Categories
Finance

State Decision Making in the Context of Federal Transportation Funding

» An examination of STIP plans shows wide variation in planned use of federal transportation dollars across states, with limited ability to maneuver independently.

Because of the sheer number of states in the U.S., it is often simpler to discuss federal transportation investment policies or state investments in the aggregate than make comparisons between states. Overall, for example, transit accounts for about a quarter of national spending on ground transportation — a bit more than the 20% of funds appropriated directly to public transportation by Congress, showing that many states are moving a small amount of their highway funds into transit programs. Looking at the national level, however, fails to provide an accurate evaluation of what is occurring on the ground in different parts of the country. States, after all, are often wildly different in political ideologies and historical mobility patterns.

The Tri-State Transportation Campaign (TSTC), a New York-based advocacy group, recently conducted a major study that examined Statewide Transportation Improvement Programs (STIP) to determine how states are planning to use the transportation dollars that they are allocated by the federal government. The STIP reports are required by Washington to demonstrate which projects at both the state and metropolitan area levels will be prioritized with the funds that are expected under the transportation authorization over the next four years or so (state plans differed in terms of the specific years covered). TSTC helpfully categorized all projects being planned by states into nine categories of transportation investment, from transit to new road capacity to bridge maintenance.

The TSTC report, written by Renata Silberblatt, emphasizes the need for states to improve the accessibility of their STIP documents, provide uniform categorization of projects, and develop performance metrics. Currently the federal government’s guidelines on how this information is distributed are not strong enough, she argues.

The value of TSTC’s research is broader than this, however: By examining how individual states are planning to spend their federal dollars, we can extrapolate differences and similarities between states and evaluate whether existing programs are working to encourage the right sorts of mobility investments.*

According to TSTC’s research, on average, states spent 20% of federal funding on transit, 39% on road and bridge maintenance, 23% on highway or bridge capacity expansion projects, and 2% on bike and pedestrian programs. But states diverge dramatically on these counts, as might be expected. The following charts, in which I have compiled TSTC’s nine transportation funding categories into five, show how states are planning to spend their transportation funding.

As the following chart shows, seven states are planning to spend more than 40% of their federal ground transportation funding on transit — Hawaii, New York, Massachusetts, Virginia, Colorado, Illinois, and Utah. These are all states with large urban populations, though the inclusion of Virginia, Colorado, and Utah is likely a result of those states’ large planned transit capacity projects over the next few years — the Dulles Silver Line Metro expansion, Denver’s Fastracks, and Salt Lake City’s TRAX programs.

Unsurprisingly, other states were more likely to spend a large percentage of their funding on road or bridge capacity expansion, as shown in the chart below. Six states — North Carolina, Indiana, Arizona, Arkansas, Kentucky, and Mississippi — are planning to spend more than 40% of their federal funding on such new capacity programs. In general, these states are clearly prioritizing their roads systems over new transit. States that are spending a very large percentage of their transportation funding on roads are likely to be those where there is little opportunity to expand transit ridership.

Interestingly, Utah and Texas are two states that stand out as spending very large amount of federal funding on both transit programs and new highway capacity (to a lesser extent, Maryland, California, and Illinois show similar characteristics). It is worth questioning whether new transit programs in those places will be well used when so much money is being spent on roads at the same time.

Most states fall somewhere in between these extremes, planning to spend the largest amount of their funding on highway and bridge maintenance. These states’ populations are likely to use similar modes of transportation as they do today into the future. The states that emphasize new road construction over maintenance are likely to experience a decline in the quality of their existing roads and encourage increasing suburban sprawl. Choosing to invest more in new and bigger highways (rather than maintained existing ones) is a political choice that says a lot about a state’s growth priorities.

Most highway funding can be redirected to transit funding if states so choose. Does this examination of the STIP plans demonstrate that states are making independent decisions about their use of federal funding?

The Federal Highway Administration and Federal Transit Administration have analysed how they expect to distribute funding to states and metropolitan areas in fiscal year 2013 based on formula programs (this figure does not include New Start funding for new transit capital projects). These formulas are defined by such variables as population, highway miles, and transit use, among others. Looking at New York State’s appropriations show that it is to be provided about $1.7 billion in transit funding and $1.6 billion in highway funding, roughly equivalent to how the state’s STIP is allocated. Similarly, North Carolina will receive about $1 billion in highway funding and $100 million in transit funding, also similar to the distribution indicated by TSTC’s analysis, where about 10% of federal dollars are to be spent on public transportation. New York gets so much more transit funding than North Carolina because of the far higher ridership of the former state’s rail and bus systems.

On the other hand, Utah is only expected to receive about $62 million in transit in FY 2013, compared to $312 million in highway funding. But its large transit capital program, involving the construction of new light rail and commuter rail lines in and around Salt Lake City, means that it will actually distribute a far larger share of its received federal funds on public transportation. And Hawaii will spend such a large percentage of its funds on transit because of the state’s decision to invest in the Honolulu rail project. So some states do seem to be emphasizing public transportation investments more than their standard Congressionally defined shares might indicate.

Even so, most states appear to be planning to spend about as much on transit as Congress appropriates to them under the formula programs. As a result, the federal transportation program appears to be reinforcing existing patterns: States with lots of highways and drivers get more funding for those roads and car owners. States with a lot of transit users get a large amount of money for public transportation. States do not appear to be systematically shifting roads funds towards transit. The result is that it is difficult to envision significant mode shifts towards public transportation as a result of federal investment — particularly because there is no significant federal funding available to cover operating costs.

The one exception is in the New Starts program, where states that want to significantly expand their transit infrastructure can do so. Is that an adequate range of intervention for the federal government? Is that enough to promote mode shifts towards transit?

* It should be noted that TSTC’s report included projects that were partially funded with local or state funding if federal funding was also involved and if they were included in the STIP plans (not required if there was no federal funding). This means that projects entirely funded by state and local governments are not included. Moreover, projects funded by the GARVEE and ARRA programs are not included. Finally, because of a lack of adequate information, Connecticut, Wisconsin, and Washington, D.C. are not included in the above charts. Washington State’s data is a bit deceiving because of TSTC’s decision to classify Seattle’s massive Alaskan Way Viaduct project in its own category.

Categories
High-Speed Rail Intercity Rail United Kingdom

UK Ramps Up Intercity Rail Investments

» Continued investment in the U.K.’s rail network comes at a considerable cost, but spending on existing services will complement planned high-speed rail route and further recent ridership increases.

Opposition to the United Kingdom’s second high-speed rail line, the £17 33 billion* connection between London and Birmingham called HS2, has been stewing for years. Critics of the line — much like opponents to rail programs in the U.S. — suggest that the project’s benefits do not justify its enormous cost (both monetarily and in terms of its effects on the rural landscapes trains will pass through) and that other investments on existing lines would be more effective.

While the U.K.’s Conservative-led coalition government, itself teetering and facing a double-dip recession, continues to maintain its support for the HS2 program, it has not limited its public investments just to that line, and this week it announced a £9.4 billion ($14.6 billion) scheme to electrify a number of routes throughout the country between 2014 and 2019. Certain of these projects were announced in 2009 under the then-Labour government. The improvements will provide for a significant expansion in capacity on existing lines, decrease operating costs, and allow the introduction of faster, more agile electric trains — in addition to clearing the way for more space for freight trains.

The spending, which will electrify routes from London to Cardiff, Manchester to Liverpool and York, and the Midland Main Line, is part of a £16 billion total investment in the National Rail route network planned for the five-year period, whose hallmark projects include the construction or improvement of two cross-London lines, Crossrail and Thameslink. It comes after fifteen years of £35 billion of concentrated investments in the U.K.’s rail system — spending in tracks, signals, stations and trains that has radically improved service and dramatically increased passenger counts.

A diesel East Midlands train running north from London on a line scheduled for electrification. From Flickr user Ingy the Wingy (cc)

Unlike HS2, the planned line electrifications are unlikely to see much opposition, in part because the investments made in the country’s rail network thus far have proven so popular despite their high cost. Though there is quite a bit criticism of the operations regime used in the U.K., in which private operators bid for routes (indeed, Labour is “flirting” with re-nationalisation), the publicly owned infrastructure has been improved to such an extent that the nation now boasts the second-most heavily used rail network in Europe, after Germany. Last year, 1.35 billion riders took to the rails, an increase of 50% over the past decade. Though Amtrak’s recent passenger growth has been impressive, its roughly 30 million annual passengers pale in comparison.** So there is cross-party support for projects that improve the U.K.’s railways.

This raises questions about the right approach for investment in rail systems in the United States. The only true high-speed rail project with any reasonable chance of even partial implementation in the U.S. currently is the California High-Speed Rail system, but that effort will require a significant infusion of future federal funds to move beyond an initial operating segment. On the other hand, there are major improvements being sponsored in states such as North Carolina and Illinois that will speed up existing passenger routes, improve freight operations, and expand the number of daily services. In many ways, those latter programs are much more like the British approach than the true high-speed investment proposed for California, and as the evidence has demonstrated, a serious effort to improve existing lines is likely to attract many more passengers.

Yet opponents have cried foul repeatedly in the U.S. Aaron Renn, whose view replicates that of many conservatives, wrote last week that Illinois’ investment in improving the corridor between Chicago and St. Louis represented little more than the implementation of “Toonerville Trolleys” because of the proposed trains’ relatively low 110 mph maximum speeds. He then bemoaned the high cost of the California plan and Amtrak’s Northeast Corridor project, while at the same time arguing that “high speed rail could play an important role in US transportation.” He suggests that supporters of high-speed rail will support every project with that name attached to it, but he himself does not seem willing to endorse any project of the type once it reaches the planning phase. Perhaps American supporters of rail are too enthusiastic, but half of that excitement is simply a reaction to the overwhelming, mind-numbing skepticism of opponents.

The fact is that there are reasonable quibbles to be articulated against most infrastructure projects, and it is possible that significant improvements to the U.S.’ existing rail system could be made at a lower cost. In addition, as Alon Levy has noted, improved cooperation between agencies is necessary; it is no surprise that the U.K.’s single rail infrastructure owner is better able to handle upgrades than America’s balkanized pattern of public and private track control. But it seems evident that working through problems where they exist and devoting money to improvements where possible will lead to increasing use of the country’s trains — as has been the case in the U.K.

Nevertheless, difficulties remain in Britain as well. Transport Secretary Justine Greening noted that the private passenger rail companies in the U.K. were operating with “waste and inefficiency” but that there was nothing to do in the immediate term. Meanwhile, because of inadequacies in government funding, passengers would have to take the fall for much of the cost of new spending, resulting in planned increases in fares equal to annual inflation plus 3%. That increase is probably worth it to riders, who will be getting better service as a result, but it will still take a toll on peoples’ finances and potentially limit future ridership increases. At the same time, a similar approach is nearly impossible in the U.S. because of the tiny number of existing passengers.

The U.K. has been a train-riding country for more than a century and it never abandoned its passenger services, unlike the U.S. So it has been easier — both politically and cost-wise — for it to build up passenger counts in recent years through systematic investment. Can the U.S. repeat its successes, despite the lack of existing riders (and related political will), the high construction costs necessary to improve services, and the lack of national control over rail infrastructure?

* The £33 billion cost quote includes links north from Birmingham to Manchester and Leeds.

** Though this figure does not include commuter rail services, of which many are included in the British number. However, even with commuter rail added to Amtrak, total intercity rail ridership in the U.S. is about 500 million a year — in a country five times as large as the U.K.

Categories
California High-Speed Rail High-Speed Rail

A Different Future with California High-Speed Rail

» California’s Senate takes a courageous step in supporting the first construction stage of the state’s high-speed rail project. There is much more work to be done.

Last week, America’s future in high-speed rail took a modest step forward. On Thursday, California’s State Assembly approved by a 51 to 27 margin the release of $2.5 billion in state bonds for the construction of a 130-mile segment of 220-mph tracks through the Central Valley and the implementation of $2 billion in commuter rail improvements in the Bay Area and Los Angeles regions. On Friday, by a vote of 21 to 16, the State Senate expressed its agreement.* If all goes as planned, the project could be under construction by the beginning of next year. Tracks between Madera and Bakersfield could be ready for use by 2017, the first step towards what could be an eventual 2h40 journey time for trains traveling from downtown San Francisco to Los Angeles.

The passage of the bill, which also frees up $3.2 billion in federal funds allocated for the project, is a major success not only for Governor Jerry Brown and California’s Democratic Party (no Republicans in either chamber voted in favor of the program), but also for President Obama and his Department of Transportation, which have championed high-speed rail as an essential element of America’s future transportation system. Moreover, it is a victory for those who argue that, despite the challenges and the compromises, in order to advance societal change on a grand scale, major investments in projects such as this are necessary.

The line section that will be built first has not been without controversy. Choosing to begin construction in the Central Valley, away from the population centers of the Bay Area and L.A. Basin, has induced the expected calls of a “railway to nowhere.” Yet the route selected in fact serves an area with a population of 3 million people and offers the crucial link between the two large metropolitan areas to the north and south. It is the only section of the system where sustained speeds of 220 mph can be offered by trains cruising down the straight-aways through farmlands. And it can be done at the moderate cost of about $44 million per mile, in a similar range as projects such as France’s LGV Sud-Europe Atlantique, now under construction (211 miles at a cost of €6.2 billion, or $7.6 billion, so about $36 million per mile).

If the only goal of the project were to connect L.A. and San Francisco as quickly as possible, the project could have been built to run around I-5, which charts a slightly straighter route through the Central Valley — not doing so, the L.A. Times told us today, could be a major flaw in the project.** But that alignment would skip over the Central Valley’s cities, depriving them of the direct access to California’s biggest regions. Because they currently do not have good airline service, they stand to be some of the places that benefit most from the project.

More importantly, though, California’s rail project is a statewide program about more than people from the coast. Without support from some residents and politicians in the Central Valley, the program could not have been passed either in 2008 or last week. Avoiding Fresno may have made building any high-speed rail impossible.

This raises a larger question. The high-speed rail project is quite expensive and it is not perfect. Its creation and development have been the result of compromise and negotiation between political leaders whose interests do not necessarily coincide with the ideal investment. But we live in a democracy where our elected officials, not engineers, make final decisions about projects such as this. Does an imperfect project deserve to be abandoned? I think not. It should be criticized and improved, but its weak points should not be achilles heels.

Map of the initial plans for service along the California High-Speed Rail route, showing the Madera-Bakersfield segment now approved for construction. Source: California High-Speed Rail Authority

What is so exciting about California’s project is the initiative the state and its municipalities have taken in the advancement of a program that could — if the public so desires — alter permanently the geography of America’s most populous state. By passing the $9.5 billion referendum in 2008, state voters indicated that they were willing to put a very substantial chunk of their own money, not just federal funds, on the line for an investment that will truly offer an alternative to automobile and aviation travel in this state. San Francisco, San Jose, Los Angeles, and San Diego are each in the process of significantly expanding their local rapid transit systems in a manner that will make them compatible with local high-speed rail stations. And the state has made a priority the development of a land use strategy that encourages denser construction around stops.

In other words, despite years of opposition from conservative groups concerned about spending of California’s “readiness” for high-speed rail, the state has advanced with an entrepreneurial spirit the project and accompanying changes. No other state has made nearly as serious an effort to consider its future infrastructure needs and integrate them into a unified planning policy.

Even if the initial construction segment is put under construction as planned — that may be difficult considering the regulatory approvals and barrage of lawsuits standing in its way — there are enormous obstacles to actually implementing the planned connection between San Francisco and Los Angeles, the most significant example of which is the lack of adequate fiscal resources. The California High-Speed Rail Authority’s 2012 business plan expects that it will cost $31 billion to connect Bakersfield to the San Fernando Valley, meaning that about $18 billion in funding is still necessary even for this first step, taking into account the roughly $8 billion released last week and the additional $5 billion for fast trains included in the 2008 referendum. For a one-seat ride between San Francisco and L.A., $51 billion will be necessary; for 2h40 service between the cities, $68 billion is required (this is in year-of-expenditure dollars; this is equivalent to $53 billion in today’s money).

While that figure might be acceptable from the perspective of overall public investment in infrastructure, where will that money be found? The U.S. transportation reauthorization bill passed last week provides no additional funding for high-speed rail. Republicans have demonstrated against intercity rail and rejected several projects despite federal support. In his campaign platform, Mitt Romney cites “privatizing Amtrak” as a top way to save the government money. The outcome of the 2012 elections will determine whether California will be able to move ahead as expected, or whether it will have to put off plans by two years or more.

The reality is that the prospects for the project’s completion in the next decade and a half, as currently planned, are limited. There is simply inadequate determination in the U.S. political sphere to make a project of this magnitude anywhere close to easy to execute. That does not mean that the project will not be built, but that making it happen will require years of negotiations, compromise, and expansion of popular support. We could be at the start of something very exciting, but there is a lot of work still left to be done.

A final note: To those who would suggest that the funds would be better used in the Northeast Corridor (an often-cited example of a “more reasonable” place for high-speed rail), there are two limitations that make such a project less than ideal. For one, the Northeast Corridor runs through eight states and the District of Columbia, leading to conflicting priorities and differences in opinion about the right investments to make. While Connecticut might want to spend its share of funding on improving train travel between New Haven and Hartford, Massachusetts might be interested in improving the main line along Connecticut’s shore to allow fast trains between New York and Boston. How can those problems be resolved with so many conflicting claims to power?

Moreover, whereas California’s citizenry has voted in favor of spending $10 billion of the state’s money on the high-speed rail projects, Northeast Corridor states have proposed nothing of the sort, and their residents have not had the chance to endorse anything similar. It would be unjust for the federal government to orient funding towards a section of the country with so little local commitment to a project, whatever the need.

Two, the high cost of California’s high-speed project has of course caused significant controversy, but the financial requirements of a true high-speed line for the Northeast would be far higher. The Boston-Washington corridor is simply much more developed than California’s Central Valley and thus there is less space to install track capable of 220 mph; the only way to do so is to invest in very expensive tunnels or land takings. Thus it is no surprise that Amtrak’s latest vision for high-speed rail service in the Northeast, released on Monday, would cost $151 billion to construct by 2040. If the West Coast project seems expensive, Amtrak’s seems extravagant.

* By a close, one-vote margin. The measure required a two-thirds majority to be approved.

** The article claims that French rail company SNCF recommended a route along I-5. Yet SNCF’s 2009 proposals for U.S. high-speed rail, which I broke, say “SNCF endorses the alignment proposed by the CHSRA project linking San Francisco Transbay Terminal to downtown Anaheim, passing through Los Angeles Union Station, Palmdale, Bakersfield, Fresno, Gilroy, and San Jose Diridon.” In other words, the company explicitly endorsed the alignment through the Central Valley cities, not along I-5.

Categories
Congress Finance

Congress Passes Major Transportation Bill, Preserving the Status Quo

» MAP-21 will provide federal funding for highways and transit over the next 27 months. Passing the bill was an accomplishment for a do-little Congress, but serious issues about how to pay for transportation in the future have yet to be resolved. Nonetheless, there are some interesting features in the bill for new transit capital projects.

On Friday, the U.S. House and Senate passed MAP-21*, the federal government’s latest ground transportation authorization bill, modeled closely on the bill that passed the Senate in March. The $105-billion piece of legislation will provide funding for essential highway and public transportation programs, most of which are in the form of formula-based allocations that direct money automatically to states and metropolitan areas. The bill will be in effect for 27 months, expiring in September 2014.

MAP-21 replaces SAFETEA-LU, the last long-term federal transportation bill, which expired in 2009; in the meantime, we have seen extension after extension of that law and a seemingly never-ending set of grueling disagreements about the future of mobility policy in the U.S. that revealed stark partisan differences about the role of the federal government in directing the construction and maintenance of the nation’s road and transit systems.

There have been points in this debate when the chances of a bill passing — any bill other than an extension — seemed close to nil. Democrats have demonstrated a sincere interest in expanding the amount spent on new transportation capital, especially in high-speed rail and transit, as illustrated by President Obama’s proposal in early 2011 for a $556 billion, six-year bill. Republicans, meanwhile, have argued for constraining the amount spent on highways to revenues collected from fuel taxes — and abandoning efforts to expand funding for sustainable mobility. But ultimately the two sides have similar goals: To maintain existing transportation funding without increasing taxes to pay for them; in other words, to preserve the status quo.

Indeed, that is the first point to make clear about this transportation bill: It is neither transformational nor a long-term problem-solver. It does not “fail America,” as some have suggested, by failing to make the major reforms that have been suggested by proponents for four years. It does reduce the complication of moving a major project through the federal grant process and it reduces the overall confusion of programs in the U.S. Department of Transportation, two important changes.

It is, however, a disappointment that the bill does not do more to equalize decision making between modes, of course: Why do there continue to be separate budgets for highways and for transit? Why can’t rail (which goes unfunded in this legislation) be compared to highway expansion when the latter is being considered? Meanwhile, why do transit expansion projects continue to be subjected to rigorous competitions for funding, while highways do not?

The bill continues the decades-long trend of declining investment in transportation at the national level. As the following chart shows, as a share of the federal budget, transportation spending has declined from about 3% in the 1960s to about 2.5% in the 1970s to about 1.5% today. At the national level (including local and state funding), transportation spending has declined from about 2% of U.S. GDP to less than 1.5% (though there was a stimulus-related jump in 2009). There has been a general decline in the perception of the importance of spending public dollars on transportation. That trend will continue under MAP-21, which provides about $50 billion per year in funding, equivalent to spending today adjusted for inflation.

It is worth questioning whether we need to significantly increase spending on transportation. The massive federal investments in new highways from 1956 to the mid-1980s encouraged the decentralization of our cities and a decline in our transit systems. Now that our cities are growing again, some might argue that they should simply find the tax revenues to pay for improvements themselves — but that suggestion has its real weak points, specifically because it diminishes the redistributive potential of the federal system. Moreover, as long as national funding continues to pump tens of billions into highways every year, I question how cities will be able to keep up.

U.S. ground transportation spending has declined as a percentage of GDP or federal government budget. Dotted line shows projections based on MAP-21 funding. Data from the Congressional Budget Office and the Office of Management and Budget.

Preserving the status quo doesn’t mean keeping spending in line with revenues from the fuel tax. Because neither party has demonstrated an interest in working for an increase in the gas tax or establishing a viable alternative, maintaining current spending levels means that funds must be identified from elsewhere.

As such, the law creates a number of new financing methods to pay for expenditures not covered by the Highway Trust Fund, into which fuel taxes flow. The biggest change involves altering the way pension interest rates are calculated. But most of the shortfall will be covered by the government transferring in $18.8 billion in general funds from income tax collections, $6.2 billion in FY 2013 and $12.6 billion in 2014. Because the U.S. operates with a deficit, that money is effectively debt-based. Got a problem with that? The vast majority of legislators from both sides of the aisle do not seem to be particularly concerned.

As far as I know this is the first time in a federal transportation authorization bill that federal spending on ground transportation will be funded from a source outside of user fees. The conclusion: Federal transportation funding is no longer really dependent on the collection of user fees, and that’s not necessarily a bad thing at all.

MAP-21 will expire in 2014, but as indicated by the transfers from the general fund that will be necessary to fund programs, it will carry on the legacy of a bankrupt Highway Trust Fund. The Congressional Budget Office estimates that — assuming a flat level of spending only adjusted to inflation — by FY 2015 there will be a $9 billion shortfall in the Fund; by FY 2022, it will have increased to $95 billion. That’s money that will have to be redirected from the general fund again beginning in 2014, when the bill’s replacement is being devised, unless by then a new user fee funding device has become sufficiently popular to members of the next Congress.

MAP-21, of course, is more than just a spending bill. Like its predecessor, the large majority of funding in the bill is dedicated to highway spending. As can be seen in the chart below, transit and rail have established a share of about a quarter of federal ground transportation spending, a ratio that is similar to that of spending by state and local governments. That split has been in place since the mid 1980s and is way down from the large percentage of federal ground transportation funds dedicated to transit and rail in the 1970s and early 1980s. MAP-21 maintains that politically motivated balance. (The bill does decrease funding for bicycling and pedestrian programs, obviously not good news, but I’ll leave that discussion to others.)

Transit funding has stabilized at about 25% of all ground transportation spending. But, in terms of federal spending, this is way down from the late 1970s and early 1980s. Data from the Congressional Budget Office.

In terms of funding for mass transit, the bill offers $8.478 billion in FY 2013, rising to $8.595 billion in FY 2014, both on par with existing funding levels, adjusted for inflation. Programs designed to distribute funds by formula remain the largest percentage of the bill and grow similarly, accounting for about $6.5 billion in spending in both years, mostly to pay for the purchase of new buses and the reconstruction of facilities (such as through State of Good Repair grants). The capital investment program, however, has been cut by about $50 million and is stuck at $1.91 billion in both years. This funding provides for the Small Start and New Start programs, which provide the grant funding for new rail and bus corridors.

Despite the lack of increase in funding for those capital expansion programs, a close examination of the bill shows that it offers a number of interesting changes in the way this money is to be allocated to transit agencies:

  • The New Starts program, in the past reserved to new rail or bus lines operating in dedicated rights-of-way in new corridors, will be expanded to include “Core Capacity Improvement Projects” that significantly improving existing infrastructure while increasing capacity on the existing line by 10% or more.
  • Bus rapid transit projects will be classified and funded in the following two ways:
    • Corridor-Based BRT will lack a separate right of way. As the bill describes, however, these BRT programs will involve “a substantial investment in a defined corridor as demonstrated by features that emulate the services provided by rail… including defined stations; traffic signal priority for public transportation vehicles; short headway bidirectional services for a substantial part of weekdays and weekend days.”
    • Fixed Guideway BRT, on the other hand, means a bus-based project that includes all of the features of the Corridor-Based BRT, plus “the majority of the project operates in a separated right-of-way dedicated for public transportation use during peak periods.” The law includes the provision that the federal government will provide 80% funding for up to three such projects each fiscal year. This is an excellent opportunity for cities that want to invest in a big and serious BRT program to set their ideas into action, with limited local support needed. I hope they’re paying attention.
  • The federal government will provide expedited review for fixed guideway projects under two circumstances: New Start projects whose budget is less than $100 million in total; and projects designed by transit agencies that have recently completed similar projects that have achieved or surpassed expected budget, cost, and ridership measures.
  • The Secretary of Transportation will be able to increase the federal share for a capital expansion project if “the net capital project cost… is not more than 10 percent higher” and ridership estimates are “not less than 90 percent” of the estimates at the time the project was approved into the engineering phase of the review process.

The bill expands the TIFIA reduced cost loan program to $1 billion a year (from just over $100 million) and increases the maximum federal share from 33% to 49%, both important advances for cities that promise to dedicate future tax or toll revenues to pay for transportation improvement programs. Essentially, the federal government is increasing the ability of local governments to take advantage of lower federal borrowing costs. In Los Angeles, which has promoted the program heavily under the name “America Fast Forward,” TIFIA loans will allow for the completion of such projects as L.A.’s Westside Subway.

MAP-21 does allow small transit agencies — those with 100 buses used in the peak — to receive operating assistance (currently only capital expenditures are covered by federal transit funding). Though this provision isn’t the kind of large increase in operations support that might be beneficial to cash-starved agencies that are expanding their systems while firing bus drivers, it raises the question of whether large transit agencies could split themselves into smaller operating entities to receive federal operating support via a loophole in the law.

The bill does have one really unacceptable feature: It reestablishes the inequitable relationship between the tax benefits provided for people using transit and people who park. Before the passage of the stimulus in early 2009, people taking transit were able to deduct up to $120 a month from their taxes for doing so, whereas people who parked were allowed to deduct $230; with the stimulus, those figures were temporarily equalized at $230. Now, MAP-21 pulls transit users back down, to $125 in deductions a month, compared to $240 a month for parkers. That’s a disappointment.

Moving Ahead for Progress in the 21st Century. The bill text. It still needs President Obama’s signature to become a law, though this is expected in the coming days.