There are a number of different ways to obtain funding for active-transportation projects. Federal transportation programs provide the largest percentage of funding needed for the country’s bicycle and pedestrian infrastructure. State and local governments typically match federal funds and, increasingly, initiate their own programs. Private sources are also becoming more common.
Most federal funding for trails, walking and bicycling comes through the surface transportation spending bill, currently known as the Fixing America’s Surface Transportation Act, or the FAST Act.
Formula Grant Funding
Some transportation funding comes from the federal government based on formulas, which allocate funds to state governments, urban and non-urban areas based on population, vehicle miles traveled, air quality conformity and other variables. Governing entities, such as state departments of transportation (DOT), metropolitan planning organizations (MPO), rural planning organizations, or municipal or county governments then allocate the funding for transportation projects that meet certain federal criteria.
Select examples that provide funding for bicycle and pedestrian projects include the following:
- Transportation Alternatives (TA). This is the main program that funds trails and other bicycle and pedestrian projects across the country. This competitive reimbursement program includes most activities eligible under the historically funded Transportation Enhancements program, the Safe Routes to School (SRTS) program, which funds programs and projects that encourage children and their families to walk and bike safely to school, and the Recreational Trails Program, which provides funds to develop and maintain recreational trails and related facilities.
- Congestion Mitigation and Air Quality Improvement (CMAQ). This program provides funds to state DOTs, MPOs and other sponsors to fund projects that will contribute to air quality improvements in ozone, carbon monoxide and/or particulate matter, and provide congestion relief.
- Surface Transportation Block Grant Program (STBG). This program provides flexible funds to states for projects to improve federal-aid highways (most roads), bridges and tunnels, walking and biking infrastructure, and transit capital projects.
Discretionary Grant Programs
Discretionary grant programs are allocated on a competitive basis by the federal government. The federal government has used these programs to encourage greater coordination among different transportation modes and federal, state and local agencies. One examples of these grants is the TIGER Program, now called BUILD:
- Department of Transportation – TIGER. The Transportation Investment Generating Economic Recovery program is a competitive grant program with funds allocated directly by the U.S. Department of Transportation (USDOT) for innovative projects that deliver on five long-term outcomes: safety, economic competitiveness, state of good repair, livability and environmental sustainability. Since 2009, the TIGER program has funded 30 projects focused on bicycle and pedestrian infrastructure, totaling over $350 million, and has supported bicycle and pedestrian aspects within numerous other projects. In 2018, USDOT renamed the program to Better Utilizing Investments to Leverage Development (BUILD), altering some of the application criteria to favor applicants with significant non-federal investment.
Innovative Financing Strategies
The federal Transportation Infrastructure Financing and Innovation Act, or TIFIA, provides different types of loans and credit to support larger transportation projects, defined as projects with a cost of at least $50 million in urban areas, $25 million for rural infrastructure projects, $15 million for intelligent transportation system (ITS) projects, or any project that costs more than one-third of the most recently completed fiscal year’s formula transportation apportionments for the state in which the project is located. Funding can be issued through direct, secured federal loans, loan guarantees to institutional investors or lines of credit that may be used to supplement project revenues for the first 10 years of project operations. TIFIA supports public-private partnerships and covers construction costs that can later be paid back through the collection of tolls, or other revenue.
The traditional size threshold requirement for TIFIA made it difficult to fund bike and pedestrian projects, which typically cost much less. However, the FAST ACT lowered this threshold to $10 million, provided that a local government is involved in the development of the project. The FAST Act also allowed for the bundling of multiple segments to meet this threshold and created an application fee waiver for smaller projects.
RTC advocates for innovative financing methods that would leverage private funds for bike and pedestrian networks, like TIFIA, but which are customized to the needs of small-scale projects. Specifically, such a program would have a lower application fee, a smaller budget minimum for projects and a more flexible rule for the percentage of the loan that would be financed. Working with private entities to finance trail and other bicycle/pedestrian projects would allow private dollars to contribute to funding of public resources, limiting the need for government to come up with up-front funding, while helping communities to grow and thrive.