Future of federal grant for Red Line uncertain as Trump calls for transportation funding cuts

INDIANAPOLIS, Ind. - President Donald Trump's budget proposal has some departments bracing for major cuts.  While he wants to see a boost in military spending, he is calling for a 13 percent, or $2.4 billion, decrease in transportation funding.

The budget blueprint comes as Indy Go prepares to start building the Red Line and the rest of the Marion County transit plan. Last month, the city-county council approved an income tax hike to fund the system. A $75 million federal Small Starts grant is supposed to help pay for the Red Line. The federal money is still in limbo awaiting congressional approval.

President Donald Trump's proposal shows he wants to phase out the New Start and Small Start grant programs, which provide funding for transit projects around the country. The budget blueprint states funding for these programs would be limited to projects with "existing full funding grant agreements only." Future investments in new transit projects would be funded at the local level. The Red Line does not currently have an existing full funding agreement, according to the Federal Transit Administration.

Indy Go CEO Mike Terry said the President's proposal is surprising due to the focus on infrastructure during the campaign.

"Congress is ultimately the one that will decide on priorities in funding," Terry said.

Terry said he is hopeful the grant money will come through this year.

"It could be awarded still for 2017," he said. "It’s in the budget for 2017. It’s still active. We’re just waiting for congress."

Congress delayed approving the 2017 budget until the end of April.

Indy Go officials have repeatedly said the Red Line and the full transit system can still be built, even without the federal funds.

"It could be done but it’s going to take a little bit longer and some additional bonding," Terry said.

The full build out of the rapid transit system would be delayed for three years, according to Indy Go materials. The bond debt would double to $176 million.

In November, voters approved an income tax hike that would fund transit in Marion County. Residents were told the federal government was expected to offset the cost of building the Red Line through the $75 million grant. A potential lack of federal funding would mean revenues from the income tax hike would also be used to build the Red Line.

"That puts the burden of cost on our Marion county residents much greater than had originally been promised," said city-county councilor Christine Scales. "I think they were misled quite a bit."