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Should Mass Transit Get $2 Billion In Emergency Operating Aid?

Tuesday, June 1, 2010

Public transportation systems across the country are under tremendous pressure as the recession has reduced the state and local revenue streams that help fund their operating expenses to nearly a trickle. According to the American Public Transportation Association, 84 percent of transit systems have cut service or raised fares, or might do so. More than half have cut jobs and a third have laid off employees, APTA says.

In response, eight Democratic senators from the Northeast and Midwest have introduced legislation to provide transit systems with $2 billion in emergency aid to cover their operating budgets. By law, mass transportation can only use its share of revenues from the Highway Trust Fund, which provides most federal funding for transit programs, to pay for capital expenses.

Some public transportation advocates want Congress to go a step further and allow transit agencies to use their federal dollars to meet their day-to-day operating costs as well. Others fear that doing so would reduce needed capital investment and could reduce state and local government contributions to transit budgets as a result.

With the federal budget deep in the red, anger over Washington overspending on the rise, and other programs that serve public needs (like education) also clamoring for emergency aid, should the government spend $2 billion on emergency operating assistance for mass transit? When Congress takes up reauthorization of surface transportation programs next year, should it change the law so transit agencies can tap their federal funds to make up for shortfalls in their operating budgets so they don't need emergency aid in the future?

9 Responses

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June 4, 2010 8:55 AM


6
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Clean Energy Would Benefit, Too

By Rob McCulloch

Senior Policy and Legislative Advocate, BlueGreen Alliance

“Green jobs did not start with a windmill, which is significant, or with solar, which is significant. It starts with transit drivers - 54 on the bus, rather than 54 cars on the road.” – Rev. Jesse Jackson

Keeping transit solvent now ensures a pillar of our transportation network does not crumble and safeguards future investments. The operations funding in Senator Dodd’s legislation would be more than a lifeline – it’s a down payment for more efficient transportation as America moves to a clean energy future.

By reducing congestion, pollution and our dependence on oil, transit jobs meet the standard of green jobs as defined by government and private sector economists. Preserving and expanding transit will make our transportation system more efficient and help advance America’s transition to a clean energy economy.

In the here and now, public transportation saves jobs, as well as creates them, by getting more people to work reliably and affordably. Each weekday, an estimated 14 million Ameri...

“Green jobs did not start with a windmill, which is significant, or with solar, which is significant. It starts with transit drivers - 54 on the bus, rather than 54 cars on the road.” – Rev. Jesse Jackson

Keeping transit solvent now ensures a pillar of our transportation network does not crumble and safeguards future investments. The operations funding in Senator Dodd’s legislation would be more than a lifeline – it’s a down payment for more efficient transportation as America moves to a clean energy future.

By reducing congestion, pollution and our dependence on oil, transit jobs meet the standard of green jobs as defined by government and private sector economists. Preserving and expanding transit will make our transportation system more efficient and help advance America’s transition to a clean energy economy.

In the here and now, public transportation saves jobs, as well as creates them, by getting more people to work reliably and affordably. Each weekday, an estimated 14 million Americans ride public transportation. Transit helps families save money by decreasing their household transportation costs, allowing them to pay their mortgage and buy goods and services in the U.S. economy rather than sending their money overseas for imported oil.

We owe it to the more than 380,000 workers that operate and maintain our buses and trains - and the millions of workers and families that rely on them – to secure their jobs and ensure they can perform them effectively as we emerge from the most severe recession in 70 years.

June 3, 2010 6:08 PM


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Pass Temporary Assistance Legislation

By William Millar

President, American Public Transportation Association

The economic recession has reduced local and state revenue that funds public transportation operations. Through no fault of their own, public transit systems are facing great financial challenges. In my 38 years of experience in the public transportation industry, I have never seen a financial crisis as widespread as what we are going through. The fact of the matter is that public transit systems need help and they need it now.

As our recent survey showed, 84 percent of public transit systems have raised fares, cut service or are considering either of those actions. Fifty nine percent of public transit systems reported that they have already cut service or raised fares. Seven out of ten public transit systems have projected budget shortfalls in their next year even after having taken the actions reported in the our survey.

This impacts millions of Americans who rely on public transportation every day to go about their lives. Each weekday, people board public transportation systems 35 million times. Without this legi...

The economic recession has reduced local and state revenue that funds public transportation operations. Through no fault of their own, public transit systems are facing great financial challenges. In my 38 years of experience in the public transportation industry, I have never seen a financial crisis as widespread as what we are going through. The fact of the matter is that public transit systems need help and they need it now.

As our recent survey showed, 84 percent of public transit systems have raised fares, cut service or are considering either of those actions. Fifty nine percent of public transit systems reported that they have already cut service or raised fares. Seven out of ten public transit systems have projected budget shortfalls in their next year even after having taken the actions reported in the our survey.

This impacts millions of Americans who rely on public transportation every day to go about their lives. Each weekday, people board public transportation systems 35 million times. Without this legislation, there will be fewer buses on the street for people to go to work or look for work. Household will have to spend a greater portion of their budgets on transportation costs and less on food and other necessities. Transit workers will be unable to support their families due to layoffs. Now more than ever it is critical that agencies receive these new dollars to help alleviate the financial challenges they face.

Additionally, public transportation is a key economic engine that is vital for recovery – every $1 billion in investment creates 36,000 high quality “green” jobs. This short term assistance addresses the longer term issues of transportation mobility options, energy independence and overall quality of life for all Americans.

APTA and its more than 1,500 members strongly urge Congress to quickly pass this temporary assistance legislation. It is the correct way to proceed.

June 3, 2010 3:41 PM


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Now Is the Time To Act

By Mortimer L. Downey

Senior Advisor, Parsons Brinckerhoff

Thanks again to Lisa Caruso for going out on a high note with a timely topic.

I agree with those who support the intent of the Dodd-Schumer bill for relief to transit agencies facing a serious problem not of their own making. APTA surveys show the breadth of the problem, and the discussions we have had at Washington Metro, working with Rich Sarles to find solutions, brings home its depth.

THis shold not be a debate about the policies with respect to transit operating assistance from the Federal government. That discussion has gone on since the days of "section 5" assistance from what was then UMTA. That aid helped the industry over the hurdles as it moved from private bus operators towards public agencies, assuring a continuity of service. The debate ended in the late 80s with a compromise that Federal funds to small and medium sized areas could have more flexiblity, reflecting the fact that transit is less established in those places. For the larger areas, the federal focus is on capital assistance. Of course, even there the option exists to divert ...

Thanks again to Lisa Caruso for going out on a high note with a timely topic.

I agree with those who support the intent of the Dodd-Schumer bill for relief to transit agencies facing a serious problem not of their own making. APTA surveys show the breadth of the problem, and the discussions we have had at Washington Metro, working with Rich Sarles to find solutions, brings home its depth.

THis shold not be a debate about the policies with respect to transit operating assistance from the Federal government. That discussion has gone on since the days of "section 5" assistance from what was then UMTA. That aid helped the industry over the hurdles as it moved from private bus operators towards public agencies, assuring a continuity of service. The debate ended in the late 80s with a compromise that Federal funds to small and medium sized areas could have more flexiblity, reflecting the fact that transit is less established in those places. For the larger areas, the federal focus is on capital assistance. Of course, even there the option exists to divert some capital to "preventive maintenance," although it's my view that option is attractive short term but a long term trap that slides you away from a state of good repair.

THe virtue of this compromise was that it reshaped the argument about transit, positioning federal dollars much more as an investment than an expense. It was hard to argue that in a transit-intensive city, the Federal government should be a funding partner when it did not (and basically should not) control decisions that drive the funding needs, i.e. the levels of service, fares, wages and local support. Leaving those decisions local and grounding the federal role on investment to meet national objectives have served us well. If there is a broader federal role in operating costs, it might well be focused, as Rich Sarles suggests, in the area of paratransit, where a mix of federal mandate, burden-shifting from health and welfare programs and growing demand from the elderly and disabled community has put local transit budgets at risk.

I would hold to this position for the long term, but what we know have is a short term emergency. Our nation's economy is in the ditch. State and local governments or transit agencies didn't put the economy there, but natural responses to the fiscal emergency can contribute to making the national picture worse. The signs of economic recovery are beginning to appear thanks in part to the Recovery Act, but we know that state and local governments will lag a year or two in their participation. Meantime, if they have to continue the downward spiral of reduced services, higher fares and employee layoffs, the results run counter to our objectives. Direct jobs are lost, and those who depend on transit service to get to work are deterred. What we need to do is hold the line and keep the levels we have, getting them back on sound footing as the economy recovers.

This used to be done, in part, through counter-cyclical revenue sharing--getting funds out to local governments when their needs exceeded those at the federal level. But that was in an era when the federal government had revenue to share. At this point, the best we can do is look for targetted and temporary assistance that supports national objectives. This bill is a good one to consider.

June 2, 2010 1:12 PM


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Considering all the highway bailouts...

By Phineas Baxandall

Senior Analyst, United States Public Interest Research Group (U.S. PIRG)

Consider the billions spent bailing out automobile travel since the economic downturn. There’s the projected $25 billion that taxpayers will lose in the auto bailout, and then $35 billion in three Highway Trust Fund bailouts since late 2008. Despite lower gas prices, severe service cuts, and fare hikes, record-high demand to ride public transportation has held strong, – unlike driving miles, which have tailed off since 2004. Consider finally that public opinion calls for roughly a doubling of the share of transportation funds going to public transportatio...

Consider the billions spent bailing out automobile travel since the economic downturn. There’s the projected $25 billion that taxpayers will lose in the auto bailout, and then $35 billion in three Highway Trust Fund bailouts since late 2008. Despite lower gas prices, severe service cuts, and fare hikes, record-high demand to ride public transportation has held strong, – unlike driving miles, which have tailed off since 2004. Consider finally that public opinion calls for roughly a doubling of the share of transportation funds going to public transportation.

It isn’t a crazy idea. Two summers ago when prices at the pump tipped over $4 a gallon, the House approved $1.7 billion for transit operations in The Saving Energy Through Public Transportation Act with all Democrats and nearly 100 Republicans supporting. Nothing has fundamentally changed since then.

What is Congress waiting for?

June 2, 2010 12:12 PM


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Additional Federal Funding Would Help

By Rich Sarles

Interim General Manager of the Washington Metropolitan Area Transit Authority

As I said in this forum almost exactly a year ago, I would welcome additional funding from the federal government to cover a portion of our transit operating costs, and I commend those in Congress who are leading the charge on this issue. But just as I said before, I continue to believe that it is imperative that these funds be new dollars, not taken from existing or proposed capital funding sources.

I support the bill proposed by Senator Dodd and others because it would provide new dollars to help transit agencies bridge these difficult economic times without having to make further drastic cuts to service or take other extraordinary measures, such as borrowing scarce capital dollars to fill an operating gap, as WMATA is doing. I believe that there is a strong national interest in providing these funds, especially during these tough economic times when people are turning to transit as a more cost-effective way to get to their jobs. By getting people to work, transit is playing a key role in our economic recovery. Additionally, transit provides relief to commuters who a...

As I said in this forum almost exactly a year ago, I would welcome additional funding from the federal government to cover a portion of our transit operating costs, and I commend those in Congress who are leading the charge on this issue. But just as I said before, I continue to believe that it is imperative that these funds be new dollars, not taken from existing or proposed capital funding sources.

I support the bill proposed by Senator Dodd and others because it would provide new dollars to help transit agencies bridge these difficult economic times without having to make further drastic cuts to service or take other extraordinary measures, such as borrowing scarce capital dollars to fill an operating gap, as WMATA is doing. I believe that there is a strong national interest in providing these funds, especially during these tough economic times when people are turning to transit as a more cost-effective way to get to their jobs. By getting people to work, transit is playing a key role in our economic recovery. Additionally, transit provides relief to commuters who are facing increasingly longer commutes in metropolitan regions where there is simply no longer an ability to expand highway capacity whether it is federally or locally funded. And of course, transit helps relieve our dependence on foreign oil. By maintaining the strength of our transit systems, we would further promote sustainable communities.

As this legislation progresses in Congress, I would encourage legislators to ensure that the bill provides transit agencies with the maximum flexibility in the use of these new funds. Different transit agencies have taken different steps to balance their budgets in this time of fiscal crisis and it should be up to the local agencies to determine how best to use the emergency federal assistance within the context of their own unique situations.

Going forward, I believe there is a place for federal operating assistance over the long-term, if it is targeted to specific purposes with a clear federal interest, such as to support the operation of paratransit service, a cost that is challenging for state and local funders to keep up with even in good financial times. Again, this funding must not be taken out of existing transit programs or be in competition with new capital dollars, and I would encourage policymakers to look for other new or existing sources of funds for this purpose.

June 1, 2010 10:35 PM


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Allow free markets to work

By Gabriel Roth

Research Fellow, The Independent Institute

For three reasons, federal funds should not be used to subsidize transit services:

First, because it is, illogical, and unjust, to require national taxpayers to finance local services. Those favoring the subsidies may assume that federal funds are costless, but there are alternative uses for them, including returning them to taxpayers.

Second, the principles of both subsidiarity and responsibility require that local authorities which choose expensive transit systems live with the consequences or correct their own mistakes.

Third, because the services for which subsidies are currently requested generally run at low frequencies and at high cost. In contrast, shared taxis, and associations of minibus owners, offer seated services in many cities at higher frequencies, lower costs and without subsidy. Examples include the “Black Taxis” of Belfast, the Por Puestos of Caracas and the Sherut taxis of Israel. In the US such services are generally illegal but run without subsidy in Atlantic City (legally) and in New York City (legally).

June 1, 2010 11:57 AM


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Save Jobs and Preserve Services

By Ed Wytkind

President, Transportation Trades Department, AFL-CIO

Sen. Dodd’s emergency operating assistance legislation will save thousands of jobs and preserve public transit services for millions of riders.

Thousands of transit workers won’t keep earning a paycheck without help. But the impact is far greater than just those who work for America’s transit systems. Without this legislation, the deep service cuts announced or threatened nationwide will undermine working people and businesses still reeling from the effects of the recession.

Despite growing transit ridership, the economic downturn has produced state and local government budget shortfalls that have blown a hole in transit agency budgets. In more than 8 out of 10 public transportation systems across the country, job and service cuts or major fare increases have occurred or are planned.

New buses don’t help transit agencies if they can’t afford to employ bus drivers or mechanics. That’s one of the important lessons learned from the stimulus bill, which was amended to allow transit agencies to use a portion of federal funds for...

Sen. Dodd’s emergency operating assistance legislation will save thousands of jobs and preserve public transit services for millions of riders.

Thousands of transit workers won’t keep earning a paycheck without help. But the impact is far greater than just those who work for America’s transit systems. Without this legislation, the deep service cuts announced or threatened nationwide will undermine working people and businesses still reeling from the effects of the recession.

Despite growing transit ridership, the economic downturn has produced state and local government budget shortfalls that have blown a hole in transit agency budgets. In more than 8 out of 10 public transportation systems across the country, job and service cuts or major fare increases have occurred or are planned.

New buses don’t help transit agencies if they can’t afford to employ bus drivers or mechanics. That’s one of the important lessons learned from the stimulus bill, which was amended to allow transit agencies to use a portion of federal funds for operating expenses instead of just capital needs. 82 transit agencies took advantage of this flexibility in funding to date, and thousands of jobs and key services were saved.

As transit agencies deal with record budget gaps, this solution must be expanded. Sen. Sherrod Brown’s and Rep. Russ Carnahan’s legislation answers that call. Giving transit agencies more flexibility gives them greater control as they struggle to make ends meet. This approach should be included in the reauthorization of surface transportation.

Consistent with the President’s and the Congress’s actions to keep police officers, firefighters, and teachers working, operating assistance for transit also preserves vital services and keeps people working.

Budgets are tight, yes. But the emergency operating assistance to transit offers a big return on the investment. The budget crisis in public transportation is a nationwide problem, with both riders and workers severely impacted. More must be done to save jobs and preserve services.

June 1, 2010 9:27 AM


14
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Listening to Low-Income People

By Laura Barrett

For the hundreds of thousands of transit riders facing the loss of the buses they ride to work, the light rail trains they ride to church, the paratransit vans they ride to the doctor, there is no question whatsoever that the $2 billion Senate bill is a good idea. They will tell you that it must be passed as soon as possible so that they won't lose access to the transit they need.

We have started to make a commitment to transit in this country. Increasing numbers of voters—including those who are not transit-dependent—have seen the economic, environmental, and quality-of-life benefits of public transportation and supported funding measures. The recent vote in St. Louis city and county that overwhelmingly approved a half-cent sales tax to fund light rail was a perfect example. Local, state and federal governments have built out a system that provides over ...

For the hundreds of thousands of transit riders facing the loss of the buses they ride to work, the light rail trains they ride to church, the paratransit vans they ride to the doctor, there is no question whatsoever that the $2 billion Senate bill is a good idea. They will tell you that it must be passed as soon as possible so that they won't lose access to the transit they need.

We have started to make a commitment to transit in this country. Increasing numbers of voters—including those who are not transit-dependent—have seen the economic, environmental, and quality-of-life benefits of public transportation and supported funding measures. The recent vote in St. Louis city and county that overwhelmingly approved a half-cent sales tax to fund light rail was a perfect example. Local, state and federal governments have built out a system that provides over 10 billion passenger trips per year. Public transportation in American is not anywhere close to what it needs to be, but we have put a significant down payment on what can be a great transit system in time.

Our challenge in a time of economic crisis is not to starve the system that we all worked together to create, but to realize that the impact of the crisis makes transit service more important than ever. The Senate bill recognizes this and courageously puts the concerns of low-income people front and center. The bill's second line reads: "Many low-income workers, older Americans, and people with disabilities depend on transit service to get to jobs and health care. Reduced service and higher fares can have a devastating effect on their quality of life."


It's not every day that Congress is so right about something so important. The Senate bill is proof that Washington is listening to the dozens of TEN member organizations and allies in 41 states -- people who are painting giant red Xs on buses and trains about to be cut, people who are speaking out about how transit crises are robbing them of access to jobs, health care, education, and opportunity. It is inspiring to have eight prominent senators -- Sens. Dodd, Schumer, Menendez, Lautenberg, Durbin, Brown, Reed, and Gillibrand -- say that equity issues are one of the main reasons they support public transportation. It's a sign that they're listening. We've got a long way to go to get this bill passed, but if we do, we can prevent our national transit crises from leaving low-income people stranded at the bus stop.

June 1, 2010 8:36 AM


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Preserve The Lifeline

By James Corless

Campaign Director, Transportation for America

The $2 billion allotted toward mass transit in the Public Transportation Preservation Act would be a significant lifeline for transit agencies. APTA’s survey speaks to the macro-level problem, but a look under the hood paints an even bleaker portrait. New Jersey Transit just raised fares on interstate and commuter buses by an average of 25 percent, Chicago has let go of nearly 1,000 employees and the Sacramento transit system in California cut weekend and night service almost to the bone. C-Tran riders in Clayton County, Georgia were met with one word: closed. Service was eliminated entirely in April, two millions rides out of commission.

As readers might know, Transportation for America has been monitoring the nation’s transit funding crisis on an interactive map, which features 150 agencies and counting. By almost any metric, the situation has worsened since our initial launch in August of last year. As if to punctuate just how bad things are, members of the local Amalgamated Transit Uni...

The $2 billion allotted toward mass transit in the Public Transportation Preservation Act would be a significant lifeline for transit agencies. APTA’s survey speaks to the macro-level problem, but a look under the hood paints an even bleaker portrait. New Jersey Transit just raised fares on interstate and commuter buses by an average of 25 percent, Chicago has let go of nearly 1,000 employees and the Sacramento transit system in California cut weekend and night service almost to the bone. C-Tran riders in Clayton County, Georgia were met with one word: closed. Service was eliminated entirely in April, two millions rides out of commission.

As readers might know, Transportation for America has been monitoring the nation’s transit funding crisis on an interactive map, which features 150 agencies and counting. By almost any metric, the situation has worsened since our initial launch in August of last year. As if to punctuate just how bad things are, members of the local Amalgamated Transit Union in Atlanta recently joined with riders and community supporters to mark buses and trains slated for elimination with large red X’s.

We know that millions of Americans rely on transit to meet their basic needs regardless of the economy, but we often forget how critical this access is when times are tough. It is not just about saving the bus driver’s or rail operator’s job, it is about the people who ride transit to get to their jobs or seek potential jobs. Kids need to get to school, Americans with health problems need to get to the hospital and getting to work on time requires a system people can count on. It’s a sad fact of the economic downturn that we have the least ability to pay for needed services when people rely on them the most.

By approving this $2 billion lifeline for public transportation, Congress can keep people in their jobs and able to access their jobs. Americans are right to be concerned about how to pay for what is coming out of Washington, but this is one area with a concrete need and immediate benefit. How will our economy recover if people can’t get to work? In what scenario is sustained growth and opportunity achievable when Americans can’t get where they need to go?

Congress can go a long way toward keeping Americans moving by passing this important bill. We hope Washington acts.

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