Federal Continuing Resolution Details & Transit Impacts

Federal Update – September 24, 2020

  • Given the overwhelming margin of Tuesday’s House vote (359-57) on the Continuing Resolution (C.R.), it is looking good that the Senate will pass it as well along with a signature by President Trump. The CR runs thru Friday Dec. 11. Passage is needed prior to Oct 1 to avoid a federal government shutdown.
  • Attached to the CR is a 1-year extension of the FAST Act. This is good, since a one-year extension is realistic, instead of cobbled together short monthly extensions. This also means FY21 FTA formula funds are predictable.
  • Because the Highway Trust Fund and its Mass Transit Account are heading into insolvency from lack of sufficient dedicated revenues and inaction by Congress, the CR adds $10.4 billion to the Highway Account and $3.2 billion to the Mass Transit Account from the General Fund, so full FY21 formula amounts can be paid. Also, it stalls an automatic cut in FTA formula funds due to the impending insolvency (the Rostenkowski test). The bad news is by further delay, Congress is making the Trust Fund insolvency fiscal cliff greater. That means the money gap between trust fund spending and trust fund dedicated revenues that needs to be filled next year in the reauthorization bill will be even greater, but that’s a “next year” issue to be determined by the results of the presidential election and the new Congress, so the current Congress isn’t focused on it.
  • Despite having a CR in place to Dec 11, FTA will not make a partial year apportionment of FY21 formula funds until there is more FY21 budget certainty, nor will there be any agency discretionary grants until there’s a final FY21 budget. It’s possible there could be a final FY21 federal budget in December, but it’s more likely that will occur in February or March. So despite the federal fiscal year starting Oct 1 and a CR along with a FAST Act extension (both an appropriations and an authorization law need to be in place for FTA formula funds to flow), FY21 formula funds won’t be accessible until sometime in 2021.

So, in summary, the good news is there’s predictability on the amount of FY21 FTA formula funds, plus there won’t be a federal shutdown where FTA and FRA staff get furloughed and grant processing delayed. The bad news is 2021 reauthorization will be harder financially and there will be a wait getting FY21 FTA funds.

Stay tuned to SWTA’s e-newsletter and for additional details as they emerge.


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