White House budget blueprint calls for 13 percent cut in DOT funding

While the White House has lofty aspirations with its proposed $1 trillion infrastructure investment plan, it looks like there may be some harsh budgetary realities to deal with first, considering the proposed cuts for the United States Department of Transportation (DOT) as per President Trump’s budget blueprint, which was released yesterday.

Under the proposed 2018 budget, the White House is requesting $16.2 billion for DOT’s discretionary budget, which represents a $2.4 billion, or 13 percent, decrease from the annualized 2017 level.

Despite the proposed cuts, the White House said that this budget request “reflects a streamlined DOT that is focused on performing vital Federal safety oversight functions and investing in nationally and regionally significant transportation functions and investing in nationally and regionally significant transportation infrastructure projects,” adding that it “reduces or eliminates programs that are either inefficient, duplicative of other Federal efforts, or that involve activities that are better delivered by the States, localities, or the private sector.”

One proposed budget cut that relates directly to transportation infrastructure is the elimination of funding for the TIGER (Transportation Investment Generating Economic Recovery) discretionary grant program. The objective of the TIGER program is to ensure that economic funding is rapidly made available for transportation infrastructure projects and that project spending is monitored and transparent.

Since 2009, the TIGER grant program has provided a combined $5.1 billion to 421 projects in all 50 states, the District of Columbia, Puerto Rico, Guam, the Virgin Islands, and tribal communities.  These federal funds leverage money from private sector partners, states, local governments, metropolitan planning organizations and transit agencies.  DOT noted that the 2016 TIGER round alone is leveraging nearly $500 million in federal investment to support $1.74 billion in overall transportation investments.

But cutting TIGER would save $499 million from the 2017 annualized CR level, according to the budget. And it added that the DOT’s National Significant Freight and Highway Projects grant program, which is authorized by the FAST Act, supports larger highway and multimodal freight projects with demonstrable national or regional benefits and is authorized at an annual average of $900 million through 2020.

A report in The Hill said that DOT Secretary Elaine Chao expressed support for the TIGER Grants and the Transportation Infrastructure Finance and Innovation Act program during her confirmation hearing, and Sen. Bill Nelson (D-Fla.) said in the report that the TIGER grants are essential to rehabbing U.S. infrastructure.

In an interview, Katie Thomson, head of the Transportation Industry Group at Washington, D.C.-based law firm Morrison & Foerster and former general counsel at the U.S. DOT and chief counsel at the Federal Aviation Administration, explained that this budget proposal does not reflect promises made by Trump, when he was campaigning for President.

“President Trump has repeatedly promised to invest substantially in transportation infrastructure as part of his plan to ‘Make America Great Again,’” said Thomson.  “Just last week the American Society of Civil Engineers (ASCE) released its latest quadrennial report on the state of infrastructure in the U.S. and gave our infrastructure system a D+.  ASCE also conservatively estimated that the U.S. needs to invest nearly $5 trillion in the coming years simply to bring our system up to a good state of repair.  Despite Trump’s promises, the budget proposal digs the hole even deeper.  This is remarkably short-sighted as a safe and efficient transportation system will drive economic growth across the country.” 

In regards to TIGER, Thomson said one of the unique aspects of the TIGER program is that it – unlike existing discretionary and formula funding at DOT –  allows local governments to compete on an equal footing with states for critical infrastructure projects.  And she noted It also allows various government entities partner (e.g., multiple states, communities and/or regions) to fund regionally and nationally significant projects in a way that had never been done before and also allocates specified amounts for rural and tribal projects. 

“All of these attributes have made the TIGER program extremely popular with members of Congress,” she said. “The elimination of this program would return DOT and the States to the former, rigid funding structure that jeopardizes innovative transportation projects that build for the future.”

Thomson’s position on removing TIGER grants was echoed by Leslie Blakey, executive director of the Coalition for America’s Gateways and Trade Corridors.

“A very damaging cut in the Transportation Department budget is zeroing out the TIGER Program,” she said. “Discretionary competitive grants like TIGER are one of the most effective tools we have for leveraging federal dollars for infrastructure projects. Research has shown that by advantaging proposals that present an innovative finance package for a project, we create an incentive for project sponsors to reduce their dependence on federal funding and encourage more use of private capital as funding partners.”

CAGTC added that TIGER and the National Significant Freight and Highway Projects grant program are not interchangeable in that the latter was developed with a freight-focused investment criteria and TIGER addresses “a multitude of mobility issues,” including freight, mixed-use infrastructure, and transit, with only 26 percent of Fiscal Year 2016 TIGER funding allocated for projects with a strong freight component.