Congress is considering legislation that will determine federal transportation funding allocations over the next five years and likely beyond. The House bill—the Building Unrivaled Infrastructure and Long-Term Development for America’s 250th Act, or BUILD Act (PDF)—would drastically cut transit funding nationwide and significantly set back infrastructure improvements.
Adjusted for inflation, the BUILD Act would authorize lower overall transportation funding than the current federal transportation legislation, the Infrastructure Investment and Jobs Act (IIJA), which expires on September 30, 2026. Transit and rail programs face some of the deepest cuts under the BUILD Act, which prioritizes funding instead for road and highway infrastructure. As public transit options face a greater risk of decline under these cuts, more people may turn to personal vehicles as they search for reliable transportation. At a time when Americans are paying more for gas, this could make transportation, which is already the second-highest expense for most US families after housing, even less affordable.
Nationally, we estimate that the BUILD Act would reduce authorized spending by the Federal Transit Administration (FTA)—the primary funder of new transit line construction in the country—over the next five years by at least 23 percent. The BUILD Act would need to add $24 billion in spending authorizations for transit to simply match IIJA funding levels, when adjusting for inflation.
Because Congress often makes minimal changes to its surface transportation strategy between reauthorizations, the BUILD Act could lower the funding baseline for decades to come. To avoid this outcome, support continued improvements in the nation’s multimodal transportation infrastructure, and help transit agencies properly plan for the future, Congress could instead prioritize and guarantee more transit funding.
How much would the BUILD Act cost your state in public transportation funding?
Using data on the distribution of federal formula program funds for transit between fiscal years 2022 and 2025, we estimated how much each state could lose in guaranteed FTA urban, rural, and State of Good Repair Grant funding under the BUILD Act. We estimate that each state would receive at least $10 million less in formula funds than they did under IIJA, and 22 states would lose at least $100 million. Unlike the national estimate above, these figures do not include discretionary programs, such as for new transit lines, which also face funding reductions.
Our estimates assume a 1 percent quarterly increase in construction costs, a conservative estimate that is substantially lower than the rate of construction cost inflation over the past five years. (Construction cost inflation increases more quickly than inflation in the economy overall.)
Source: Urban Institute analysis of USAspending.gov and FTA data, IIJA, and the proposed BUILD America 250 Act.
Notes: BUILD America 250 Act = Building Unrivaled Infrastructure and Long-Term Development for America’s 250th Act; FTA = Federal Transit Administration; IIJA = Infrastructure Investment and Jobs Act. To assemble these estimates, we compare planned federal contract authority in the proposed BUILD America 250 Act with formula funds distributed by the 2021 IIJA, as recorded in USAspending.gov. It includes funding for Urbanized Area Formula Grants (Section 5307), Enhanced Mobility of Seniors and Individuals with Disabilities (Section 5310), Formula Grants for Rural Areas (Section 5311), State of Good Repair Grants (Section 5337), Growing States/High Density States Program (Section 5340), and the Buses and Bus Facilities program (which includes both discretionary and formula bus funding because of how they’re combined in USAspending). This map does not otherwise include discretionary funding, such as from the Capital Investment Grants program. To adjust for inflation, we use changes in the National Highway Construction Cost Index, produced by the Federal Highway Administration, and then assume that the index increases at 1 percent per quarter over the next several years.
Because of how the BUILD Act proposes to allocate funding, some predominantly rural states would experience substantial declines in guaranteed formula transit funding. Idaho, North Dakota, Maine, Montana, and Wyoming, for example, would each lose more than 16 percent of their federal transit support.
Source: Urban Institute analysis of USAspending.gov and FTA data, IIJA, and the proposed BUILD America 250 Act.
Notes: BUILD America 250 Act = Building Unrivaled Infrastructure and Long-Term Development for America’s 250th Act; FTA = Federal Transit Administration; IIJA = Infrastructure Investment and Jobs Act. To assemble these estimates, we compare planned federal contract authority in the proposed BUILD America 250 Act with formula funds distributed by the 2021 IIJA, as recorded in USAspending.gov. It includes funding for Urbanized Area Formula Grants (Section 5307), Enhanced Mobility of Seniors and Individuals with Disabilities (Section 5310), Formula Grants for Rural Areas (Section 5311), State of Good Repair Grants (Section 5337), Growing States/High Density States Program (Section 5340), and the Buses and Bus Facilities program (which includes both discretionary and formula bus funding because of how they’re combined in USAspending). This table does not otherwise include discretionary funding, such as from the Capital Investment Grants program. To adjust for inflation, we use changes in the National Highway Construction Cost Index, produced by the Federal Highway Administration, and then assume that the index increases at 1 percent per quarter over the next several years.
These cuts could deeply affect communities across the country. Public transportation offers families an affordable alternative to driving, yet most US cities lag far behind other countries in terms of transit service availability and affordability. Rural areas in particular rely on federal support to provide transit services. Cutting federal transportation resources will only deepen these gaps and limit opportunities to pursue cost-efficient public transportation investments in the future.
What’s at risk in your community?
Next, we estimated how these state-level reductions in transit funding could extend to communities across the country. To do so, we evaluated the current distribution of federal transit funds among all US congressional districts.
Source: Urban Institute analysis of USAspending.gov and FTA data, IIJA, and the proposed BUILD America 250 Act.
Notes: BUILD America 250 Act = Building Unrivaled Infrastructure and Long-Term Development for America’s 250th Act; FTA = Federal Transit Administration; IIJA = Infrastructure Investment and Jobs Act. To assemble these estimates, we compare planned federal contract authority in the proposed BUILD America 250 Act with formula funds distributed by the 2021 IIJA, as recorded in USAspending.gov. It includes funding for Urbanized Area Formula Grants (Section 5307), Enhanced Mobility of Seniors and Individuals with Disabilities (Section 5310), Formula Grants for Rural Areas (Section 5311), State of Good Repair Grants (Section 5337), Growing States/High Density States Program (Section 5340), and the Buses and Bus Facilities program (which includes both discretionary and formula bus funding because of how they’re combined in USAspending). This map does not otherwise include discretionary funding, such as from the Capital Investment Grants program. To adjust for inflation, we use changes in the National Highway Construction Cost Index, produced by the Federal Highway Administration, and then assume that the index increases at 1 percent per quarter over the next several years. We first summed transactions from USAspending up to the county level using the place of performance county when available and the recipient county when it was missing. Funds are often distributed first to a state transportation department or state or regional transit agency before being disbursed across projects. As a result, the counties containing these entities often appear to receive disproportionate levels of funding. We made adjustments to more accurately estimate how funds are distributed across places. Across FTA’s Sections 5307, 5340, and 5337 programs and buses programs, we made several adjustments for different areas: 1) In Maryland and New Jersey, where nearly all state funds were recorded in Baltimore city and Newark and Essex County, respectively, we redistributed each state’s total funds to all counties in the state weighted by the number of transit riders; 2) In Minnesota, where all funds for these programs in the Twin Cities were recorded as going to Hennepin County, we redistributed those funds across Hennepin, Ramsey, Dakota, and Scott Counties, weighted by each county’s number of transit riders; 3) In New York City, where all funds for these programs were recorded as going to Manhattan and New York County, we redistributed those funds across New York County, Kings County, Queens County, Bronx County, and Richmond County, weighted by population. For all states, we distributed total state funds from the Section 5310 program among all counties by their share of transit riders. Similarly, we redistributed Section 5311 funding, which is meant to serve rural areas in each state, to all counties with at least 50 transit riders weighted by each county’s share of the state’s population living in nonurbanized areas. We then developed a relationship file to estimate distributions at the congressional district level from our county-level funding data. We weighted the distributions of funding to congressional districts by population.
On top of the authorizations that the BUILD Act proposes for formula programs, it includes additional authorizations for discretionary programs, which federal agencies distribute via a competitive application process. These programs provide an opportunity for the government to make funding available for communities that have historically been left behind by distribution formulas that generally fund states, rarely change, and often reinforce historic disparities in resources.
Though formula funds have always made up the vast majority (up to 90 percent) of available surface transportation funding, the BUILD Act’s authorizations for discretionary programs would be substantially lower than those under IIJA. This would result in cuts to programs like Capital Investment Grants, which funds new transit lines. And because these funds would not be guaranteed through advanced appropriations (as some discretionary transportation programs were under IIJA), they would be subject to annual congressional appropriations processes, meaning actual annual spending would be vulnerable to additional cuts. This would make the funding landscape unpredictable, which can drive up project uncertainty, costs, and timelines.
What comes next?
The next transportation reauthorization bill will reshape federal transportation spending for years to come. The BUILD Act proposes to cut transit funding for communities across the country. As Congress prepares to reauthorize transportation funds, policymakers should consider options to make transportation more affordable, such as:
- Authorizing more transit funding to maintain national momentum. Restoring funding levels to match those authorized by IIJA, accounting for inflation and construction costs, would be a first step in reducing the effects of the funding reductions in this bill. We estimate that the BUILD Act would have to add $24 billion in funding authorizations to what is currently proposed to match IIJA. In addition, Congress could identify programs that warrant funding above and beyond IIJA levels to meet acute transportation needs.
- Guaranteeing transit funding. Transportation projects benefit when funding levels are guaranteed in advance. Congress can bring back advanced appropriations for transit programs such as the discretionary Capital Investment Grants program to ensure transit agencies can plan for projects into the future.
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