Rescinded federal funds: “happy new year” for local government projects?
If half your projects stalled, what changes would you make?
The Trump administration takes power next month. Trump has threatened to “rescind all unspent funds” of the Inflation Reduction Act. That 2022 legislation and its slightly older sibling, the Bipartisan Infrastructure Law of 2021, house nearly 90 programs funding state and local government projects.
Whether you work in state or local government or you serve it at a private agency (such as for public involvement), a clawback could disrupt your Gantt charts, your revenue streams — and your service to constituents. Want to do what you can to protect and prepare?
To the spreadsheets!
List the projects you’re most likely working on next year.
For each, dig through the documentation and find which programs the federal funding (if any) comes from. Remember that state-level funding can be federal money passed through.
Next, check these long lists of grant programs that roll up under the Inflation Reduction Act and under the Bipartisan Infrastructure Law. (Scroll down a screen or two at each.)
Are any of those programs helping to fund any of your projects?
That’s a lot to check, but here’s a possibly useful cheat. Transportation projects typically are the most numerous. Given that, programs administered by the Federal Highway Administration may be the ones to watch closest.
Under the Inflation Reduction Act:
Neighborhood Access and Equity (NAE) grants, for local governments.
Low Carbon Transportation Materials Discretionary grants, for state DOTs.
Environmental Review Implementation Funds, for state and local governments.
Under the Bipartisan Infrastructure Law:
Safe Streets and Roads for All grants, for regional and local governments.
Tribal Transportation Program Safety Fund grants, maybe especially in the west.
Commuter Authority Rail Safety Improvement grants, if your area has commuter rail.
Projects funded through these programs may warrant further scrutiny of what lies ahead.
Further scrutiny
Which capricious Trump voters’ chickens will first arrive home to roost? Would he, could he really do XYZ? No one seems to know, but we do know rescission is a thing: It recently happened with unspent Covid funds. Best we can do is consider the clues.
Precedent: The first Trump administration did make a broad effort to roll back Obama-administration accomplishments, including Obamacare. It largely failed, but not entirely — and this time around, the judicial and legislative branches could function more as accomplices than checks or balances.
Motivation: The “rescind” quote from the September policy speech at the New York Economic Club (at about the 19:30 mark) sets the context as undoing “green” efforts and maximizing both production and consumption of fossil fuels.
Not just the Inflation Reduction Act but also the Bipartisan Infrastructure Law fit these clues. Both are considered signature accomplishments of the previous administration and both are green-heavy.
Definition: Much depends on what precisely is meant by “rescind” and “unspent.” If funds are only allocated or awarded, are they yet “unspent”? If they’ve passed to state or local governments’ accounts, could the Trump administration still claw them back? As with so many previous executive-branch casualties, what’s law — and what will turn out to be mere norm?
Maybe the “could” doesn’t matter as much as the “would.” Even if it ultimately failed, the admin’s attempts would tie up funds during months or years of legal wrangling. Whether rescinded or just delayed, the absence could be similar for you, your staff and your constituents.
Effects: I worked at a public-involvement agency where nearly half the revenue came from state-level transportation work. Consider your margins: If half such projects stalled, dropping anticipated revenue by almost a quarter, would your agency survive? What changes would you need to make?
Saluting Captain Obvious
If you’ve got projects with federal funding near the hot seat, your course seems obvious: Do what’s in your power to move those projects along and move that funding to the next stage — from allocated or awarded to disbursed, from disbursed to well and truly spent on what it buys for your project.
And of course, tell your end-user audience, the public, what that funding bought — in plain language (covered previously), making daily-life effects and benefits clear.
But isn’t all of this a little obvious? Surely someone is doing whatever diligence is due.
Don’t take it for granted. From my agency vantage point, I saw scant evidence that anyone there or at the client orgs had their heads up enough to mind parts of the store like this one. It really could be up to you to sound an alarm. Just don’t count on getting credit.
But if, lucky you, your org or agency is on top of it: Care to share details of how you checked and/or the hatch-battening you’re doing as a result?
