Department of Transportation Budget FY2012

Congressional research reportNov 10, 2011

Ask Donna

What actually matters in this document.

Text

(name redacted)

Analyst in Transportation Policy

November 10, 2011

Congressional Research Service

7-....

www.crs.gov

R41650

CRS Report for Congress

Prepared for Members and Committees of Congress

Department of Transportation Budget FY2012

Introduction

The President’s Department of Transportation (DOT) budget request for FY2012 totaled $123.9

billion. It was divided into two parts: a “base” request of $78.6 billion, and a one-time “up-front

boost,” related to the President’s proposal for surface transportation reauthorization beginning in

FY2012, of $50 billion.

The base request was $1.7 billion (2%) more than the FY2010 enacted DOT budget of $76.9

billion. The total request is $53 billion over the FY2010 enacted level. See Table 2 for detailed

figures on the request and Congressional action.

One might ask how this increase was possible in light of the President’s stated intention to freeze

overall federal discretionary spending in FY2012 (and after) at the FY2010 level. It is possible

because most DOT funding is not discretionary funding; it comes from the Highway Trust Fund,

and is therefore categorized as mandatory funding. Thus, virtually all of the proposed increase

counted as an increase in mandatory rather than discretionary funding. Furthermore, the FY2012

DOT budget request proposed to shift funding for some accounts from the general fund to the

highway trust fund (which would be renamed the “transportation trust fund”). This had the effect

of reducing the total discretionary funding requested for DOT in FY2012 compared to the amount

provided in FY2011, all else being equal.

The FY2012 budget request was complex because it did two different things at once: it requested

funding for DOT programs for FY2012, and it restructured the major surface transportation

program accounts and funding structure. The latter changes reflected elements of the

Administration’s proposal for reauthorizing surface transportation programs for the next six years.

The changes included adding intercity rail and new transit construction programs to the programs

financed from the trust fund, and increasing the flow of revenues to the fund, although the source

of the additional revenues was not specified.

Congress had not passed an FY2012 DOT appropriations bill by the time the 2012 fiscal year

began. DOT funding is currently being provided by a continuing resolution (P.L. 112-36, the

second one passed for FY2012), which will expire on November 19, 2011.

Congressional action on FY2012 DOT appropriations was delayed due to several factors. First,

the FY2011 appropriations act for DOT and other federal agencies was not finalized until April

15, 2011.1 Second, the House-passed budget for FY2012 and subsequent 302(b) allocation of

discretionary funding for the Department of Transportation, Department of Housing and Urban

Development, and Related Agencies appropriations bill called for cuts to highway funding,

among other accounts, that were so steep that some doubted they could pass; perhaps for this

reason, action on the bill in the House was postponed. The Senate did not pass a Budget Act for

FY2012. Soon after completion of FY2011 appropriations, congressional attention was taken up

by protracted negotiations over raising the federal debt limit. These negotiations included

discussion of the overall FY2012 appropriations level. Action on raising the debt ceiling. as well

as setting an overall FY2012 appropriations level, was not concluded until August 2, 2011, with

enactment of the Budget Control Act of 2011.2

P.L. 112-10, The Department of Defense and Full-Year Continuing Appropriations Act, 2011.

P.L. 112-25

Congressional Research Service

Department of Transportation Budget FY2012

The Senate Committee on Appropriations reported out an FY2012 appropriations bill for the

Department of Transportation (and HUD and related agencies), S. 1596, on September 21, 2011.

This bill has been combined with two other appropriations bills (Agriculture and CommerceJustice-Science) in a “minibus” (as opposed to “omnibus”) appropriations bill, H.R. 2112. That

bill was approved by the Senate on November 1, 2011.

The House Committee on Appropriations Subcommittee on Transportation, Housing and Urban

Development, and Related Agencies approved a draft bill by voice vote on September 8, 2011.3

The unnumbered draft bill has not been taken up by the full committee. Press reports indicate that

the House and Senate are conferencing on the minibus bill.

Selected Budget Issues

Comparison of FY2011 and FY2012 figures

DOT funding has typically increased from year to year. The FY2011 appropriation broke that

trend, with an overall new funding level of $72.6 billion, $4.3 billion (5.5%) less than the

comparable FY2010 level. The FY2012 budget request proposed a restructuring of DOT surface

transportation programs and a $50 billion “up-front” appropriation, on top of DOT’s requested

base FY2012 funding, to provide an immediate boost to transportation infrastructure

improvement and job creation. This up-front funding was depicted as an alternative to the typical

surface transportation reauthorization funding plan, in which funding levels gradually increase

over an authorization period of several years. This appropriation would have front-loaded a large

increase in funding in the first year of the Administration’s proposed six-year surface

transportation reauthorization plan, with funding levels for each of the subsequent five years

lower than the total for FY2012.

The Administration has not yet submitted legislation to implement their reauthorization proposal;

the existing authorization for surface transportation programs has been extended. Thus, while the

FY2011 enacted funding and the House and Senate figures for FY2012 are comparable,

comparing the surface transportation figures to those in the FY2012 budget request is complex.

This requires an unwinding of the proposed new program structures in the Administration’s

request to be able to compare the request to the existing program structure, and decisions about

how to allocate the additional $50 billion request for up-front funding between discretionary

funding and mandatory funding.

The Senate Committee on Appropriations allocated about $20 billion of the up front funding

request to discretionary funding, resulting in a discretionary budget request of $34.0 billion,

compared to enacted new funding of $17.6 billion in FY2011. The remaining $30 billion was

allocated to mandatory (trust fund) budget authority, resulting in a request for $94.4 billion, up

from $54.2 billion enacted in FY2011.

The text of the draft bill (http://appropriations.house.gov/UploadedFiles/FY_2012THUD.bill_xml.pdf) and of an

accompanying draft report (http://appropriations.house.gov/UploadedFiles/FY_2012THUDReport.pdf) is available at

the committee’s website.

Congressional Research Service

Department of Transportation Budget FY2012

Essential Air Service (EAS)

The President’s budget requested $123 million for the EAS program, a $27 million (12%)

decrease from the $150 million Congress provided in FY2011. The Senate approved $143 million

for the program for FY2012; the House Appropriations Committee THUD subcommittee draft

bill recommended $100 million. These funds are added to $50 million that is reserved for the

program each year, so the total funding proposed by the Senate for FY2011 is $193 million,

compared to a total of $200 million in FY2011 (and the same amount in FY2010).

This program seeks to preserve air service to small communities by subsidizing the cost of that

service. Supporters of the EAS program contend that preserving airline service to small

communities was a commitment Congress made when it deregulated airline service in 1978, as

anticipated reductions in air service due to deregulation were claimed to reduce economic

development opportunities in rural areas. Critics note that the subsidy cost per passenger is

relatively high, that many of the airports in the program serve few passengers, and that some of

the airports receiving EAS subsidies are little more than an hour’s drive from major airports

The costs of the program have more than doubled since FY2008. This is due to several factors.

Route reductions by airlines have resulted in an average of six new communities joining the

program each year in recent years. Also, there is a requirement that planes servicing EAS

communities must have, at a minimum, capacity to carry 15 passengers. Detractors of this

requirement note that smaller planes would be cheaper to operate and that the number of

passengers at many EAS airports could be handled by smaller planes.

The Administration proposed to limit FY2012 funding in the program to those communities

which received subsidies in FY2011 (the same proposal was made for the FY2011 budget,

seeking to limit recipients to those funded in FY2010), and to eliminate the 15-passenger aircraft

requirement. The Senate-passed bill supported both of these proposals. The House draft bill

supported the limit on new recipients.

Highway Trust Fund

Most highway and transit funding is taken from the Highway Trust Fund, whose revenues come

largely from the federal motor fuels excise tax. For several years, expenditures from the fund

have exceeded revenues; for example, in FY2010, revenues were approximately $35 billion,

while expenditures were approximately $50 billion. Congress transferred a total of $34.5 billion

from the general fund of the Treasury to the Highway Trust Fund during the period FY2008FY2010 to keep the trust fund solvent. The Congressional Budget Office projects that the trust

fund will become insolvent around the end of FY2012.

The President’s budget proposed to rename the fund the Transportation Trust Fund and to increase

authorized expenditures from the Fund to $554 billion over the next six years by increasing the

funding levels of existing surface transportation programs and by adding the Federal Railroad

Administration and the Federal Transit Administration’s New Starts transit construction program

to the programs funded by the fund. This proposal reflects, in part, a recommendation of the

National Commission on Fiscal Responsibility and Reform to expand the Highway Trust Fund to

cover rail infrastructure – but the Commission also recommended increasing the gas tax by 15

Congressional Research Service

Department of Transportation Budget FY2012

cents per gallon by 2015, then limiting expenditures from the Fund to match its revenues.4 The

budget request does not propose an increase in the gas tax, nor does it explain how the Fund

would support the proposed higher level of expenditures; it says that the President does not

support an increase in the federal gasoline tax, but will work with Congress to find new revenue

sources.

The House draft states that it provides funding from the Highway Trust Fund at a level that the

revenues of the Fund can support in FY2012; this results in a reduction of 35% from FY2011

levels for the two largest accounts supported by the Highway Trust Fund (from $41.1 billion to

$27.0 billion for the federal-aid highway program account, and from $8.3 billion to $5.2 billion

for the transit formula and bus grant funding account).

The Senate bill’s committee report said that it recommended the levels of funding for highway

and transit that are authorized in the SAFETEA extensions; that is virtually the same level as in

FY2011 ($41.1 billion for highways and $8.4 billion for transit). The report did not address the

Highway Trust Fund’s revenue difficulties.

National Infrastructure Bank (I-Bank)

The budget proposes $5 billion for a national infrastructure bank. The bank would provide loans

or grants to finance transportation projects having national or regional significance. Such projects,

such as major bridges on the interstate highways system, are often difficult to build under the

current structure of transportation funding, because they benefit the residents of many states but

their costs fall on the residents of the state in which the project is located. In the past, such

projects have sometimes been financed through specific funding designations by Congress. The

national infrastructure bank would, according to the Administration, provide a means for such

projects to be evaluated and for the most productive projects to be selected and financed.

Legislation to implement this proposal was not enacted, and the proposal was not funded by the

House draft or the Senate-passed bill.

National Highway Traffic Safety Administration (NHTSA)

Although the budget request represented an $18 million cut in overall funding from the $878

million provided in FY2011, the request noted that, with the funding available from completion

of the $124.5 million Safety Belt Performance Grants program, the request would allow the

agency “to increase funding for all ongoing primary enforcement, safety, or rulemaking

activities.”5 The Senate-passed bill provided $800 million; the House draft recommended $731

million.

The National Commission on Fiscal Responsibility and Reform, “The Moment of Truth,” December 2010,

Recommendation 1.7, p. 24, http://www.fiscalcommission.gov/sites/fiscalcommission.gov/files/documents/

TheMomentofTruth12_1_2010.pdf.

Department of Transportation, FY2012 Budget Highlights, p. 24; available at http://www.dot.gov/budget/2012/

fy2012budgethighlights.pdf.

Congressional Research Service

Department of Transportation Budget FY2012

High Speed and Intercity Passenger Rail

The budget proposes $4 billion for high speed and intercity passenger rail development under a

new account, Network Development. This is described as the first year of a proposed six-year,

$53 billion program. High speed and intercity passenger rail development is seen as a way of

creating new jobs, providing a new transportation option for intercity travel, and increasing the

capacity, competitiveness, and environmental sustainability of the transportation system. To date,

Congress has provided $10.1 billion for DOT’s high speed and intercity passenger rail grant

program, beginning with $8 billion in the American Recovery and Reinvestment Act of 2009.

In common usage, references to “high speed rail” are generally taken to mean systems such as

those of Japan, France, Spain, and China, where trains travel on dedicated networks at speeds

greater than 150 mph. Perhaps because it is convenient to abbreviate references to this program

by dropping the middle phrase “and intercity passenger rail,” it is often taken to be a program

designed just to fund high speed lines similar to those in other countries. But much of the funding

in this program has gone to develop intercity passenger rail service with top speeds of 90 or 110

mph.

In its public comments the Administration has emphasized the high speed rail portion of the

program. Critics have questioned the economic efficiency of building expensive high speed rail

lines, or even of improving conventional rail lines. While grants have been awarded to 23 states,

after the elections of November 2010, the new governors of three states—Wisconsin, Ohio, and

Florida—rejected grants for rail projects for which their states had received grants totaling $3.6

billion.6 The governors said their states could not afford the costs of improving or building and

maintaining rail lines that would likely require ongoing operating support. The Administration

redistributed the grant money to the many other states pursuing passenger rail development.

In the Full Year Continuing Appropriations Act, 2011, which was enacted after the Administration

submitted its FY2012 budget request, Congress eliminated funding for the high speed and

intercity passenger rail grant program for the balance of FY2011, and rescinded $400 million of

the unobligated portion of the $10.5 billion already appropriated. The FY2012 Senate bill

provides $100 million for the grant program. The FY2012 House draft does not include any

funding for the program.

Amtrak Funding

The budget proposed to place Amtrak funding into a new Federal Railroad Administration

account, System Preservation. This account would fund public rail asset development and

maintenance; at present, Amtrak would be the only recipient of grants, though in the future

competition for the grants is envisioned. Amtrak’s FY2012 grant request totaled $2.2 billion; it

received $1.6 billion in FY2010.7 It appears that the budget request envisioned $1.5 billion for the

program the “base” funding (comparable to the $1.5 billion Amtrak received for FY2011), and

Although Florida’s governor has rejected the project, the project apparently had not been officially canceled as of

February 23, 2011, and press reports indicate that efforts are being made to salvage the project.

Amtrak, FY2012 Grant and Legislative Request, February 7, 2011, Table 1; available at http://www.amtrak.com

(Inside Amtrak>Reports and Documents).

Congressional Research Service

Department of Transportation Budget FY2012

another $2.5 billion that would come from the up-front supplemental funding, for a total request

of $4 billion.8

The Senate bill would provide $1.48 billion for Amtrak; that is almost identical to the amount

provided in FY2011, but $80 million less than provided in FY2010. The House draft would

provide $1.12 billion.

Federal Transit Administration

New Starts and Small Starts (Capital Investment Grants)

FTA’s Capital Investment Grants program funds new fixed-guideway transit lines and extensions

to existing lines. It is is commonly referred to as the New Starts and Small Starts. New Starts

(major capital investment projects) include capital projects with total costs over $250 million

which are seeking federal more than $75 million in federal funding. Small Starts include capital

projects with total costs under $250 million which are seeking less than $75 million in federal

funding.

New Starts projects must go through a multi-stage process, during which they are repeatedly

evaluated by FTA. Projects must receive positive ratings to proceed to the next step. The final

step is signing of a full-funding grant agreement (FFGA) with FTA. The FFGA details how much

funding the project will receive from FTA and the steps of project development. One purpose of

the FFGA is to encourage accurate estimates of project costs; cost overruns are the responsibility

of the grantee.

The Capital Investment Grants program received $2.0 billion in FY2010; in FY2011, it received

$1.6 billion.

For FY2012, the Administration requested $3.2 billion for the New Starts program (see Table 1).

The Senate-passed bill would provide $2.0 billion, the level provided in FY2010 but $400 million

more than the amount provided in FY2011. This would cover the majority of the costs for

existing Full Funding Grant Agreements and pending Full Funding Grant Agreements. The House

draft recommended funding at approximately the FY2011 level ($1.6 billion).

Table 1. Proposed FY2012 FTA Capital Investment Projects by Category

(in millions of dollars)

Existing Full Funding Grant Agreements

$835

Pending Full Funding Grant Agreements

1,295

Recommended New Full Funding Grant Agreements

444

Recommended Small Starts Funding Agreements

181

Other Recommended New Starts/Small Starts Funding Agreements

400

Oversight

Total

$3,236

Source: FTA, Annual Report on New Starts Funding Recommendations, FY2012, Table 1, p. 6

(http://www.fta.dot.gov/documents/Annual_Report_main_text_FINAL_2_11_11.pdf).

Based on the crosswalk table in the Federal Railroad Administration’s FY2012 Budget Estimate, p. 109.

Congressional Research Service

Department of Transportation Budget FY2012

Bus Rapid Transit Eligibility

Bus rapid transit (BRT) is a transportation system that enables bus routes to operate at higher

capacity by adding some of the characteristics of heavy-rail transit (e.g., subways), such as

operating in dedicated lanes without having to stop at traffic signals. Supporters of BRT see it as

an way of getting the greater operating capacities of heavy rail at a lower cost. Critics of BRT

note that comprehensive BRT systems may not be much less expensive than fixed-guideway

systems, and that communities are tempted to leave out elements of a comprehensive BRT system

in order to reduce costs, which also leads to poorer performance.

The Senate bill would direct DOT to fund new bus rapid transit projects (“bus new fixed

guideway projects”) that were recommended in the FY2012 New Starts request from the FTA’s

Bus and Bus Facilities discretionary grant program rather than from the New Starts grant

program. The Bus and Bus Facilities grant program is under the same account as New Starts (both

are part of the Transit Capital Investment Program, along with a third sub-program, the Fixed

Guideway Modernization Program). The Bus program provides funding to communities to

purchase buses, rehabilitate buses, and provide related facilities (e.g., maintenance facilities,

transfer facilities, intermodal terminals, park and ride facilities, passenger shelters). Bus fixed

guideway projects are eligible for funding under the Bus program. This would have the effect of

increasing the amount of funding available for other New Starts projects, and decreasing the

amount of funding available to other bus and bus facilities projects.

New Starts Funding Share

The federal share for New Starts projects can be up to 80%. Since FY2002, DOT appropriations

acts have included a provision directing FTA not to sign any full funding grant agreements that

provide a federal share of more than 60%. This provision was again included in the Senate bill.

The draft House bill has a similar provision, except that it would lower the maximum federal

share to 50%.

Critics of this provision note that the federal share for highway projects is typically 80% and in

some cases is higher. They contend that, by providing a lower share of federal funding (and thus

requiring a higher share of local funding), this provision tilts the playing field toward highway

projects when communities are considering proposed new transportation projects. Advocates of

this provision note that the demand for New Starts funding greatly exceeds the amount that is

available, so requiring a higher local match allows FTA to support more projects with the

available funding. They also note that requiring a higher local match likely encourages

communities to scrutinize the costs and benefits of transit projects more closely.

Congressional Research Service

Department of Transportation Budget FY2012

Table 2. Department of Transportation FY2012 Detailed Budget Table

(in millions of current dollars)

Department of Transportation

Selected Accounts

FY2012

House

Draft

FY2010

Enacted

FY2011

Enacted

FY2012

Request

—

5,000

Essential Air Servicea

200

150

123

100

143

National Infrastructure Development

600

527

2,000

—

550

890

808

2,289

230

830

Operations

9,350

9,514

9,823

9,674

9,636

Facilities & Equipment

2,936

2,731

2,870

2,798

2,631

191

170

190

175

157

3,515

2,424

3,350

3,515

Total, FAA

15,992

15,929

18,656

15,997

15,938

Federal Highway Administration (FHWA)(total)

42,789

41,846

70,514

27,739

43,746

Motor Carrier Safety Operations and Programs

240

245

276

230

250

Motor Carrier Safety Grants to States

310

330

300

307

550

555

606

530

557

Operations and Researchb

249

246

250

232

250

Highway Traffic Safety Grants to States

620

550

495

550

873

878c

860

731

800

2,500

(400)e

—f

—

100

—

4,000

—

1,565

1,484

—g

1,126

1,481

—

4,046

—

4,360

1,306

8,229

1,342

1,787

Formula and bus grants

8,343

—

5,200

8,361

Capital investment grants (New Starts)

2,000

1,597

—

1,554

1,955

10,733

10,017

22,350

7,043

10,630

Maritime Administration (MARAD)

363

359

358

335

353

Assistance to small shipyards

—

National Infrastructure Bank

FY2012

Senate

—

Office of the Secretary (OST)

Total, OST

Federal Aviation Administration (FAA)

Research, Engineering, & Development

Grants-in-Aid for Airports (AIP) (limitation on

obligations)

Federal Motor Carrier Safety Administration (FMCSA)

Total, FMCSA

National Highway Traffic Safety Administration (NHTSA)

Total, NHTSA

Federal Railroad Administration (FRA)

High-speed and intercity passenger rail grant

programd

Network Development

Amtrak

System Development

Total, FRA

Federal Transit Administration (FTA)

Total, FTA

Congressional Research Service

Department of Transportation Budget FY2012

FY2010

Enacted

FY2011

Enacted

FY2012

Request

FY2012

House

Draft

FY2012

Senate

Pipeline and Hazardous Materials Safety Administration

(PHMSA)

193

202

220

183

208

Research and Innovative Technology Administration

(RITA)

Office of Inspector General

Saint Lawrence Seaway Development Corporation

Surface Transportation Board

Appropriation (discretionary funding)

21,877

17,612

33,951

16,747

19,807

Limitations on obligations (mandatory funding)

54,244

54,249

94,432

36,685

54,199

Exempt contract authority (mandatory funding)

739

76,860

72,600

129,122

54,171

72,985

—

1,900

21,877

17,612

33,950

16,747

18,046

-422

-3,886

-57

-54

-139

21,455

13,726

33,893

16,693

17,907

Department of Transportation

Selected Accounts

DOT Totals

Total non-emergency budgetary resources, DOTh

Emergency appropriations

Total non-emergency discretionary funding

Rescissions

Net new discretionary budget authority

Source: FY2010 enacted figures from the CSBA tables in H.Rept. 111-564 and S.Rept. 111-230; FY2012 figures

taken from the CSBA table in S.Rept. 112-83, except numbers for the House draft bill taken from the text of the

text of the draft bill and draft committee report and a summary table published on the House Appropriations

Committee site (http://appropriations.house.gov/).

Notes: Subtotals may not add due to omission of some accounts. Subtotals and totals may differ from those in

the source documents due to treatment of rescissions, offsetting collections, etc. The figures in this table reflect

new budget authority made available for the fiscal year. For budgetary calculation purposes, the source

documents may subtract rescissions of prior year funding or contract authority, or offsetting collections, in

calculating subtotals and totals.

These figures include the $50 million in mandatory funding received by the Essential Air Service each year.

The FY2012 request also counts $22 million in unobligated balances from previous years, for a total of $195

million.

Includes National Driver Register Modernization funding.

Reduced to $796 million for budget purposes by a $76 million rescission of contract authority.

FY2012 base figure is calculated by CRS.

No new funding for FY2011; rescinded $400 million from previous years’ appropriations.

The Administration requested $4 billion for a proposed new Network Development program, which would

have included the High Speed and Intercity Passenger Rail Grant Program, and would have been funded

largely from the $50 billion “up front” increment.

The Administration requested $4 billion for a proposed new System Development program, which have

included grants to Amtrak, and would have been funded largely from the $50 billion “up front” increment.

Figures reflect budgetary resources, except DOT FY2012 request reflects budget authority; DOT FY2012

budget requests $123.9 billion in budgetary resources, $128.6 billion in budget authority.

Congressional Research Service

Department of Transportation Budget FY2012

Author Contact Information

(name redacted)

Analyst in Transportation Policy

/redacted/@crs.loc.gov, 7-....

Congressional Research Service

EveryCRSReport.com

The Congressional Research Service (CRS) is a federal legislative branch agency, housed inside the

Library of Congress, charged with providing the United States Congress non-partisan advice on

issues that may come before Congress.

EveryCRSReport.com republishes CRS reports that are available to all Congressional staff. The

reports are not classified, and Members of Congress routinely make individual reports available to

the public.

Prior to our republication, we redacted names, phone numbers and email addresses of analysts

who produced the reports. We also added this page to the report. We have not intentionally made

any other changes to any report published on EveryCRSReport.com.

CRS reports, as a work of the United States government, are not subject to copyright protection in

the United States. Any CRS report may be reproduced and distributed in its entirety without

permission from CRS. However, as a CRS report may include copyrighted images or material from a

third party, you may need to obtain permission of the copyright holder if you wish to copy or

otherwise use copyrighted material.

Information in a CRS report should not be relied upon for purposes other than public

understanding of information that has been provided by CRS to members of Congress in

connection with CRS' institutional role.

EveryCRSReport.com is not a government website and is not affiliated with CRS. We do not claim

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.