A Smart Way for the Feds to Fund Transit Service

After yesterday’s post on the campaign to increase federal funding for transit service, some readers expressed concern that the proposal on the table would let metro areas avoid paying for their own transit operations. The way things stand, big transit agencies can’t spend federal cash to run their trains and buses. If they could, the thinking goes, what’s to keep local governments from reducing the share they chip in?

Well, I neglected to mention that the bill in question, H.R. 2746, includes a good mechanism to prevent that from happening. In fact, it provides an excellent incentive for metro areas to bump up their dedicated transit funding.

Basically, Rep. Russ Carnahan’s bill would allow a transit agency to spend more of its federal money on operations only if that agency receives more local revenue too (not counting farebox revenue). Making federal support for transit service contingent on a local match is a great incentive to push local transit policies in a better direction. And lots of American cities really need that push.

Consider: In New York, we have the biggest constituency for transit of any metro area in the nation, and this April we could barely muster enough votes in our state legislature to avoid crippling service cuts. Transit riders in other parts of the country aren’t so lucky. In St. Louis, which Carnahan represents, voters turned down a referendum in November that would have increased transit funding with a half cent sales tax. Now, St. Louis transit riders are suffering through some of the worst service cuts in the nation.

It’s true that the Carnahan bill is not a cure-all. It doesn’t enlarge the feds’ total pot of money for transit, so the more federal cash transit agencies spend on service, the less they will have available to spend on expanding and maintaining their systems. But without the greater flexibility provided by the Carnahan bill, and without the local incentives it includes, it seems like many transit agencies will be left to ponder the question: Why buy more trains and buses if we can’t afford to run them?

  • Larry Littlefield

    That’s the argument many have against building any new transit systems, or even maintaining the ones we have. They cost too much to operate, given debt service and pensions.

    In addition to the Republicans, Alice Rivlin of the Clinton Administration also argued against additional capital investment in mass transit, particularly light rail.

  • Larry Littlefield

    And by the way, if 30% for operations is smart, how about 100% for operations? If I were an enemy of mass transit, and couldn’t care less about the future or the environment, I’d be pushing that right now!

  • I am dubious. Yes, it will get more local funds for operations to match the federal funds for operations. But localities currently generate local funds for capital projects to get federal funding for them. Won’t localities just shift their local funds from capital to operating funding, in order to get more federal operating funding?

    Because of local political pressures, I expect that transit fares won’t even keep up with inflation in many cities, as politicians please pressure groups by subsidizing operations at the expense of capital projects.

    I still think the most important point about this bill is that you get more federal funds for operations only if you reduce federal funds available for capital projects.

    In my opinion, to deal successfully with global warming, we need to build enough transit and enough transit-oriented development to transform our cities as dramatically during the next half century as we did during the second half of the twentieth century. That won’t happen if we reduce funding for transit capital projects by 30%, as this bill will do.

    I think this bill plays into our very destructive tendency to indulge ourselves in the present at the expense of the future. We do this by borrowing too much and saving too little; we do it by running up big federal budget deficits that our children will have to pay off; we do it by burning fossil fuels and ignoring the global warming that our children will have to face. Now you propose that we should also do it by getting lower transit fares for ourselves instead of building better transit systems and a more livable world for our children.

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