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Sequester Would Cut New Starts By $100M, Could Trigger FTA Furloughs

The consequences of the near-certain sequester for aviation have been well publicized by Transportation Secretary Ray LaHood's recent media blitz, but less well-known are the effects for surface transportation.

The Second Avenue Subway is one New Starts project that could get complicated with the sequestration cuts. Image: ##http://www.mta.info/capconstr/sas/##MTA##

LaHood broke that silence in a memo to department staff earlier this week and released yesterday by Politico, warning that even after taking measures like "instituting hiring freezes, cutting contracts, and taking other administrative reductions," furloughs may be necessary in the Federal Transit Administration and the Surface Transportation Board.

FTA Administrator Peter Rogoff said last month that he’ll move “heaven and earth” to keep people working in the event of a sequester, but he may not be able to avoid furloughs. The entire FTA staffing budget is subject to the 6 percent sequester cut. (See my story from Monday detailing how the sequester works and what transportation programs will and won't be affected.)

It could also impede transit construction projects. The Tri-State Transportation Campaign has made a list of crucial projects that could get caught in the sequester's web, from TIGER-funded intermodal facilities in New York, New Jersey, and Connecticut to the New Starts-supported Second Avenue Subway in Manhattan.

"Right now, I can tell you that the sequester would require a 5 percent cut to the New Starts/Small Starts program, which would reduce funding for critical transit projects by approximately $100 million this year, creating unplanned borrowing and financing costs for states and local government," said FTA spokesperson Brian Farber yesterday. "The cuts would also require FTA to revise its payment schedule for New Starts/Small Starts projects, slowing the payments the federal government previously committed to making."

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