How will the federal budget affect Oregon’s transportation funding?
us_capitol_200.gifWashington, DC has been awash in talk about what the sequester and the recently-approved budget for federal fiscal year 2013 mean for various programs.  While these budgetary actions will cut spending for many federal programs, surface transportation investments escaped the ax—for the most part.
The sequester lopped about five percent off most federal discretionary spending, but not from the surface transportation programs.  “Virtually all of the highway, transit, and safety programs funded from the Highway Trust Fund are exempted from the sequester,” according to Travis Brouwer, ODOT’s Federal Affairs Advisor. “So we don’t anticipate any significant impacts to the state’s federal funding.”
There were a handful of exceptions to the general rule of surface transportation spending being spared, primarily for programs funded outside the Highway Trust Fund.
·         Highway Trust Fund transfer.  The federal surface transportation act, Moving Ahead for Progress in the 21st Century (MAP-21), was to transfer $6.2 billion from the general fund to the Highway Trust Fund’s Highway Account in FY 2013.  This transfer will get hit by the sequester, reducing the Highway Account’s balance by about $360 million.  This will not translate into a direct reduction of funding for highway programs, but it will mean the Highway Trust Fund will run out of cash and need another infusion earlier than it otherwise would.  Budget analysts expect the Highway Account to make it to the end of MAP-21 on September 30, 2014 before it runs dry—though it could be close.
·         FTA New Starts. The Federal Transit Administration (FTA) New Starts program, which pays for expansions of fixed guideway transit systems like light rail, streetcar and bus rapid transit, will be reduced by around $100 million. While Oregon projects like Portland-Milwaukie Light Rail (PMLR) and the I-5 Bridge Replacement Project rely on New Starts funds, it is unlikely that either project will have any difficulty securing their full allocation of funding.  PMLR already has a full funding grant agreement in place and the CRC is well-advanced in the New Starts funding process; the impact will be on projects that are farther back in line.
·         FTA Administration.  FTA’s staff is paid out of the general fund, so FTA employees will be subject to furloughs just like most federal employees.
·         Amtrak.  Although Amtrak programs are subject to the sequester, the passenger rail corporation does not plan to cut service due to record levels of ticket revenue.  As result, Oregon’s passenger rail service—including the long-distance Coast Starlight from Seattle to Los Angeles and the Cascades trains from Eugene to Seattle and Vancouver, BC—shouldn’t be impacted.
The final budget for 2013 passed by Congress in March also turned out well for surface transportation, as the highway, transit and safety programs were funded at the level set under MAP-21.  One pleasant surprise was another round of funding for the multimodal TIGER program.  The effect of the budget funding programs at the FY 2012 level is to provide half a billion dollars for TIGER—and then have it hit by sequestration, leaving about $475 million available.  Oregon has done very well under the TIGER program, and the Oregon Transportation Commission will offer support to key projects once the application process is announced.