DOT BUDGET REQUEST FOR FY26

The Trump Administration late Friday submitted more details regarding their budget request for fiscal 2026 (they had recently submitted a "skinny budget" that provided overall spending totals but no real details). There were more details about the Department of Transportation request compared with other departments, which will presumably be released in the coming days.

Surprisingly the proposed budget calls for $144 billion for DoT in FY 2026, which represents a 2.4% increase from the current fiscal year. The big surprise is that the Trump Administration is proposing a 6.4% increase in annual appropriations.

One major proposed cut is a $5.7 billion cut from unobligated balances for two Electric Vehicle-related programs: the Charging and Refueling Corridor program, and the National Electric Vehicle Charging Formula program. This, of course, is no big surprise as the Trump Administration had already stopped obligating funds for these programs once they came into office in January.

Beyond that, there really does not appear to be any significant proposed reductions. State DoTs will be pleased that the formula highway programs (with their authorized proposed increases for FY 26) were left untouched, in addition to a number of discretionary programs that benefit the highway programs nationwide.

The Administration does propose to zero out the RAISE/BUILD program and the Federal-State Partnership grants, but that represents a very small amount of funding, and it would be surprising if Congress goes along with cutting off the Federal-State Partnership program.

The Trump Administration has not yet proposed rescissions of funding but, apparently, this week the Administration will begin to propose rescissions; the kick off this week will likely be $9 billion in proposed rescissions — and more are expected in the coming days and weeks.

Another surprise in the Administration's proposal for the DoT is the budget for the Federal Railroad Administration where they propose a 10.8% increase from the 2025 funding level. And a particular area that was thought to be a target for proposed cuts was Amtrak spending under the Federal-State Intercity program. Instead, that program is proposed to receive $7.2 billion in IIJA authorized funding in FY 2026 with the Trump budget showing no proposed reductions.

Also a bit unexpected is the CRISI program — the Administration proposes to grow CRISI from the current $1.1 billion in FY 2025 to $1.5 billion in 2026. Clearly there is strong political backing for CRISI funding.

An additional surprise, the budget request for Federal Transit Administration is $17 billion for 2026, which is nearly a 2% increase over the current fiscal year. When you add in the $4.25 billion in IIJA advance appropriations, it totals over $21 billion for FY 26. Most importantly, there are no proposed changes to the Transit formula grants, which are proposed to receive the $363 million increase under the IIJA. This means CRC agency members will see some small growth in their formula allocation if Congress goes along with the President's proposal.

Further, the Trump Administration proposed to flatline the Capital Investment Grant program at $2.2 billion. The additional $1.6 billion in Advance Appropriations provided under the IIJA for the CIG program makes for a $3.8 billion pot. Again, this program has been a perennial target of conservative Republicans and likely we will see some efforts in Congress to cut it, but to see the Trump Administration propose full funding for that program is a bit of a shock.

The information about headcounts in the budget submission appears to be wildly off. The numbers do not in any way reflect the reductions that have already taken place from rounds of dismissals and proposed early departures. It is our understanding that DoT will soon be submitting a plan for reorganization that will lay out their headcount plans. This reorganization, however, will require congressional approval and as we have heard from Democratic staff, the Democrats will not agree to the staff level reductions and will also likely object to any changes in responsibilities. The President, of course, can still proceed to reduce headcount and leave positions vacant, but it seems unlikely that he will get congressional approval to do so.

DoT is separately reporting that FTA has lost about 30% of its headcount so far, but we have heard it is more like 40% and may go higher. This is the highest percentage reduction of all the modal administrations and there may be more proposed reductions announced soon. There are also some internal discussions underway at DoT that include the prospect of closing regional offices at several of the modal administrations.

Lastly, the Senate will commence this week with their effort to complete the reconciliation bill. Committees affected by the House proposed reconciliation will report this week to Senate leadership. Then the discussions will get underway with the Senate Parliamentarian regarding what issues can be considered under reconciliation. This so-called "Byrd Bath" where issues are debated back and forth with the Senate Parliamentarian could take several weeks. Stand by for more details on that. A clear path to passage has not emerged as several Republican Senators have expressed concerns over provisions in the House-passed bill.