Last Tuesday, the Federal Transit Administration (FTA) announced a $1.36 billion allocation of Capital Investment Grant (CIG) funding. The money, drawn from streams of both fiscal years (FY) 2018 and 2019 allocated funds, will be directed at 11 existing projects and 5 new projects.
The announcement arrives amid criticism that the FTA has been slow to release funds. Transit advocacy groups like Transportation for America are vocally campaigning to speed delivery of allocated funds, claiming the Administration is intentionally stalling delivery.
In addition to criticism of delays, advocates have larger existential concerns regarding the program. The president’s FY 2018 and FY 2019 budgets excluded funding for new CIG projects and indicated a desire by the Administration to wind down the entire program.
The president’s recently released FY 2020 budget and the Federal Transit Authority FY 2020 CIG recommendations include a billion dollar overall cut to the program, but also provide $500 million for new projects, the first new project funding since FY 2017. The Administration has reached a fork in the road and appears to be trying to go both directions.
CIG Background
The CIG Program, overseen by FTA, funds transit capital investments under three primary grant programs: Small Starts, New Starts, and Core Capacity. More information on the three programs can be found here.
Congress most recently authorized CIG under the 2015 FAST Act at $2.3 billion annually for fiscal years 2016 through 2020. As a discretionary program, CIG is subject to the annual appropriations process.
CIG Within the FTA Budget
Since the signing of the FAST Act, CIG dollars have constituted approximately eighteen percent of the overall appropriations provided for the FTA. As shown in Table 1 below, the president’s FY 2020 budget proposes cutting CIG funding by $1 billion. If enacted, this cut would drop the CIG’s portion of overall FTA funding to approximately twelve percent.
Winding Down the Program?
The Administration recommended massive cuts of $1.2 billion for FY 2018 and $1.0 billion for FY 2019. Congress ultimately appropriated CIG funds for FY 2018 and FY 2019 at authorized levels, but the Administration’s signaling on the program was clear: stop funding new projects and phase out existing work.
The FY 2019 FTA Annual Report on Funding Recommendations spelled this out. “For the remaining projects in the CIG program, FTA is not requesting or recommending funding. Future investments in new transit projects would be funded by the localities that use and benefit from these localized projects.” (emphasis FTA)
After Congress appropriated full CIG funding for FY 2019, Director of the Office of Management and Budget Mick Mulvaney responded with a letter stating that “the Administration believes the additional resources provided …would be better utilized by being allocated to the State of Good Repair Formula Program.”*
*For added context on administration positions regarding CIG funding: the Obama Administration recommended $3.5 billion of funding in FY 2017. Appropriators did not, however, follow this recommendation and funded the program at $2.4 billion, near its authorization level.
Breaking Down CIG Appropriations
The president’s FY 2020 budget includes limited detail of how the total $1.505 billion of recommended funding will be distributed between the different CIG programs. The only detail provided is that $995.29 million of the funding will be used for 11 existing projects and $494.85 million will be used for new projects under the three primary grant programs as well as the recently developed Expedited Delivery Pilot Program.
How Will FTA Distribute the $500 Million for New Projects?
Prior to FY 2018, money allocated to new projects was distributed among specific projects named within the president’s budget. As funding for new projects was not written into FY 2018 and FY 2019 budgets, there was no need to name projects.
The president’s FY 2020 budget proposal provides new project money, but like the FY 2018 and FY 2019 budgets, does not specifically name new projects. This lack of project naming, as well as the complaints made about slow fund distribution, has resulted in changes to the CIG selection process.
Without a clear pipeline for selection and fund distribution, Congress chose to set deadlines by which CIG funds need to be allocated. While solving the problem of fund withholding, these new deadlines also created a side effect: the Administration now treats readiness as a top criterion for project selection.
Project Selection Criteria for CIG in FY 2020
FTA lists the following general guidelines for project selection:
- Readiness of funding for CIG grant obligation by statutory deadlines;
- Non-CIG funding committed,
- Critical third party agreements complete,
- Firm and final cost/scope/schedule,
- Technical capacity of the project sponsor,
- Geographic diversity of project for a national funding program;
- Extent of overmatch proposed by the project sponsor; and
- Extent of innovative funding proposed including value capture, joint development, and public-private partnerships.
Looking Ahead
The FY 2020 budget and appropriations process has only just begun, and the only certainty is that there will be more changes before any funding levels are finalized. While the Administration’s inclusion of $500 million for new projects is a notable shift in tone from FY 2018 and FY 2019, the overall cuts to the program prevent this new funding from serving as an endorsement of the program.
Transportation planners and officials hoping to have their project selected for CIG funds will need to continue to assess the ways in which selection criteria are affected by both the overall funding structure of the program as well as the Administration’s view of the program within the context of other infrastructure funding.
NARC will continue to track CIG funding during the budget and appropriations process, as well as during upcoming discussions on transportation reauthorization and the development of an infrastructure package.