On February 12, 2018, President Trump released an infrastructure proposal, which may provide an impetus for Congress to develop a spending plan. On the same day, he proposed a fiscal year 2019 budget. Staff will present the proposals and possible impacts to TAMC.

It is difficult to see the impacts of the federal infrastructure proposal or proposed budget as anything but disastrous for transportation funding in California. Both proposals drastically cut funding for transit and rail programs. The proposals rely on local, state and private funding for infrastructure projects. Fortunately for TAMC, California passed Senate Bill (SB) 1 and voters approved Measure X for transportation projects in Monterey County in 2017. However, both funding programs are extremely limited, focused on "fix it first" projects, as the State and County are behind on infrastructure investments, and SB 1 faces a possible recall in 2018. Additionally, the federal proposal gives only partial credit for funding already raised, giving more emphasis to funds raised after February 2018.

Online as web attachments are the full Administration infrastructure proposal, the accompanying news release that summarizes the proposal, the FY 2019 budget proposal, and a few articles assessing these proposals.

The President's outline of principles for an infrastructure funding proposal suggested using $200 billion in federal funding over 10 years to stimulate $1.5 trillion in overall spending via "partnerships" with state, local, and private investments. The plan is intended to fund a variety of infrastructure projects, including broadband, energy, water, and surface transportation. For TAMC, key concerns with the infrastructure proposal include:

• The proposal provides no new funding, despite rumors that the President would support an increase in the federal gas tax. The gas tax funds the highway trust fund, but the tax has remained 18.4 cents per gallon since 1993, and it hasn't kept pace with inflation as cars became more fuel-efficient. Instead, the proposal shifts funding away from important transit and rail programs to new "incentive" programs intended to encourage states and local jurisdictions to raise their own transportation funding via sales or property taxes, user fees, or public private partnerships.
• The proposed "incentives" program gives credit for locally raised revenues, such as California's Senate Bill (SB) 1 or Monterey County's Measure X, but it penalizes those funds based on how recently enacted they are, giving most credit for "new" local funding (i.e., raised after February 2018).
• The proposal reverses the historic funding agreement between the US Government and states and localities, requiring an 80% match to federal funds instead of the historical 20% match.
• The definition of "rural" is state-level rather than county-level, meaning that Monterey County might not qualify for a set-aside of rural funding.

One element of the infrastructure proposal TAMC would support is the streamlining of the National Environmental Policy Act, if it allows the California Environmental Policy Act (a more stringent law) to qualify for NEPA review.

The Administration's FY 2019 budget proposal calls for deep cuts in public transportation programs funded out of the General Fund. It is important to note that the actual amounts appropriated for FY 2018 and FY 2019 will ultimately be determined by the congressional appropriations process. For TAMC, key concerns with the President's proposed budget include:

• A proposed halving of funding for Amtrak, including the proposal that long-distance trains should be the responsibility of the states through which those trains travel. Amtrak provides a critical regional transportation link to the Salinas Valley and Central Coast.
• Cuts to the Capital Investment Grants program, limiting funding only to those projects with Full Funding Grant Agreements. TAMC has not received CIG funding but could be eligible for such funding in the future for rail service projects.
• Elimination of the Transportation Investments Generating Economic Recover, or "TIGER" grants. TAMC has not yet received a TIGER grant, but has applied several times.
• Elimination of Consolidated Rail Infrastructure and Safety Improvements and State of Good Repair grant programs, which TAMC's rail partners have used for increasing and improving rail services in the region.

Meanwhile, the Democrats released a "Better Deal to Rebuild America" proposal of a $1 trillion federal investment in infrastructure (see web attachment). The two-page outline includes few details about a source of funding that it asserts would not add to the deficit, presumably via an increase in the gas tax. The road to negotiating an infrastructure funding bill given these disparate proposals is likely to be a bumpy one.

Staff will present a verbal update at the meeting.

• Legislative Outline for Rebuilding Infrastructure in America (55 pages, 2 MB)
• White House News Release
• Fiscal Year 2019 Budget Proposal
• Democrats' Infrastructure Proposal