There is $3 Billion Available in Federal Transit Funds

This will be the last post in the series on Federal Transit Funding through the Fixed Guideway Capital Investment Grants (also known as Section 5309) program. In the first post I provided an overview of overall federal transportation funding and introduced the program and in the second post I described where the funds are currently going and the large share that California is receiving. This post will take a look forward to estimate how much funding is available in the pipeline over the next few years.

Over the next four years, there is almost $3 billion in federal funding available for large transit projects.[1] This certainly leaves opportunities for projects currently going through the development process but it probably means that only a handful (3 or 4) of new projects could be fully funded right now. While both Hillary Clinton and Donald Trump have called for additional investment in infrastructure, will they actually be in position to do that during their first terms or will this become a campaign issue in 2020 as federal transportation funding will be expiring?

In order to come up with an estimate of how much funding is available in the pipeline I used three sets of data:

  1. The overall funding level that is available in existing law, which is roughly $2.3 billion per year through Fiscal Year 2020 (ending September 30th, 2020).
  2. The amounts that have been committed, spent, and remaining on existing Full Funding Grant Agreements (FFGAs) and each project’s estimated schedule (see Table 1 below).
  3. The planned Section 5309 federal shares for projects currently in the Engineering phase (the last step before an FFGA), which is when the amount of federal funding is locked in, and the planned schedule for the FFGA and the project (see Table 2 below).

Table 1. Current Funding Picture for Existing Full Funding Grant Agreementsffga-projects

As Table 1 shows, many of the projects with existing FFGAs will be completed before the current appropriation runs out, but not all of them. So to calculate the amount of funding available I assumed that the amount left in the FFGA would be distributed evenly over the years leading up to revenue service. This is an imperfect but reasonable assumption and approximation of project cash flows.

Table 2. Funding Plan Assumptions for Projects in Engineeringprojects-in-engineering

*Note: the University Corridor LRT project is undergoing potential changes and may not move forward at all so the potential date for the FFGA and revenue service is unknown.

Similar to the existing FFGAs, I assumed that the federal share would be evenly distributed between when the FFGA is expected to be signed and when revenue service is expected to start. This does not include any funding for the University Corridor LRT project in Houston as the timeline is unknown at this point so if some portion of that project’s potential $782 million in federal funds were to start being used before 2020 (which is possible) then the amount available would decrease accordingly.

Exhibit 1. Total Estimated Amount of Funds for Existing FFGAs, Projects in Engineering, and Available for New Projectsavailable-funds

What Exhibit 1 shows is that there is a total of almost $3 billion in funding available through 2020 as existing FFGAs wind down. Some of the projects with current or expected FFGAs will continue past 2020 but until more projects move through the pipeline and the next transportation funding bill is signed it’s hard to guess how much funding may be available beyond that point. For now, the lesson for project sponsors is to keep moving as quickly as they can to take advantage of currently available funding before others get there first!




[1] This does not include any amounts that might go toward Small Starts projects which have a total cost of less than $300 million and a Section 5309 share of less than $100 million. Although there are such projects in the pipeline, that process is different so the federal share does not get locked in until the grant is awarded and there are no such grants currently outstanding. I wouldn’t expect Small Starts projects to be more than a few hundred million dollars in total over the next few years.


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