Some very welcome news via the proposed budget released today by President Barack Obama: the budget includes $130 million to help fund two of Metro’s big rail projects: the Purple Line Extension and the Regional Connector. The budget allocates $65 million to both projects.

This is the first time that both projects will actually receive federal money. The funds are extremely significant because they help supplement Measure R funds for two projects that are both very expensive and need additional funds. Although Congress still must approve the budget, historically these type of funds don’t change much during budget negotiations.

There’s another reason the money is important. The funds are the first payment for more federal dollars that will flow to both projects in future federal budgets via the federal New Starts program that helps local transit agencies pay for big, pricey transit improvements — such as new rail lines.

Formal agreements that detail the New Starts money are expected to be signed between Metro and the Federal Transit Administration later this year. The subway will be asking for $2.3 billion in New Starts money and has a budget of $2.4 billion for its first phase to La Cienega Boulevard. The Regional Connector will be asking for $671 million in New Starts money and has a budget of $1.3 billion.

Utility relocations are already underway for both projects and an exploratory shaft is being dug near Fairfax Avenue for the subway. Metro is trying to have construction underway on both projects within the next year with tunneling slated to begin in 2015. Under Metro’s current schedules, the Connector is expected to open in early 2020 and the Purple Line Extension to La Cienega Boulevard in late 2022.

The Regional Connector is a 1.9-mile underground light rail project in downtown Los Angeles that will tie together the Gold Line, Blue Line and Expo Line that will allow one-seat rides for most passengers through downtown Los Angeles. The Purple Line Extension will ultimately extend the existing Purple Line subway from its current terminus at Wilshire and Western for 9.5 miles to Westwood, mostly under Wilshire Boulevard and with a swing south to serve Century City.

The budget also contains some other welcome news for Metro: it contains a bond program that is part of Metro’s America Fast Forward proposal to help accelerate transit projects. But the President’s budget calls for the federal government to subsidize 28 percent of interest on bonds whereas Metro is seeking a 100 percent subsidy.

Here is the legislative update sent today to the Metro Board of Directors by Metro’s government relations staff about the release of President Obama’s budget:

This afternoon, the White House released President Obama’s Fiscal Year 2014 Budget. The budget request for the U.S. Department of Transportation (USDOT) is $77 billion, which is 6% more than the Fiscal Year 2012 enacted levels. Within the budget for the USDOT is $130 million in Section 5309 Capital Investment funds for our agency’s two New Starts projects, the Purple Line and the Regional Connector. The funding recommendation for our New Starts projects can be found on Page 31 of this USDOT budget document – http://goo.gl/nhDyF. The budget released today also included an America Fast Forward Bond proposal, that while different in substance from our agency’s proposal, does seek to provide an additional financial tool to transportation agencies seeking to build major capital projects. Specifically, the White House proposal for America Fast Forward bonds includes an interest rate subsidy of 28%, while our agency’s Board approved America Fast Forward bond proposal includes a 100% interest rate subsidy paid for by the Federal Government. With respect to highway funding, the budget includes $41 billion for the Federal Highway Administration, which is consistent with the funding levels set last year by MAP-21. With respect to transit funding, the budget includes $10.9 billion for the Federal Transit Administration, which is over $300 million more than the Fiscal Year 2012 enacted level. In addition to the President’s commitment to fully fund MAP-21, the budget includes an ambitious $50 billion proposal to spur economic investment. This initiative, outlined on Page 4 of this USDOT budget document, includes $25 billion for roads and bridges, $6 billion to restore our nation’s transit systems to a state of good repairs and $4 billion for the TIGER grant program, among other initiatives. With the formal release of the President’s budget today, our staff will be carefully reviewing the document to fully understand its possible impact on our agency.

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