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Is SunRail already facing a shortfall in federal funding?

Bloomberg Government transportation analyst Matthew Zisman reports that federal funding for SunRail may already be in jeopardy, noting that the U.S. House of Representatives has suggested eliminating the federal New Starts program, the transit initiative supplying money for SunRail.

Under a full funding grant agreement, the Federal Transit Administration has recommended providing a $178 million grant for the first phase of SunRail, about half of the federal government's commitment to the project's $615 million construction costs. But Congress still needs to appropriate the money.

The FTA has agreed to provide $40 million for SunRail in the fiscal year ending Sept. 30, 2011, and the agency previously allocated $66.6 million, Zisman reports. "That leaves $72 million of FTA funding in future fiscal years that could be at risk if the program is cut," Zisman writes.

Complicating the issue: Under the terms of the agreement, SunRail needs to be operating by May 1, 2014. Failure to meet that deadline is considered a breach of the contract. The FTA can extend the deadline, but "delays in appropriations of funds from Congress shall not constitute a basis" for extending the deadline, according to the agreement.

Here's a response to Zisman's report from Joyce Rose, staff director of the House's Railroads Subcommittee:

It is true that Congress will still need to appropriate funding for New Starts program in order for Florida DOT to receive the final $72 million under the SunRail FFGA. However, full funding grant agreements are contracts between the federal government and project sponsors – a fact that is recognized by Congressional committees. Traditionally, the first dollars appropriated for New Starts (or allocated by FTA in the years there have not been New Starts earmarks) have been to honor FFGA commitments.

SunRail is not alone in this situation. There are a dozen other rail transit projects nationwide that are currently under a full funding grant agreement and will require federal funding in FY 2012.

The House Budget Resolution report language does call for the termination of the New Starts program. However, this is a non-binding resolution – the bill language of the resolution itself does not make a cut to New Starts. The Transportation, Housing and Urban Development Appropriations Subcommittee will have the flexibility to allocate their General Fund budget authority as they see fit. These will be tough choices, because we must do more with less. But the House action will not be the last word -- the annual appropriations process requires both House and Senate action, followed by a conference to come to a unified agreement before the bill becomes law.