How Trump’s federal funding freeze is beginning to affect Austin

On Jan. 31, a U.S. district judge granted a temporary restraining order prohibiting the Trump administration from implementing a slew of executive orders that would freeze federal funding programs that allow access to health care, housing, education and other basic services. But this week, U.S. District Court Judge McConnell ruled that Trump has violated that TRO, continuing freeze-related activities illegally. McConnell told the administration to “immediately restore withheld funds, including those appropriated by IRA and IIJA, and … resume funding of institutes and other agencies such as the National Institutes of Health.” Medicare, Social Security benefits, Supplemental Nutrition Assistance Program (SNAP) benefits and student loans are explicitly exempt from the freeze.

If the order continues, many of Austin’s biggest projects and programs will be severely affected, according to a memo released by Austin’s Intergovernmental Relations Office (IGRO) on Feb. 11. In it, the city details how $1.2 billion in federal funding has been spent through direct and discretionary grants over the last four years. Specifically, transportation and public health sectors would be the most immediately affected by Trump’s scorched-earth policy.

The Jan. 20 Unleashing American Energy Executive Order would freeze any funding from the Inflation Reduction Act or Infrastructure Investment and Jobs Act, which go toward innumerable local construction projects, like electric vehicle charging stations, for example. Just a week before that order, Rep. Lloyd Doggett secured $15 million from the IIJA to go toward expanding Austin’s EV charging capacity. 

That’s not the only project that could end if the freeze continues; the memo also mentioned that the proposed caps and stitches meant to mitigate the worst of the I-35 expansion, Safe Streets for All and the Barton Springs Bridge replacement – which together were set to be awarded $220 million over the next two years – could be impacted as well. Safe Streets for All is a discretionary program established by the IIJA, to be appropriated from 2022-26 for the prevention of roadway death and injury. As recently as September 2024, Austin was awarded $10.5 million to improve safety for pedestrians, including by building a grade-separated crossing of I-35. 

The Barton Springs Bridge replacement, which was designed using 2020 mobility bond funds, hadn’t secured construction funding until November 2024, when the U.S. Department of Transportation awarded $32 million to Austin to begin construction. And finally, the estimated $900 million airport expansion is about a third funded by federal grants for major capital improvements including a new terminal meant to ease Austin’s ever-increasing passenger traffic – funding that Carrie Rogers, intergovernmental relations officer, said “is now potentially jeopardized.” 

Other than transportation, the health care safety net may also be affected. Austin Public Health relies on approximately $39 million annually for “critical family health programs such as vaccines, Tuberculosis clinics, preventive screenings, basic needs and nutritional programs for women and children, as well as public health emergency preparedness and disease surveillance programs.” Federal funds also prop up nonprofit vendors contracted by the city and fund approximately 264 full-time staff positions to implement these programs.

UT-Austin research may also be affected. On Monday, the National Institutes of Health implemented a policy that limits the amount it reimburses grant recipients for indirect costs associated with grant research, such as facilities maintenance and administration expenses. UT’s reimbursement for those costs is now capped at 15 percent, meaning UT will lose millions of dollars from its hundreds of biomedical research projects if the rule holds, KUT reported this week. A judge has halted that rule in 22 states in response to a lawsuit, but Texas Attorney General Ken Paxton did not choose to include Texas in it. In the 2023 fiscal year, the University of Texas spent $1.06 billion on research – 61 percent of which came from federal sources. 

Though the memo mostly touched on how the freeze would affect transportation and public health, affordable housing could also be affected. Travis County regularly relies on IRA funding to complete its development projects, and the city just celebrated a nearly $7 million HUD grant in January, planned to finance affordable developments in South Congress area, adjacent to Capital Metro’s Crestview Station, and an update to the Strategic Housing Blueprint, which identifies priorities for affordable housing investments. 

As far as next steps, Rogers writes in the memo that city departments should continue business as usual until told explicitly otherwise. Some departments have received notifications from federal agencies that their active grants are under temporary restraining orders, but “unless a department receives a direct notification from its federal funding agency to cease work and/or reimbursements, departments should continue to draw down reimbursements, maintain grant-required activities, and work towards finalizing grant agreements where applicable.”

Photo by Baseball Watcher, CC BY-SA 3.0, via Wikimedia Commons.

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