As with any new Administration, the start of the Trump Administration has brought about changes in federal funding priorities through changes in language and merit criteria in discretionary grant programs. In particular, Secretary Duffy’s U.S. Department of Transportation, aligned with Executive Orders from President Trump, has signaled a shift away from climate and equity provisions and towards a focus on families, economic impact, and efficient project delivery. (The unusual thing about the current Administration is not a new set of grant priorities, but a willingness to reach back and judge some of the prior Administration’s grant selectees on the new criteria.)

While applicants for federal discretionary grants can adapt language in their applications and formula funds have been released for FY25, the new Administration has also brought uncertainty for some competitive grant awardees and applicants. USDOT is currently a third of the way through its review of previously awarded but unobligated funds from the Biden Administration, leaving two-thirds of previously awarded projects awaiting approval for obligation. Pauses in the obligation of funds for review of programs and threats to potentially freeze funds for certain applicants have resulted in legal action against the Administration by some states and cities. This article provides an overview of actions taken by the Administration impacting discretionary funding, examples of changes to new notice of funding opportunities, and how cities and states have responded to these changes.  

Timeline of actions taken by the agency from the start of the administration till now   

January  

At the start of the Administration, Secretary Duffy published a memo, “Implementation of Executive Orders Addressing Energy, Climate Change, Diversity, and Gender,” outlining how USDOT planned to implement early Executive Orders (EOs) impacting the agency including, Initial Rescissions of Harmful Executive Orders and Actions (EO 14148), Ending Racial and Wasteful Government DEI Programs and Preferencing (EO 14151), Unleashing American Energy (EO 14154), and Defending Women from Gender Ideology Extremism and Restoring Biological Truth to the Federal Government (EO 14168). The memo revoked DOT Orders on the Department of Transportation Equity Council, the Climate Change Adaption and Resilience Policy for DOT Operational Assets, and the USDOT Actions to Address Environmental Justice in Minority Populations and Low-Income Populations. The memo also called for a cut to funding for any programs or rules related to “climate change, environmental justice, greenhouse gas emissions, racial equity, gender identity, the Justice 40 initiative, and DEI.”  

Secretary Duffy also issued the memo, “Ensuring Reliance Upon Sound Economic Analysis in Department of Transportation Policies, Programs, and Activities,” setting out new administrative priorities in the competitive grant process, including encouraging projects with  user-payer models and projects maximizing economic opportunity and quality of life for families. The memo also outlined prioritization of projects in local economic opportunity zones and in communities with higher marriage and birth rates. USDOT is also prioritizing projects from applicants who comply with immigration enforcement, do not have vaccine or mask mandates, and avoid local political objectives unaligned with federal interests. The “Ensuring Reliance Upon Sound Economic Analysis in Department of Transportation Policies, Programs, and Activities,” memo also outlines that applicants must utilize rigorous economic analysis and cost benefit analysis. On the other hand, the memo emphasizes a shift away from social cost of carbon calculations and other calculations focused on equity and climate.  

February  

In February, FHWA sent states a letter saying previously approved plans for deployment of National Electric Vehicle Infrastructure (NEVI) projects needed re-approval. The letter stated that no new obligations would occur until new program guidance is released and new plans are submitted and approved.  

In February, the agency removed FHWA’s approval for NYC’s congestion pricing program and announced a review of California’s high speed rail development to assess the potential removal of $4 billion in obligated federal dollars for the project.  

A DOT directive ordered all new State and Metropolitan Improvement Plan amendments to be reviewed by USDOT headquarters in addition to existing review by FHWA division and FTA regional offices. However, this additional review stage was removed within a couple of weeks.  

March  

In March, Secretary Duffy sent an memo to all USDOT offices calling for review and potential rescission of awarded but not yet obligated projects from the previous Administration to ensure alignment with the Administration’s priorities and executive orders. The email specifically called out projects focused on bicycle infrastructure, green infrastructure, and electric vehicle charging.  

Secretary Duffy rescinded Biden-era memos focused on social and environmental justice which he described said pushed state agencies to incorporate social and environmental agendas into infrastructure project decisions.  

Secretary Duffy sent letters to New York’s Metropolitan Transit Authority (MTA) and the Washington Metropolitan Area Transit Authority (WMATA) urging them to reduce crime and fare evasion or risk reductions in federal funding.  

April 

On April 24th, Secretary Duffy released a letter alerting “All Recipients of U.S. Department of Transportation Funding,” that USDOT funds are contingent upon recipients’ compliance with federal law, in particular with federal immigration enforcement. The letter also said projects and contractors must utilize “merit-based” hiring practices, must utilize only legally permitted workers, and said funds cannot be distributed based upon DEI categorizations. The letter also warned that USDOT may complete audits and potentially take back funding if unauthorized activities are discovered.  A federal court in Rhode Island issued a nationwide injunction against enforcement of Duffy’s memo on June 19, but today’s Supreme Court ruling banning nationwide injunctions may affect the Rhode Island injunction soon.

May  

My early May, 329 of the unobligated grants were approved. On May 15th, USDOT announced the approval of an additional 76 infrastructure grants, bringing the total number of approval of paused funds to nearly $5 billion. This is 13% of the announced but not advanced projects from the previous Administration. In late May, USDOT also allocated over $1.5 billion from the Federal Highway Administration’s Emergency Relief program for infrastructure repairs across states and territories impacted by natural disasters.  

June  

On June 10, USDOT announced the clearance of 529 additional infrastructure grants previously approved by the Biden-Administration, totaling over $2.9 billion. This brought the new Administration to a total of clearing 1,065 of the 3,200 projects in the unobligated backlog. Obligated projects covered a variety of programs including but not limited to the Airport Improvement Supplemental, the Bridge Investment Program, the National Scenic Byways Program, Consolidated Infrastructure and Safety Improvements, Federal-State Partnership, Ferry Service for Rural Communities, and the Infrastructure for Rebuilding America Grant. 

New Notices of Funding Opportunities (NOFOs) 

Under the new Administration, the Notices of Funding Opportunities have started to be released for FY 2025 including for Safe Streets for All (SS4A), BUILD (formerly RAISE), FTA Low or No Emission Grant Program and the Grants for Buses and Bus Facilities Competitive Program, the Bridge Investment Program, the Competitive Highway Bridge Program, Strengthening Mobility and Revolutionizing Transportation (SMART), Regional Infrastructure Accelerators Program (RIA), High Priority-Commercial Motor Vehicle (HP-CMV), and the Buses and Bus Facility Competitive Grant Program.  

SS4A (Safe Streets and Roads for All)  

In March, the NOFO for the FY25 round of Safe Streets and Roads for All was released. USDOT updated its frequently asked questions to include those related to changes in award considerations. The FAQs also reassured previous grantees that they did not need to reapply and “The USDOT is working diligently to execute previous year grant agreements.” The FAQs also clarified that applicants that while new award considerations will be utilized to prioritize highly rated applications, applicants will not be disadvantaged for Action Plans containing elements that are no longer required.  

RAISE/BUILD 

In January, the Trump Administration renamed Rebuilding American Infrastructure with Sustainability and Equity (RAISE) to Better Utilizing Investments to Leverage Development (BUILD) and reduced available funding for the first FY25 round from $1.5 billion to $150 million. Applicants were given the opportunity to revise their materials ahead of the January 30, 2025 deadline to align with changes made to the program including requirements for grants and contracts to be in compliance with the new Executive Orders. The NOFO specifically highlights alignment with terms in compliance with Section 3(C)(iv) of EO Ending Illegal Discrimination and Restoring Merit-Based Opportunity and defining Historically Disadvantaged Communities as Areas of Persistent Poverty. Applicants were given till January 30th to update their applications.  

FY25 Bus and Low-No Bus Funding  

In May, USDOT announced $1.5 billion in available funds for the FY25 Buses and Bus Facilities and Low or No Emission bus competitive grant programs. The updated NOFO removed language related to sustainability, environmental justice, and equity and requires applicants to explain how their projects will contribute to more accessible jobs, healthcare, and retail, particularly for families with young children. However, the maximum federal share for the grants still increases based upon compliance with the Clean Air Act and for accessibility measures for those with disabilities. For the Low Emission/No Emission Bus Grant Program, there will be a greater prioritization of low-emission projects over zero-emissions projects.  

FHWA’s Bridge Investment Program and Competitive Highway Bridge Program  

In late May, USDOT announced the funding opportunity for the FHWA’s Bridge Investment Program and Competitive Highway Bridge Program to deliver upgrades to approximately 42,000 bridges. In the funding announcement, Secretary Duffy said the removal of requirements around DEI and climate will help to expedite the project delivery process. Applicants were provided with redlined versions of the NOFOs with the changes from previous funding rounds for both programs.  

State and City Responses  

As typical for administration changes, states and cities must adapt to changing language and prioritizations in discretionary grant programs. For example, the Transportation Policy Board for the Thurston Regional Planning Council voted to change their transportation plan to better align with new administrative priorities. A board member stated, “It really is crazy times right now, but being in compliance, I think, is what is best for our constituents, because these are important projects that are needed in our community.” 

In addition to the removal of climate and equity-based priorities in applications, states have also had to adapt to meeting new priorities such as a focus on increasing transportation access for families. While the removal of language around diversity and sustainability language was not a surprise, the novel preferences around high marriage and birth rates brought confusion for some states. States have also needed to prioritize economic analysis in applications and shifted to using the statutory definition of Areas of Persistent Poverty instead of the U.S. Census Bureau Small Area Income Poverty Estimates (SAIPE) used under the Biden-Administration.  

In response to the amended BUILD NOFO, The City of Milwaukee was able to work over a weekend to update their application to meet the new priorities, but representatives raised concerns about the competitiveness of the more limited funding pool. 

States and cities waiting for approval of unobligated funds have been placed in a holding pattern such as Knoxville’s pedestrian bridge. Some states and cities have expressed concern over delays and uncertainty in receiving previously announced funds. At a National League of Cities meeting in March, Athens, Ohio Mayor Steven Patterson said, “We were under contract. Now we have to explain to people that we’re in a holding pattern until this [funding] frees up and we are able to deploy something that is vitally needed to anyone who has an EV.” In the City of Portland’s webpage on federal policy impacts stated, “The City will continue to monitor decisions at the federal level and respond to the changing grants landscape. While any long-term impacts remain unclear, potential outcomes could be delays in reimbursements and project work, modifications in grant terms, or attempts at contract cancellations.” 

On the other hand, In Utah, a trio of multimillion dollar grants were under review in April, but UDOT officials were not concerned about project delays or changes. UDOT spokesperson John Cleason said, “It’s common for any administration to review and evaluate how those federal funds are being spent.” 

Some states and cities have begun to explore ways initiatives being deprioritized can continue without federal funding. A group of states including California, Illinois, Maryland, Michigan, Minnesota, New York, and Pennsylvania joined together to promote transit, bicycle, and recreational infrastructure in the face of potential federal funding cuts under the Clean Rides Network. King County Metro in Seattle is still working towards its goal of a 2035 transition to fully electric buses but is completing analysis on how administrative changes will “support or hinder that transition.”   

Some cities and states have responded to the pauses in funding through coordinated political or legal action. The American Association of State Highway and Transportation Official’s sent a letter in early March along with certain state DOTs asking for reimbursement requests to be paid right away to avoid cash flow challenges for state DOTs.  

A group of cities including Nashville, Columbus, and San Diego and nonprofits sued the Administration over the March memo pausing projects with a focus on climate and equity as a violation of the Impoundment Control Act.  

In May a coalition of 20 Democratic attorney generals filed two federal lawsuits in response to Secretary Duffy and Secretary of Homeland Security Kristi Noem’s threats to withhold federal funds with states that do not comply with federal immigration enforcement. On June 19, a federal judge issued a nationwide injunction preventing USDOT from utilizing cooperation with federal immigration law as a condition of federal grants.  

Sixteen states along with the District of Columbia and a number of environmental organizations sued the Trump Administration over the freezing the funds in the National Electric Vehicle Infrastructure (NEVI) Infrastructure Formula Program. U.S. District Judge Tana Lin issued a preliminary injunction, likely to be appealed, restoring $5 billion in funding to 14 states.  

New York City successfully sued the removal of approval for its Congestion Pricing Program, allowing for the continuation of the program. U.S. District Judge Lewis Liman ruled that USDOT could not immediately stop congestion pricing and that it could not withhold funding due to its dislike of congestion pricing program.  

Connecticut and Texas have developed partnerships with USDOT in alignment with the Administration’s goal to expedite project delivery. The Connecticut Department of Transportation and Connecticut State Historic Preservation Office entered an agreement with the Federal Highway Administration and Federal Transit Administration, giving the state authority to accelerate review of transportation projects impacting historic properties under Section 106 of the National Preservation Act. Connecticut Department of Transportation Commissioner Garrett Eucalitto said, “By streamlining environmental reviews and cutting government red tape, we can more efficiently advance projects and ultimately reduce costs.” 

The Texas Department of Transportation and the Federal Highway Administration announced an agreement in June enabling Texas to take greater ownership of environmental permitting requirements for bridge and highway projects. The agreement also included the removal of several reporting requirements, references to rescinded Council on Environmental Quality regulations, removing FHWA as a party to programmatic agreements, and removing Biden Era project delivery requirements.   

Conclusion  

In addition to potential changes in project focus, changing merit criteria may result in a shifted demographics of grant recipients. It also remains to be seen if more states will pursue agreements with USDOT like Connecticut and Texas focused on expediting project delivery. Given the Trump Administration’s focus on this, it will also be interesting to see the rates of project delivery for new grantees. During testimony before Congress in April, Secretary Duffy expressed an interest in consolidating systems for tracking different grant programs to expedite review processes. It is an open question as to how reorganization, along with USDOT staffing reductions, will impact the grant review and execution processes. The timeline at which the reminder of the backlog also remains to be seen.