New White House Directive Resurrects Transportation Funding Uncertainty

What happened: A White House memo issued Jan. 27 renewed questions about the flow of reimbursements to state and local transportation agencies for federal-aid transportation projects. In the document, the Office of Management and Budget (OMB) ordered a temporary pause to “all activities related to obligation or disbursement of all Federal financial assistance.” The hold was to take effect across the federal government at 5 p.m. EST Jan. 28.  However, a federal judge Tuesday afternoon blocked the pause until at least Feb. 3, giving the court time to review a complaint filed by a public health coalition.

Why it matters: This week’s memo followed an Executive Order  signed by President Trump shortly after taking office Jan. 20, which targeted initiatives such as electric vehicle charging infrastructure. Nonetheless, that document appeared to order a pause on funding for all projects authorized under the Infrastructure Investment and Jobs Act. OMB issued a clarification the following day, which kept funds flowing to most federal-aid transportation projects. The new OMB memo states a similar rationale to last week’s Executive Order, focusing on “green new deal social engineering,” among other concerns.

What’s next: According to news reports and contacts made by ARTBA staff, further clarification on transportation program funding is expected soon. There will likely be distinctions drawn between formula projects, which would continue largely uninterrupted, and those funded by discretionary grants, which could be subject to further reviews.

As of Tuesday evening – whether because of the court order or interpretation of the OMB memo by officials at the U.S. Department of Transportation – ARTBA confirmed that the financial management system used by the Federal Highway Administration to reimburse states remains up and running. ARTBA will continue updating members on the very fluid situation in the coming days and will work to ensure minimal impacts to the transportation construction industry.