Obama Stimulus Leaves Bus Riders By the Side of The Road

who_rides_bus_1.gifWho rides the bus? Data source: American Public Transportation Association

The House version of President Obama’s stimulus plan has left bus riders with nothing to look forward to but stiff fare hikes and painful service cuts. Bus systems got zero in immediate operating support from the bill that passed yesterday — stunning neglect compared to the $150 billion in educational "operating assistance" to local schools and universities and $127 billion in emergency health care "operating assistance" to state Medicaid and private insurance programs. A relatively puny request for $2 billion in transit operating support was shot down before even reaching committee.

Buses carry 59 percent of American transit riders and are the core of transit service in both urban and small town settings. But according to the New York Times:

Fifty-one
transit systems have recently proposed service cuts or fare increases… (which) make it harder for people to get to work (or look for work),
and they will undermine one of the long-term goals of the stimulus package:
laying the groundwork for a greener economy.

The burden of these transit cuts falls disproportionately on African Americans, who comprise 38 percent of all bus riders in the country, compared to 12 percent of the overall population. (There’s a reason that Rosa Parks acted for her civil rights on a bus.)

Unfortunately, the Obama administration and the House of Representatives have largely forsaken bus riders. It is now up to the Senate to provide emergency transit operating help to sustain service and reduce fare hikes. Otherwise, Americans will watch billions of stimulus dollars rain down on schools and hospitals while major transit systems teeter on the edge of insolvency, green collar jobs are cut, and energy-conserving transit riders are forced into cars.

There are a number of reasons why bus riders have lost out so badly in the struggle for stimulus help. One is that they have no effective lobby in Washington. This is partly the result of conventional thinking that hasn’t caught up to the current crisis. Transit agencies and advocates tend to equate "transit" with "infrastructure" or capital expenditures, so the federal government is not expected to help with operating expenses. This formulation is generally biased against buses, which are cheap to buy but relatively costly to operate.

The "transit=capital" formula also ended up hurting overall transit aid because Obama fiscal czar Larry Summers believes that transit projects take too long to get underway, and are not a good way to inject money quickly into a depressed economy. Unlike local schools, whose teachers’ unions made a strong case for an unprecedented infusion of $150 billion in federal operating help, transit agencies and their supporters have kept fighting for more capital aid and have not pressed their elected officials for the emergency operating help needed to bail out the nation’s floundering bus and transit systems. This must change. The same arguments for emergency help to schools apply to bus service.

The failure of the stimulus to help bus riders will have big implications for the working class and poor Americans hardest hit by the recession: Bus riders will be spending more for less service, while green collar transit workers will face rounds of layoffs. It’s bad public policy, bad urban policy and inequitable social policy. Not what bus riders were hoping for when they voted for Obama.

  • This formulation is generally biased against buses, which are cheap to buy but relatively costly to operate.

    And that is another reason why BRT is not “just like rail but cheaper.”

  • Larry Littlefield

    “Bus systems got zero in immediate operating support from the bill that passed yesterday — stunning neglect compared to the $150 billion in educational “operating assistance” to local schools and universities and $127 billion in emergency health care ‘operating assistance’ to state Medicaid and private insurance programs.”

    Look at the bright side.

    People move from state to state, that means more generous states can attract poor and sick people seeking services while less generous states can save money by shifting people elsewhere, which happens in Medicaid big time on our dime.

    And businesses and rich, while needing an educated workforce overall, tend to oppose investments in education locally? Why? You can always attract educated workers from elsewhere if your schools stink (a factor that has kept NYC’s economy alive).

    There is a strong case to be make for having the federal government take over unemployment insurance as well, since a geographically concentrated recession can devestate a state’s trust fund and some irresponsible states (ahem) tend not to fund trust funds properly to begin with.

    So a shift to federal funding for services direct to people is a good thing, in my view.

    On the other hand, transportation, other infrastructure, housing, parks, etc. tends NOT to move. The benefits are local, and so is the incentive to invest. The fact that my priorities in these categories are not shared by many elsewhere in the country is a good reason NOT to throw the money in a federal pot and then have to beg for some back.

    Money saved by having the federal government pick up Medicaid can be used for buses.

  • If it isn’t too late to do something, let us know if we should still be calling our representatives and senators.

  • JK

    Larry, for someone who spends lots of time bemoaning irrationally high public pensions you sure are letting Medicaid off easy. The NY Times reported last year that in NY, up to 40 percent, or $18 billion per year, of Medicaid claims are questionable. Dumping no strings attached federal block grants into NY’s Medicaid black hole isn’t going to mean more money for transit — it never has.

  • Larry Littlefield

    “The NY Times reported last year that in NY, up to 40 percent, or $18 billion per year, of Medicaid claims are questionable.”

    Ditching Medicaid and having a choice of Medicare or an equal amount (adjusted for age and condition) of federal funding for private insurance would solve that problem, by taking the decisions out of NY state lobbyists and legislators’ greedy hands.

    That’s why Local 1199 fought universal health care under Clinton.

    If the federal government picked up that cost (and retiree health care), I’d gladly see the city left to fund transit on its own.

    Unfortunately, Governing Magazine has already called my idea of preventing the collapse of public services by having the Feds pick up the retirees a “fantasy.”

    http://www.governing.com/articles/0901gmillere.htm

    I say the idea that we will have public services otherwise is a fantasy.

  • The “transit=capital formula” is embedded in Congressional thinking for two reasons. First, historically, the division of responsibility in federal transportation policy has been for the federal government to contribute to capital transit investments with the locals responsible for operating expenses. Second, when counter-cyclical stimulus packages are considered during recessions, it has been customary that funds be focused on creating new public works jobs — like filling potholes — not keeping existing workers employed — like driving a bus.

    To change this engrained Congressional thinking when the bill comes up in the Senate will require addressing both of these issues head-on.

  • This article is a load of hooey! Your ignorance of the transit program is appalling.

    With the amendment adding $1.5 billion to formula capital grants, known as FTA Section 5307, the total amount available to buses is about $7.5 billion, which is more than double the amount that currently flows to about 99% buses through the FTA Section 5307 program. As far as I can tell from the stimulus legislation, there are actually few restrictions on using some of the new money on operations, but you need to understand exactly what the rules are.

    There are two ways that operating funds can be obtained from Section 5307.

    (1) For bus systems serving urbanized areas of less than 200,000 people (defined by the U.S. Census in 2000), up to 50% of the net transit operating deficit can be funded from Section 5307. In a lot of cases, bus systems in these areas don’t have enough 5307 funding from the formulas to cover this, and still finance also necessary vehicle replacements and other capital needs. Now they will have substantially more funding for both operations and capital, assuming the stimulus gets through the Senate intact.

    (2) For bus systems serving urbanized areas over 200,000 population, Section 5307 formula funding can be used for “preventative maintenance” of vehicles and facilities. How much this actually is depends on how each region’s Metropolitan Planning Agencies (MPOs) have set policies. I do know that the MPO in the San Francisco Bay Area, has historically frowned on using larger percentages of FTA Section 5307 funding on preventative maintenance, leading to major operating budget crunches for our large urban bus operations, e.g., AC Transit, San Francisco Muni, Samtrans, and Santa Clara’s VTA, as well as a number of smaller systems. Hopefully the infusion of new money will correct this MTC shortsightedness.

  • MTC is the Metropolitan Transportation Commission, bunkered in Oakland. http://www.mtc.ca.gov

  • Niccolo Machiavelli

    Not that most of Keith’s pitch is useless but…”First, historically, the division of responsibility in federal transportation policy has been for the federal government to contribute to capital transit investments with the locals responsible for operating expenses.” Can really only be true if history began about fifteen years ago.

  • patrick kelly

    Teamsters local 952 in orange ca is holding a rally and press conference in Santa Ana at the Reagan federal building on Friday the 30th at 2:00pm to bring pressure on Obama and the US Senate to fund transit operations in the stimulus package. The Senate will probably vote Monday so the time to blitz is now! More info is on our website at http://www.teamsters952.org.

  • John Kaehny

    Michael thanks for your comments. We stand by the point of the article, which is that the Obama stimulus plan does not provide for bus operating funding. We are aware of the stimulus money dedicated to Sec 5307 formula funds. Please look a little closer at Sec 5307 restrictions

    “For urbanized areas with populations of 200,000 or more, operating assistance is not an eligible expense.”

    http://www.fta.dot.gov/funding/grants/grants_financing_3561.html

    Since the vast majority of bus service is provided in urban areas — as defined by the census, usually an MPO or TMA, this amounts to no operating assistance for all but a handful of bus riders, those lucky few in small towns and rural areas.

  • John Kaehny

    Keith, you’re absolutely right about congressional thinking, which is why the article twice mentions the $150 billion for local school aid in the stimulus, an unprecedented federal intervention into a local service. Other past examples for congress to heed would be the federal block grants for local policing, or the history of federal operating aid for transit during the 1970’s and 1980’s. From a stimulus perspective, operating aid makes far more sense than capital projects since it allows transit passengers to spend for services other than transit. Having the public spend more for transit and get less is exactly the “contraction” the stimulus is supposed to address.

  • Moser

    Nick is right though – the elimination of federal transit operating support for bigger systems is a creature of the Newt Gingrich era and thereafter.

    Rep. DeFazio’s complaint that the authors of the stimulus were over-consulting the outgoing Bush USDOT crew bears keeping in mind in this regard.

  • John, My point was that those who want to change Congress’s engrained thinking need to address these issues directly. The point needs to be made more sharply that federal aid to local transit agencies — particularly for operating assistance — is an important form of aid to fiscally-strapped local governments. There is a broad consensus that such aid is necessary, but in the context of transit the issue isn’t defined that way, but rather as “transportation” or “stimulus,” both of which limit how Congress thinks about it.

  • Niccolo, It’s not that history began 15 years ago. It’s that unless forced to do otherwise, Congress will consider some policy issues settled.

  • patrick kelly

    Concerned transit workers and users need to reach out to their US senators and Barack to push for operations funding as part of the stimulus package. The service cuts in OC will be approximately 40 million over 2 years and 150 million in LA.Hiring freezes are in effect and service cuts are in our face. This is a stupid mistake by the administration and needs Barack’s attention!
    Remember : Transit is Green!

  • Thanks for posting that chart “Who rides the bus?”, which I added to my Examiner.com piece, “Bus riders at the back of the stimulus bus,” http://tinyurl.com/lx6sp4

    I hadn’t noticed Streets Blog before looking into this, but it’s a great publication.

    Urban planning, energy, racial and social justice, and war’n peace issues are embeedded in every transportation decision made all over the country.

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