As Minneapolis Joins NACTO, Oberstar Backs Shift on Transit Operating Aid

At an event in Minneapolis today, House transportation committee chairman Jim Oberstar (D-MN) announced his support for giving urban transit agencies more flexibility to spend federal transportation formula money on operating -- a change in the current law that has already won the backing of Transportation Secretary Ray LaHood but has split the transit industry.

Oberstar (center) joined New York City transport chief Janette Sadik-Khan (right) at today's event. (Photo: B.Clements, Finance & Commerce)

Oberstar appeared at an event marking Minneapolis' move to join the National Association of City Transportation Officials (NACTO), founded 14 years ago by then-New York City Transportation Commissioner Elliot Sander to counterbalance the influence of state DOTs' voice in D.C., the American Association of State Highway and Transportation Officials.

Oberstar's specific remarks on transit operating aid were unavailable as of press time. But transport committee spokesman Jim Berard said the Minnesotan supported "in principle" the concept of allowing transit agencies from areas with populations greater than 200,000 to use their federal transportation formula grants on operating expenses.

Under current law, urban transit agencies are restricted to spending federal formula money on capital expenses, such as purchasing new rail cars or laying track for an expanded line.

Congress agreed last year to give transit officials the freedom to redirect 10 percent of their federal stimulus aid to operating budgets, underscoring that the change was a temporary response to the recession.

The American Public Transportation Association (APTA), the transit industry's chief lobbying group for more than a century, has opposed the use of formula grants for transit operating, preferring that already-scarce highway trust fund dollars be reserved for capital spending on rail and buses. APTA did not return a request for comment by press time on the growing support for changing the existing rules governing transit operating funds.

It's worth noting that the change Oberstar and LaHood have endorsed would not come until lawmakers take up a new long-term federal transportation bill, which may not occur until next year. Also left undetermined is the share of formula funds that would be made available for transit operating costs if the proposal becomes law; legislation offered by Sen. Sherrod Brown (D-OH) and Rep. Russ Carnahan (D-MO) would okay the use of between 30 percent and one-half of federal formula grants.

(ed. note: The post above has been edited to clarify the distinction between capital and operating expenses.)