The President's unveiled his 2011 budget proposal this week, calling for a $41.36 billion obligation ceiling for highways and a $10.8 billion funding level for transit. It also proposes a $19.1 billion transfer of funds to the Highway Trust Fund, to keep it solvent through March of 2011.

In a series of briefings on Monday, Secretary of Transportation Ray LaHood outlined the Administration's funding priorities for the upcoming year. He said, "President Obama's budget builds on an historic first year for this Department of Transportation. In addition to making critical investments in our nation's infrastructure, we jump started high speed rail across America, launched a campaign against distracted driving, and proposed landmark transit safety legislation."

"This budget reflects our priorities and values by continuing to invest in safety, livable communities, and an improved national transportation system," he said, citing a new $50 million incentive grant program to the states to combat distracted driving.

Visit TransportationTV for a newscast on the budget proposal, featuring an analysis by Jack Basso, AASHTO's Director of Program Finance and Management.

Highways

The budget proposal requests $41.363 billion for the highway obligation limit in FY 2011, compared to the $41.107 enacted in 2010. That represents an increase of roughly 0.6 percent.

While the proposal amounts to a virtual "freeze" on highway spending in FY 2011, transportation experts were pleased to see that the Administration assumes that the highway funding baseline will be restored to that of FY 2009. Total rescissions of $11.8 billion served to reduce highway funding levels by $1 billion a month under the program extensions that have occurred since SAFETEA-LU expired. The House-passed jobs bill H.R. 2847 would restore that baseline level to allow funding to return to 2009 levels.

Regarding the $19.1 billion transfer of funds into the Highway Trust Fund, the budget appendix specifically states that the budget proposal does not embody any of the Administration's policy recommendations regarding authorization, but rather is a "depiction that recognizes that under current law, maintaining baseline spending would require support from the General Fund." The Administration continues to urge that Congress defer action on a long-term authorization until spring of 2011.

Transit

The Federal Transit Administration is slated to receive a total of $10.8 billion, also an increase of 0.6 percent over last year. The Administration proposes to trim the largest transit category, formula and bus grants from $8.343 billion to $8.271 billion and to rename it Transit Formula Grants. The formula funding would be divided with $4.634 billion slated for urbanized areas, $547.8 million for non-urbanized areas, and $230 million for grants for the transportation of the elderly and handicapped.

Some $307 million that program would be transferred to a new program called Livable Communities, which would include such programs as Job Access and Revere Commute, Alternatives Analysis, and Metropolitan and Statewide Planning.

The budget calls for $1.82 billion for Capital Investment Grants, including 925 million for projects with full-funding grants agreements, and $199.6 million for small starts.

A new Rail Transit Safety Oversight program is proposed at $30 million.

National Infrastructure Investment Fund

The Administration proposes a $4 billion discretionary, multimodal grant program for grants and credit assistance for transportation projects of regional or national significance. The grants are to be directed to three categories: transportation projects, such as highways, bridges, commuter rail, etc.; transportation components of non-transportation projects; and transportation infrastructure that "increases the environmental sustainability of the transportation network in a region."

Rail

The budget proposal calls for a $1 billion allocation for the High-Speed and Intercity Passenger Rail program. Amtrak funding would include $1.052 billion for capital grants, up from $1.002 this year, and $563 million for operating grants, a continuation of the current level.

Aviation

For aviation, the Administration would propose to maintain the Airport Improvement Program at $3.515 billion, although $5 million would be shifted from grants to airports to airport technology research.

Total funding for the Federal Aviation Administration would increase by 5.6 percent to $16.468 billion.

Next Steps

Prospects for ultimate enactment of the Administration's budget proposal are uncertain. Some members of Congress have remained cool to the idea of a budget freeze for discretionary spending, while still others want to see more stringent reductions in light of the federal deficit picture. Congress will now develop its own budget resolution, that will serve as a guideline to appropriators as they consider spending bills for FY 2011.