DOT’s FY 2011 Budget Proposal Includes $4 Billion for New National Infrastructure Bank

For Immediate Release: February 4, 2010
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The President’s FY 11 budget request for the Department of Transportation (DOT) is $78.8 billion, representing an increase of almost $2 billion (two percent above FY 10 appropriations). The minor increase reflects both the depleted reserves in the Highway Trust Fund (HTF) that funds federal surface transportation programs and an implied assumption that Congress will not pass a new transportation authorization bill before March 2011. In fact, the Obama administration has qualified the DOT budget request as a “placeholder” that highlights the critical need for major policy and funding reforms. The budget also notes a significant drop in funding relative to FY 09 which included supplemental funding from the American Recovery and Reinvestment Act of 2009 (P.L. 111-5). Within this constrained funding level, however, increased priorities on long-term investment, safety, and livability are evidenced in shifts in resources that are substantial in some cases but modest overall.

The President’s FY 11 budget request for DOT includes:

• $4 billion in seed money for National Infrastructure Innovation and Finance Fund (National Infrastructure Bank), which will help create new transportation funding mechanisms and introduce performance-based funding measures.
• $1 billion in annual funding for high-speed and intercity rail improvements, in addition to previous funding of more than $10 billion.
• $527 million to new livability initiatives within Federal Highway Administration (FHWA) and Federal Transit Administration (FTA).
• Funding for a special greenhouse gas reduction program within FTA is reduced from $75 million to $53 million .
• Modest increases to dedicated safety programs, such as the National Highway Traffic Safety Administration (NHTSA); prioritizes safety criteria for core capital programs.

Priorities for long-term investment are exemplified by a $4 billion initial seeding of a national infrastructure bank. Financing from the bank would be competitive based on project performance and ability to meet national or regional objectives. This important funding innovation points to the need to improve how transportation infrastructure will be funded in the future. The Obama administration’s signature high-speed and intercity rail program is allocated $1 billion after initial investments of more than $10 billion over the past two fiscal years.

Safety is DOT’s number one stated priority according to the administration, though explicit funding for safety programs, e.g. NHTSA, would receive minor increases under this proposed budget—again reflecting ongoing fiscal and funding mechanism constraints. Within the various capital funding programs that dominate DOT’s budget, however, the administration is overlaying safety as a primary factor for how these funds are used.

Livability—the administration’s term for increased emphasis on how transportation shapes community development and can provide Americans more travel options—is evidenced in the proposed budget by more than $500 million in new funding, split between the Federal Highway Administration (FHWA) and the Federal Transit Administration (FTA). A focus on livability is expected to have benefits for air quality, public health, energy savings, and greenhouse gas (GHG) reduction. The rest of the proposed budget, however, represents very little change in how these issues and public goals are addressed. A special fund to help reduce GHG emissions within FTA, in fact, saw a significant decrease from $75 million to $53 million . Though it is ultimately more important how these smaller funds leverage and influence larger capital expenditures, a substantial decline in resources for these efforts is inconsistent with the need for transportation to play a proportional role in meeting the nation’s GHG reduction goals.