» Below the surface, it’s a less promising idea than it may seem.
If several members of Congress get their way, struggling transit agencies may get a momentary reprieve and be able to avoid job losses and service cuts, the results of the recession in cities around the country. Senators have added a provision to a war spending bill that would allow agencies to spend 10% of their stimulus money on operating, rather than capital costs. If the measure passes the conference committee with the section intact, this would represent a sea-change from current federal policy, which obligates municipal and state governments to cover operations even as Washington’s formula-based contributions pay for maintenance, repair, and vehicles. For many train and bus operators around the nation, this may sound like a good idea, but in fact it would set a dangerous and unreasonable precedent.
The recession has reduced tax revenue in states and municipalities all over the country; as a consequence, cities from Denver to Charlotte found themselves needing more funds to continue paying their drivers and fueling their buses even as they pursued ambitious expansion plans. The stimulus bill provided some significant help — a total of $8.4 billion in capital funds, with $750 million devoted to New Starts projects — but that aid didn’t do much to ensure that when a new line opened or a section of track was repaired, someone would be there to drive the train on the corridor. If the stimulus was supposed to be about creating jobs, why shouldn’t operating costs, which are mostly labor, be covered?
During the stimulus debate, Representative Peter DeFazio (D-OR) worked earnestly to provide operations funds for local transit agencies, and he even went so far as to vote against the stimulus bill because it lacked what he considered adequate funding for transit. Mr. DeFazio is now fighting to make sure that this Senate provision, which would address some of the flaws of the stimulus, will make it to the President.
Yet, the merits of this proposal are murky. Is this the first step towards long-term federal government aid for operations? And if so, is this the right way to start?
It’s not that transit agencies don’t need more funds — they certainly do. But what I find objectionable about this provision is the fact that it provides an out for municipalities and states that are reluctant to raise their taxes to ensure transit provision, but which have an obligation to do so. It is inappropriate for the federal government to open a commitment to something without a long-term plan. In other words, if the Congress were to determine that it was willing to begin using federal government funds to cover operations — for instance, in this year’s transportation bill — it should first establish a standardized system by which to do so in every budget period, not just in the stimulus.
A formula system designed to reward municipalities that are more efficient in transit provision or more transit-dependent could be used to allocate funds in a way separate from the existing capital formula. Today’s capital formula — which is being used to determine allocations from the stimulus bill — doesn’t address the inequalities in operations which mean that cities like New York cover 60% of total transit spending through fares while others like Atlanta only cover 30%. A new system should be established to equal out those differences; once that system is established, Congress should feel free to allocate as many funds as it wants — as long as they’re codified in federal legislation and assured for many years ahead.
In the meantime, however, this provision would indicate that the federal government is willing to sponsor operating costs without providing any sort of permanent assurance, giving states and municipalities a short delay before they have to do the inevitable and cut service. Most transit systems will use this period to temporarily shore up their finances, but not to negotiate guaranteed, recession-proof funding systems, which is what they actually need.