Finance Infrastructure

Oberstar's Infrastructure Bill May Define the Transit Equation

Congressman James Oberstar (D-MN), the House’s most influential member on transportation issues, spoke on the 7th to the House Democratic Steering and Policy Committee about his vision for incorporating transportation funds into the economic stimulus bill (speech PDF). His fundamental argument was two-fold: too many of the nation’s construction workers are out of work in the sagging economy, and the country has massive infrastructure needs that must be met in the coming months and years. And so he suggested the renewed consideration of his own $85 billion transportation bill, the Rebuild America proposal.

In the period between Mr. Obama’s inauguration and the expected autumn renewal of SAFETEA-LU, the overall U.S. transportation bill, funding priorities must be established for how money will be spent on highways and transit, and that is Mr. Oberstar’s intention in this bill, whose $85 billion outlay would represent about a tenth of the Obama stimulus package.

Though the bill continues to fork over more money to highway projects than transit ones, the ratio is much improved from existing transportation legislation – while it proposes $30 billion for roads, it would allocate a large $12 billion to transit and $5 billion to intercity rail. The remainder of the money would go to aviation, environmental infrastructure, the U.S. Army Corps of Engineers, and Federal building construction.

Importantly, unlike Mr. Obama thus far, Mr. Oberstar is willing to discuss providing funding for projects that are not yet ready for construction, but which are almost there. In other words, while much of the talk on the economic stimulus has revolved around getting projects started within 90 days, this bill will provide for projects that will begin construction in 90 days or 1 year. This is a significant factor in improving the climate for transit, because while many road projects literally could begin construction tomorrow (highway resurfacing is the most prominent example), there are far fewer transit projects that ready – but given a timeline extension of just a few months, they would be.

This longer-term view makes this bill far more palpable and encourages the development of projects that had been just beyond the means of municipalities. Such funding, for instance, could pay for renovation of dozens of New York City subway stations, in desperate need of repair, but which are not ready for construction in the 90-day timetable. But a 1-year timeline allows for planners to prioritize stations for reconstruction, design the improvements, assemble a team, and put the project together.

  • And, in fact, $7.5 billion of the bill would go directly to similar projects, based on the predefined urban and rural formula grant system, which basically gives funding to municipalities in correlation to transit ridership and overall population. The bill would require half of those funds to be authorized for projects getting started in 90 days and the other half for projects beginning within the year. States would take the charge in deciding how the funds are used. $2 billion in addition would go to transit energy funding, which for the most part would be used for the purchase of hybrid buses, with the intention of cutting down on fuel use and pollution emissions. Here is the expected transit funding for the top ten states based on the existing formula grant system (you’ll see here that the formula prioritizes large, urban states):
    • California – $1.2 billion
    • New York – $1.1 billion
    • Illinois – $449 million
    • Texas – $424 million
    • New Jersey – $424 million
    • Florida – $364 million
    • Pennsylvania – $312 million
    • Massachusetts – $239 million
    • Washington (state) – $204 million
    • Ohio – $194 million
  • Most interestingly perhaps is the bill’s inclusion of $2.5 billion in funds for new start projects, which are major transit investments, such as new rail lines and busways. More than 19 such projects are ready for more funding but so far have missed out in the FTA’s competitive new start process. Only 25% of the funding would have to go to 90-day commitments, while the rest could be awarded within a year of the bill’s passage. The FTA would approve which projects would be funded by this section of the bill, using existing criteria.
  • Amtrak would receive $1.5 billion in the bill for the purchase of new equipment, improvements to track and catenary, and service expansion. States would get $3.4 billion for their own rail projects, some of which would probably go towards California’s developing high-speed rail system, which is likely to need start-up funds in the coming months. The rest of the funds would likely to go to states like North Carolina and Michigan, which have dedicated rail investment programs.

An overview of the bill (PDF) has been posted on the House Transportation and Infrastructure Committee’s website. State Departments of Transportation would have to develop quick action plans for how to utilize the funds, and would have to submit various reports to the federal government on their progress (PDF) to ensure accountability (PDF). In addition, states that fail to define the use their allocated money within 90 days would have their funds revoked and sent back into the general pool and to be used by other states. If, for example, Wyoming decides that it has little to do with the $10 million that is allocated to it for transit, that money can be reused by other states.

This is an exciting bill that will likely form the basis for the transportation component of the stimulus bill. While it lacks major new ideas – such as the development of an intercity high-speed system – it provides a lot of money to ensure the maintenance of the nation’s transit and rail infrastructure during this difficult time.

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