ARTBA Analysis of the Obama Administration’s FY 2014 Budget Proposal for Transportation

Editor: Hank Webster

For months, President Obama has been talking about the importance of increased transportation investment, both to support the economic recovery and to strengthen the long-term outlook for the U.S. economy.  The FY 2014 budget proposal for the federal government—submitted by the administration to Congress April 10 puts flesh to the rhetoric by proposing substantial funding increases for federal transportation investment in FY 2014 and beyond. However, the failure of the administration to recommend a realistic source of funds to support its investment proposals suggests that, beyond funding for the core transportation investment programs, the President’s transportation budget requests will run into resistance in Congress.

The main proposals include:

• Immediate Transportation Investments.  The budget proposes a one-time $50 billion appropriation for immediate transportation improvements in FY 2014, including $40 billion for “Fix-it-First” investments to improve existing infrastructure assets most in need of repair and $10 billion to help spur states and local innovation in infrastructure improvements.  Similar proposals in the past have not been acted on by Congress.
• Federal Highway Program.  In the Moving Ahead for Progress in the 21st Century Act (MAP-21), Congress enacted an obligation ceiling of $40.256 billion for the federal highway program for FY 2014 plus $739 billion of contract authority and emergency relief funding that is not subject to the limitation, for a total of $40.995 billion.  The President’s budget request is identical to MAP-21.
• Public Transportation.  MAP-21 authorized a total of $10.695 billion for the public transportation program for FY 2014, including $1.907 billion for capital investment grants, also known as the New Starts Program.  The budget requests $10.91 billion for the public transportation program, including $1.98 billion for the transit New Starts Program, which is slightly more than the amount enacted in MAP-21.
• Airport Improvement Program.  The FAA Modernization and Reform Act of 2012 authorizes $3.35 billion for the Airport Improvement Program for FY 2014, which provides grants to airports for capital improvements to runways and related projects.  The budget proposes to reduce this to $2.90 billion by eliminating funding for large hub airports and allowing these airports to increase passenger facility charges to finance their own airport improvements.
• Partnership to Rebuild America.  In recent speeches, President Obama has proposed a “Partnership to Rebuild America” that calls for establishing a $10 billion National Infrastructure Bank, new “America Fast Forward (AFF) Bonds,” expansion of the “Transportation Infrastructure Finance and Innovation Act” (TIFIA) and “Transportation Investment Generating Economic Recovery” (TIGER) programs, lifting the national cap and expand eligibility for “Private Activity Bonds” (PABs), and changing the tax treatment of foreign pension funds to attract increased investment.
• TIFIA.  MAP-21 increased funding for the TIFIA program from $122 million in FY 2012 to $750 million in FY 2013 and $1 billion in FY 2014.  The President’s budget request includes the full $1 billion for FY 2014.

The following table summarizes the President’s budget proposal for the core transportation investment programs for FY 2014.

To read ARTBA’s full analysis of the administration’s proposal, please click here