. And while the Impoundment Control Act normally requires the executive branch to make appropriations available for obligation for the purposes appropriated, subject to delays that are limited by statute, this is complicated for these particular projects for two reasons:

1. The appropriations laws for the last few years do not mention specific projects – only the conference statement of managers or other explanatory statements list specific projects and dollar amounts for them. Such extralegal report language is not necessarily legally binding on agencies. It’s a gray area.
2. Appropriations for the CIG account are “no-year” funding, i.e. “available until expended,” so there is no actual deadline for the executive branch to put the funds out there before forfeiting them, complicating the Impoundment Control Act calculus.

In the rest of the mass transit budget, funding for FTA overhead is requested at $110.8 million, between the enacted 2016 and 2017 levels, and grants to WMATA get a pro forma cut from $150.0 million to $149.7 million in the request because FTA was freezing at the “haircut” rate in the FY17 CR. (FY 2018 is year 9 of the 10-year $1.5 billion WMATA authorization under the 2008 PRIIA law).

The budget does not request any money for FTA research or training programs from the general fund, which got a $5 million appropriation in 2017.