Atlantic Cities

Why Are States Passing Up Billions in Federal Transit Funds?

Why Are States Passing Up Billions in Federal Transit Funds?
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Money for mass transit is hard to come by, so you'd think when the federal government offers some, states and localities would jump at the chance. A few do, but most don't, according to a GAO report released earlier this month [PDF]. Of the $53 billion in "flexible" transportation funding issued from 2007 to 2011, only about $5 billion was used for urban public transit.

Federal funding for public transportation generally comes from the mass transit account of the rapidly depleting Highway Trust Fund. Since 1991, however, state and metropolitan planners have had the option of shifting some federal money intended for highways into transit projects. These "flexible" funds arrive through the Federal Highway Administration via two main sources: the Surface Transportation Program and the Congestion Mitigation and Air Quality Improvement Program.

The $53 billion in flexible funding issued by the highway administration over the past five years represents about 29 percent of all federal highway aid, according to the new G.A.O. report. Just four states accounted for more than half of the $5.7 billion transferred from highway to transit projects during this time. California flexed about $1.27 billion, New York $632 million, New Jersey $735 million, and Virginia $411 million.*

Even adjusting for available funding, few states took advantage of the transit money. Only four states (Oregon, Vermont, New Jersey, and Virginia) flexed more than 25 percent of their eligible funds to transit projects during this time. Sixteen states flexed less than 2 percent, with seven states (Arkansas, Delaware, Hawaii, Mississippi, North Dakota, South Dakota, Wyoming) flexing none at all:

It should come as no surprise that flexible transit funding helps cities almost exclusively. Metro areas with populations exceeding a million received about 77 percent of the recently flexed funds, according to the new report, and all but 3 percent went to urban areas with at least 50,000 people. The money is typically used to fund capital projects (mostly vehicle purchases, or construction, or financing), though it can also go toward operational costs on occasion.

A few examples of flex-funded projects show the option's potential to advance public transit. Harrisburg, Pennsylvania, upgraded its bus fleet. The BART system in San Francisco replaced 40-year-old rail cars. Burlington, Vermont, created three new commuter bus routes and expanded intercity service to Montpelier. Portland, Oregon, paid down debt on bonds that fund transit projects. Pittsburgh installed bike racks on buses. Cities can also use the money to sustain operations during a budget crunch — as an alternative to service cuts or fare hikes, for instance.

The low usage rate represents a trend that goes back to the passage of the 1991 transportation law. From 1992 to 2006, a period covered by a previous GAO report, states only used about 13 percent of available flexible funding for transit, compared to the 10 percent since that time. Eligible money that isn't flexed stays with the highway administration "to be used mostly for other highway projects," writes the GAO in its new review.

For the most part, a state's decision to flex or not to flex comes down to individual policy preferences. Officials from Arkansas, which flexed none of its recent funding, told the GAO they preferred most of the state's money for an interstate interchange. Planners from Little Rock said they haven't flexed any funding for about seven years because they've struggled to secure local funding to match. (Localities must match some of the money, often the 20 percent typically needed for federal highway projects.)

The approach used by Arkansas stands in contrast to that of other states. Vermont officials there told the GAO they use their CMAQ money on transit because state policy emphasizes reduced traffic congestion and improved air quality. Caltrans, the transportation agency in California, uses flexible funds because the state's gas tax doesn't cover transit projects. Pennsylvania's transportation department automatically sets aside $25 million in flexible funding each year, primarily for projects in Philadelphia and Pittsburgh. Oregon does something similar.

The underlying point, emphasized by Tanya Snyder at Streetsblog in her coverage of the new report, is that states can decide to allocate more money to transit "without any changes to national transportation law." That's a great option, especially in fiscal times as tight as these. Unfortunately for many cities right now, it's also an overlooked one.

* The funding table presented by the G.A.O. (p. 11) says it includes stimulus money in the state totals, however a look at the charted bars for New York and New Jersey suggests otherwise: New York's bar is out ahead if you include recovery money, but it's total is below Jersey's.

Top image: pio3 /Shutterstock

Eric Jaffe is a contributing writer to The Atlantic Cities and the author of A Curious Madness (2014) and The King's Best Highway (2010). He lives in New York. All posts »

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