The Bush administration’s 2009 federal budget released earlier this week includes significant new funding for New York City region transit. $211 million is slated for the East Side Access project and $277 million for the Second Avenue Subway. The administration also budgets $54.1 million for the Hudson-Bergen Light Rail and $14.7 million for further study on the ARC trans-Hudson tunnel project, which recently earned a “medium to high” priority rating from the Federal Transit Administration.

In the broader scheme, however, the Bush budget is bad news for transit. It proposes to shore up the Highway Account of the federal Highway Trust Fund (HTF) by “borrowing” $3.2 billion from the HTF’s Mass Transit Account. It would also cut national transit spending by more than $200 million from previously proposed levels.

The Highway Account will fall into the red in 2009, with obligations expected to exceed gas tax receipts and other revenue. Policymakers have long-known about this impending crisis, and even established a commission to study federal transportation revenue with the passage of SAFETEA-LU in 2005 (see MTR‘s summary of the commission’s findings). Besides calling for an increase in the national gas tax, the commission recommended several immediate tweaks (such as dedicating transportation taxes to the HTF rather than to the General Fund) that could bring the Highway Account back into solvency. None of its recommendations included a shift in funds from the Mass Transit Account to the Highway Account.

Policy analysts believe that the Bush budget will be largely dismissed by the Democrat-controlled Congress. However, given the urgency to maintain highway spending levels, particularly in light of the Minnesota bridge collapse, many lawmakers may be tempted to support this provision. The Bush proposal “authorizes borrowing between the Highway Account and the Mass Transit Account within the Highway Trust Fund in fiscal year 2009 in the form of non-interest bearing repayable advances.”

If the Bush proposal goes through, it will establish a dangerous precedent of raiding transit funds to build highways. More immediately, it will cut the balance in the Mass Transit Account to the point where, without new funding, the 2010 federal transit program could not be funded at current levels, let alone see an increase. Governor Spitzer strongly criticized the provision in a statement on the budget: “Recognizing that New Yorkers use mass transit more often than any other state, this federal action could negatively counteract our proposed record-setting state aid for the Metropolitan Transportation Authority (MTA).”

The Bush administration also continues to call for the dismantling of Amtrak. The administration proposes a “shutdown” budget of just $800 million for Amtrak, a 40 percent cut from current funding levels. The Campaign doesn’t expect this proposal to go anywhere (even the Republican-controlled Congress consistently gave Amtrak significantly more than Bush recommended), but it’s worth keeping an eye on given the implications for NJ Transit, Shore Line East, and other regional rail services which use Amtrak’s Northeast Corridor tracks.