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Wednesday, March 10, 2010

Public Transit Program Issues in Surface Transportation Reauthorization

William J. Mallett
Specialist in Transportation Policy

As enacted in the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA), P.L. 109-59, federal public transit programs were authorized through September 2009. Congress has so far failed to enact a long term reauthorization; consequently, federal transit programs are operating under the authority of continuing resolutions. The longterm reauthorization of transit programs, along with other major surface transportation programs, may take place in a constrained funding environment due to the inadequacy of receipts into the Mass Transit Account of the Highway Trust Fund (HTF), the source of approximately 80% of transit program monies. In the past three surface transportation authorizations, by contrast, federal transit programs received substantial funding increases. In nominal terms, SAFETEA authorized a 46% increase in transit spending over the Transportation Equity Act for the 21st Century (TEA- 21), and more than double the amount authorized in the Intermodal Surface Transportation Efficiency Act of 1991 (ISTEA). 

The two major transit funding programs are the Urbanized Area Formula Grants Program and the Capital Investment Program, which includes the "New Starts" program, the Rail Modernization program, and the Bus and Bus Facility Capital program. Of the nearly $53 billion authorized by SAFETEA for transit programs from FY2004 through FY2009, the Urbanized Area Formula Program accounts for 42% of the total ($22.2 billion), and the Capital Investment Program accounts for 43% ($22.7 billion). The remaining 15% ($7.7 billion) authorized by SAFETEA funds several other programs, such as the Rural Formula Program, state and metropolitan planning, research, and FTA operations. 

With looming fiscal difficulties but growing demand on the transportation system, there may be significant debate about the overall funding level, the structure of the current transit program, its priorities, and the resulting distribution of federal support geographically and by transit mode. Three among many possible alternatives for restructuring federal public transit programs are outlined in this report: (1) focusing more resources on major capital expenses for rehabilitation and expansion of transit services; (2) supporting and rehabilitating existing services rather than major capital expansion; and (3) the elimination of capital improvement programs altogether to be replaced by a simple "block grant" that could be distributed based on transit ridership or population. Debate is likely to be particularly intense over the size and structure of the New Starts program that provides federal funding for expanding transit capacity and accounts for about 18% of total transit program funding. 

This report begins with a brief background on the characteristics of the transit sector and ridership trends. This is followed by a description of the current structure of the federal transit program. The next sections focus on potential reauthorization issues: the overall funding and structure of the transit program; the size and shape of the New Starts program including funding level, types of transit modes funded, project evaluation criteria, the share of local matching funds, and distribution of New Starts funding; issues with the Fixed Guideway Modernization program; distribution of federal funds to rural and small cities; and federal support for paratransit. 

Date of Report: February 23, 2010
Number of Pages: 23
Order Number: RL34171
Price: $29.95

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