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Trump's budget proposal puts Red Line grant funding in doubt

March 16, 2017

IndyGo’s chances of landing federal grant funding for its Red Line bus rapid-transit project may be dimming.

President Donald Trump’s preliminary budget proposal, released Thursday, indicates that the president wants to eliminate the Federal Transit Administration’s Capital Investment Program—the program that would fund the Red Line grant.

In February 2016, the Federal Transit Administration recommended the Red Line project for a $75 million grant as part of that agency’s Capital Investment Program, also known as New Starts. That grant would cover most of the cost of building the Red Line between East 66th Street at College Avenue and the University of Indianapolis.

The grant’s status has been in a holding pattern for more than a year because of congressional and administrative transitions.

Trump's "Budget Blueprint," which outlines funding priorities for the 2018 federal budget, would fund the U.S. Department of Transportation at $16.2 billion, representing a 13 percent decrease from its current funding level.

More specifically, the proposal “limits funding for the Federal Transit Administration’s Capital Investment Program (New Starts) to projects with existing full funding grant agreements only. Future investments in new transit projects would be funded by the localities that use and benefit from these localized projects.”

IndyGo Director of Public Affairs Bryan Luellen said the news was “a little shocking,” though he had also heard rumblings that Trump might propose such cuts.

“As a country, we have started to expect the unexpected,” Luellen told IBJ.

The FTA’s New Starts program is for project with a total capital cost of $300 million or more, seeking federal grant funding of $100 million or more. The Red Line is classified as a Small Starts project because its total cost and grant request fall below those financial thresholds. 

Trump’s proposal does not specifically address the fate of Small Starts grants.

But the general understanding in the transit community, Luellen said, is that Trump wants to cut the entire FTA Capital Investment Program.

Luellen said that was the message conveyed on a Thursday afternoon conference call between the FTA and transit systems across the U.S. that are awaiting word of grant-funding decisions.

Luellen also said IndyGo will continue to advocate for the grant funding and has not given up hope that the grant will come through.

“This is a beginning negotiation point for the (Trump) administration. This is not a done deal,” Luellen said. “There are a lot of questions, and this is the beginning of the process.”

Ultimately, it will be up to Congress to approve the 2018 federal budget. 

In the meantime, Luellen said, IndyGo is moving forward with its Red Line plans.

Last month, the Indianapolis City-County Council approved a 0.25 percent income tax designed to raise money for local transit improvements. Tax collections begin in October, and IndyGo says the tax will generate at least $54.4 million a year starting in 2018.

IndyGo has said that it can still build the Red, Blue and Purple lines and make other transit improvements even if the federal Red Line grant doesn't come through. Without the grant, IndyGo says, the improvements will take longer to finish and will be slightly scaled back.
 

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