U.S. Senate Getting Serious About Transit Stimulus

trans_wsj_1.gifThe Wall Street Journal reports that momentum is building in the Senate for additional federal transit funding:

The Senate banking committee will hold a hearing
Tuesday to examine how the government can strengthen mass-transit
options as a way to reduce dependence on imported oil. Meanwhile, House
and Senate leaders debating a new energy bill are considering a range
of incentives and new funding for transit agencies.

On Monday, a spokesman for Senate Majority Leader
Harry Reid (D., Nev.) said a measure that would provide as much as $2
billion in grants and other funding for public transportation appears
likely to be included in energy legislation that could be voted on next
week. The House has already approved a bill that would provide an
additional $1.7 billion to transit agencies over two years. If Congress
fails to pass a new energy package this month before adjourning for its
election-season recess, a transit-funding boost could still be included
in an end-of-session budget resolution.

In other words, it seems there’s a good chance that parts of the Saving Energy Through Public Transportation Act will be folded into a broader energy bill. The version that passed the House this June included $237 million for New York City. Nationally, the funding in the bill would help local transit agencies handle the double whammy of increased ridership and rising fuel costs. The Journal points to a new survey from the American Public Transit Association [pdf] highlighting the need for federal support:

According to a survey of 115 transit agencies being released Tuesday by
APTA, more than 60% of mass-transit systems are considering fare
increases and 35% are considering service cuts. Both findings reflect
the cost pressures from energy prices that are making it hard for
transit officials to maintain service levels at a time when demand is
surging.

In a press release, APTA also revealed that the number of transit trips in 2007 — 10.3 billion — reached a 50-year high, noting that vehicle miles traveled declined by 3.3 percent in the second quarter of this year as transit use ramped up.

If you’d like to communicate your support for transit funding to members of the Senate banking committee, here’s the list of everyone who sits on it.

Graphic: Wall Street Journal

  • Larry Littlefield

    No one from New York of Illinois.

  • Niccolo Machiavelli

    With the conspicuous exception of Schumer Larry?

  • Larry Littlefield

    Ahh, I missed him.

    Good thing they are talking about $2 billion for transit, because they are almost certain to propose $50 billion in subsidies for the auto industry.

    http://www.bloomberg.com/apps/news?pid=20601087&sid=aW2XCiHM9KnQ&refer=home

    Paid for by the New York area, where the automakers have long-since closed all their plants.

  • Larry Littlefield

    Not to mention $200 billion for Fannie and Freddie, probably that much again for bank and Wall Street bailouts. Just numbers that don’t matter? That’s the reason they can get away with doing it.

  • Larry Littlefield

    And to put that $237 million for NY in further perspective, read this.

    http://www.bloomberg.com/apps/news?pid=20601109&sid=aEwSqEjHpqUs&refer=home

    New York borrowed billions of dollars at variable rates that allowed lower costs (more money to hand out) up front but exploding costs in a future our politicians don’t care about. That future has arrived.

    “The state had $4 billion in debt with interest rates, set in periodic auctions, that soared as high as 14.2 percent after bidders vanished in February. That was more than triple the January average. The cost to taxpayers rose even more when the state’s first option, replacing auction-rate debt with variable- rate bonds, wasn’t available for the full amount.”

    The state (including the MTA) is trying to refinance into higher fixed rates before it goes bankrupt. Wall Street is charging them a second time for the new debt. Losses so far: $340 million, and it’s just getting started.

    “The first auction-rate bonds to be replaced, for $3.45 million in fees, were those issued by the Tobacco Settlement Finance Corp. It was the only state-backed borrower whose debt specified a 15 percent rate if auctions didn’t attract buyers. Failed auctions of other issues were pegged to market rates and never exceeded 6.27 percent.”

    That is, the state has already spent all future Tobacco Settlement revenues, borrowing against them. We are probably now paying more on those bonds than the revenues.

    The’ve sold our future to multiple buyers, all of whom want to be paid.

  • Chris H

    Larry,

    Are you opposed to level of borrowing or the use of borrowing in general. If its the former, then I agree with you and lay the blame almost entirely at the feet of politicians for failing to fund the MTA adequately. If the latter, I believe that you are ignoring the economic benefits of completing a project earlier and therefore receiving the benefits for the years that a project would have otherwise been deferred.

  • Larry Littlefield

    “Are you opposed to level of borrowing or the use of borrowing in general.”

    I am opposed to the level of borrowing and what it has been used for.

    Borrowing is appropriate for new facilities that will provide benefits for additional people.

    Borrowing is not appropriate for the ongoing maintenance and normal replacement for existing facilties, leaving future generations to both pay back the debt and pay for future maintenance and normal replacement.

    In reality they will not be able to do both, and maintenance and normal replacement will stop, because debt has priority. And we’ll certainly be unable to pay for the promised new facilities.

    We have passed three bond issues for the Second Avenue Subway, in the 1950s, late 1960s, and late 1990s. Where is it?

  • Robert Polson

    Hillary Clinton introduced the Saving Energy Through Transportation Act (S. 3380) in the Senate. She also testified at the Senate Banking Committee hearing yesterday on the importance of mass transit and the need to increase funding for transit. New York is well represented in the Senate on this issue, at least by Hillary Clinton.

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