» Facing construction cost increases, project planners asked for a higher federal share than originally planned. But the FTA has now made clear it will only pay so much for the nation’s biggest transit projects.
In recent years, the federal government has failed to provide a logical explanation for the manner in which it determines the share of funds it contributes to each proposed New Start major transit capital project, leaving the rest to local and state sources. The agency hasn’t provided strong incentives for cities that provide the most “cost-effective” expansion programs, nor has it produced a formula that allows transit agencies to plan their finances for new projects from the get-go. It has also been markedly ambivalent about investments in very expensive transit projects, no matter their respective value per dollar.
Under this system, big cities with big projects serving a lot of transit riders are systematically denied their right to a proportional share of Washington’s spending. Nor is there any clear distribution of funds by metropolitan area or state, in contrast to the formulas used to distribute standard maintenance funds for existing transit networks.
Last week, Portland received the unexpected and unhappy news that the Federal Transit Administration will only commit to 50% of the costs — up to around $736 million — of the 7.3 mile, $1.47 billion Portland-Milwaukie light rail line, a long-planned extension of the region’s MAX rapid transit network.
The project’s completion cost was estimated at $1.2 billion up to only a few months ago. At that time, the TriMet transit agency was able to assemble $600 million in local and state funds, enough to limit its national funding demand to 50% during the New Starts evaluation process, in which it received a medium-high rating, good enough to virtually ensure an eventual federal commitment. The increase in construction costs convinced it to ask for 60% of total funds (around $880 million), the same as it had received for many of its other rail expansion projects in the last two decades.
Yet the FTA has only a limited budget for new transit capacity (its spending is constrained by the decisions of the U.S. Congress), so Portland’s attempt to convince Washington to increase its commitment fell on helpless ears. The FTA argued that the agency didn’t want to imply that it would fund more than half of future transit projects costing more than one billion dollars, that its budget hasn’t significantly increased, and that the Congress has been unable to compromise on the development of a reauthorized Transportation bill, which determines allocations for the government’s transit investments.
This situation leaves the region with a $135 million funding gap if the corridor is to be built as currently planned. The federal government hasn’t demanded that Portland reduce the line’s cost, just that it pay for more of them with local dollars.
But TriMet, unconvinced that local governments will fill the money hole, has committed itself to a “recalibration” of the program to a $1.2 billion price tag, which could involve simplifying stations and reducing the size of park and rides and maintenance facilities. Another option is delaying the construction of the last section of the line. One possibility, unlikely considering the amount of engineering work that has already been completed, is converting the project to bus rapid transit.
The link will extend south from the Portland Transit Mall (which already features the Green and Yellow light rail lines), into the South Waterfront development, over the Willamette River into Southeast Portland (along a bridge shared with the city’s future streetcar loop), and finally into Milwaukie and Northern Clackamas County. It would primarily be built along an existing railroad right-of-way and draw about 30,000 daily passengers.
I have previously suggested that the project has the potential to induce the construction of a number of valuable transit-oriented development projects thanks to its alignment that in some places runs right through an already active cityscape. The Green Line in east Portland, which opened along the side of an interstate highway last year, has fewer such possibilities for densification around stations. And there is always a benefit to working with the transportation technology that already exists; since Portland already has such a large light rail system, there are advantages to sticking with it.
Yet the FTA’s decision to limit its commitment to only 50% of the project’s costs is not about the merits of the project but rather a sign that the government agency will not be able to withstand unlimited increases in transit project costs, and that it will stick to its policy of providing incentives to smaller programs no matter the merits of bigger ones. In some ways, this represents a significant clarification of the DOT’s position when it comes to capacity projects worth more than a billion dollars: The more a city wants to spend after a certain point, the more it will have to find in local funds. This has national implications.
That said, placing blame on the FTA for this situation would be an unfair reflection of the agency’s situation. Again, its budget for New Starts projects is limited by acts of Congress, and it would be politically difficult if it decided to, for instance, spend all its capital funds one year for one massive project. Considering its situation, it has no choice but to impose limits on how much to pay for individual corridors.
But for cities that have transit projects larger than even Portland’s quite expensive line, this city’s financial difficulties should serve as a warning. Either proponents of public transportation encourage their delegations in the House of Representatives and Senate to find a way to increase the money flow for such projects, or restrain expectations about how much Washington will be willing to chip in.
Image above: Rendering of Portland-Milwaukie MAX Project at Milwaukie’s SE 21st Avenue Station, from TriMet