CSAC Bulletin Article

Trump Administration to CA: Federal Highway Funds at Risk

September 26, 2019

This week, the U.S. Environmental Protection Agency (EPA) notified California that it stands to lose billions of dollars in federal transportation funds as a result of the state’s failure to submit “timely and approvable” air pollution control plans. Under the federal Clean Air Act (CAA), the California Air Resources Board (CARB) is responsible for submitting State Implementation Plans (SIPs) to EPA on behalf of the state’s 35 local air pollution control agencies. SIPs are required to be in place in any area of the country that does not meet federal air quality standards.

In its September 24th letter to CARB, the EPA notes that California has a disproportionate share of backlogged SIPs, many of which have “fundamental issues related to approvability.” As a result, the Agency is recommending that California withdraw its pending SIPs and develop new implementation plans. If CARB fails to do so, EPA intends to begin a disapproval process, which would trigger statutory clocks for funding sanctions that could result in the loss of billions of dollars in federal highway funds. Under the CAA, the administration could not impose the financial penalties until 18 months from the onset of the disapproval process.

Current federal highway funding in California amounts to about $4 billion annually. While minimal federal highway funding flows directly to counties, local grants of federal funds for bridge, highway safety, and active transportation projects are available through Caltrans, and regionally-significant local projects receive federal funds through regional governments.

It should be noted that EPA’s letter to CARB comes on the immediate heels of the Trump administration’s formal withdrawal of California’s authority to set its own vehicle emissions standards. Under an Obama-era waiver issued by EPA in 2013, CARB has been allowed to set stricter air-quality standards than those imposed at the federal level. Incidentally, the revocation of California’s CAA waiver could prevent a number of major transportation projects from receiving federal funding.

As expected, the State of California – along with 22 other states – has filed a lawsuit to stop the Trump administration from moving forward with the revocation of the waiver. Pursuant to federal law, the dissolution of the waiver authority is not slated to take effect until late November.

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