Will Austin still get $105M federal grant for I-35 ‘cap'? New budget proposal paints grim picture
AUSTIN (KXAN) — The city of Austin is still waiting to see if it will have $105 million to build a key 'cap' over the Texas Department of Transportation's I-35 expansion project, but an announcement Tuesday from Transportation and Infrastructure Committee Chairman Sam Graves, R-Missouri, makes that likelihood seem smaller.
According to a news release from Graves, the committee's soon to be discussed budget reconciliation proposal 'rescinds unobligated funds and eliminates seven unnecessary Green New Deal style programs created in the Inflation Reduction Act.'
'This includes Neighborhood Access and Equity Grants…progressive priorities that are either duplicative, are projects that states and other entities may pursue if they prioritize them, or are efforts that should be driven by the industry and not mandated by the federal government,' a news release said.
It's a $105 million Neighborhood Access and Equity (NAE) grant previously awarded to Austin that would have funded the cap from Cesar Chavez to 4th Street. That grant was already in limbo but now appears very much on the chopping block.
Austin's vote on I-35 cap and stitch funding delayed again amid federal funding uncertainty
The Transportation and Infrastructure Committee is expected to discuss the budget reconciliation proposal Wednesday morning.
'With this proposal, the Committee is doing its part to ensure that Republicans fulfill our promise to the American people and the promise of the President's America First agenda,' Graves said in a release.
Austin Mayor Kirk Watson said the following on the Austin City Council message board:
'We received word today that the House Transportation & Infrastructure Committee Chair Sam Graves (R-MO) released his piece of the massive budget reconciliation package that the House leadership hopes to pass before Memorial Day. The House T&I Committee has instructions to produce its portion a piece of the reconciliation package that provides a new reduction of the federal budget deficit of $10 billion over 10 years.
The bill would rescind all unobligated balances from the Neighborhood Access & Equity Grant Program, including the $105 million that USDOT awarded to Cesar Chavez to 4th Street portion of I-35 Cap & Stitch.
It is expected that the T&I Committee will approve the bill by a party line vote when they take it up tomorrow morning. After that, the T&I bill will be combined with bills from other House committees and be voted on by the full House sometime in May, if the leadership's schedule holds.
The overall budget reconciliation bill could face some hurdles on the House floor, especially if, as expected, it outlines reduced spending on Medicaid and nutrition programs. It will also face challenges in the Senate. So, there is still some chance that the grant could make it. However, we should expect that a budget reconciliation bill will reach the President's desk and that it will include rescission of many unobligated balances form Inflation Reduction Act programs.'
Caps and stitches would look like deck plazas and community spaces over the wider I-35 near downtown to better connect east and west Austin. In a November 2024 council work session, city staff said they believe building out the full cap and stitch vision plan would cost over $1 billion.
The deadline for Austin to commit funding to TxDOT for the roadway elements is the end of May, according to a memo from city staff last month.
'It's just another one of these great unknowns. Cap and stitch is a very expensive project by itself. This $100 million grant helps to alleviate some of those costs,' Austin City Council Member Ryan Alter has previously said. 'We have to make a decision in May and we don't even know if this $100 million from the federal government is going to be available. It's making life very difficult, very unpredictable.'
Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
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