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December 2012
— by Julie Sneider, assistant editor
For many of the nation's transit agency leaders, the year 2013 will be spent wielding a double-edged sword.
Although gratified that the public used rail and bus transit systems in record numbers in 2012, they know they'll spend the coming year trying to meet the growing demand for service while also managing their systems' capacity, performance, expansion and state-of-good-repair issues during an era of tight budgets and limited revenue streams.
The execs also are gratified that Congress finally passed in late June a new surface transportation funding law, Moving Ahead for Progress in the 21st Century (MAP-21), after years of passing short-term program extensions under the old law. But, they are well aware that the legislation will be their roadmap for only two years.
MAP-21 will fund surface transportation programs at $105 billion for fiscal years 2013 and 2014, including $10.6 billion in FY2013 and $10.7 billion in FY2014 for public transportation. The legislation is designed to improve transit safety, state of good repair, performance and efficiency. It gives the Federal Transit Administration (FTA) a significant new authority to establish safety standards for transit agencies; emphasizes replacing and restoring aging transportation infrastructure by setting up a needs-based program and new asset management requirements; and creates performance-based planning requirements.
MAP-21 is the first major, long-term surface transportation authorization enacted since Congress passed the SAFETEA-LU legislation in 2005. Although MAP-21 is a two-year funding bill rather than the six-year measure public transportation advocates had pushed for, transit industry leaders were relieved to have at least a two-year period of funding certainty.
In 2013, the law's rollout, rulemaking process and potential impact will be a major focus of attention in the industry, transit-rail constituents say.
"The new law is transformative in many ways," says Michael Melaniphy, president and chief executive officer of the American Public Transportation Association (APTA). "In the bigger picture, there are well in excess of 150 deadlines that the administration has to try to achieve to roll out the new regulations and interpretations, and we expect they will be doing that over the full term of the bill."
As rulemaking for MAP-21 evolves, it will be important for APTA's public and private sector members to stay informed of the process and provide feedback on the potential impact to transit agencies and businesses, says Melaniphy.
"The FTA has a huge task ahead of them. We have to be part of that dialogue and we have to do it in a way that doesn't slow down the regulatory process," he says.
For now, that means MAP-21's direct impact on transit agencies won't be entirely understood until those rules and regulations are written.
"The old saying, 'the devil is in the details,' really applies to MAP-21," says Brian Lamb, general manager of Metro Transit in Minneapolis/St. Paul.
Transit agency leaders also are mindful that projects in the pipeline now will mature after MAP-21 expires, Lamb says.
For instance, Metro Transit is in the heavy construction phase of the Central Corridor light-rail project, or Green Line. When completed, the 11-mile line will serve 18 stations and connect downtown Minneapolis with downtown St. Paul. The Green Line isn't scheduled to open until mid-2014, but Metro Transit already is starting the preliminary engineering process for a Green Line extension to the Twin Cities' southwest suburbs — a service Lamb hopes can be up and running by 2018.
"So for us, it's not only a matter of trying to figure out what MAP-21 sets in motion, it's also thinking ahead to the next authorization as to how to position ourselves" in terms of future funding, he says. "We have more questions than answers at this juncture."
Despite the unknowns, Lamb and other transit agency leaders say they're pleased that the current Congress, which has been bitterly divided along partisan lines on many issues, was able to reach a compromise on transportation legislation. MAP-21 will provide some stability to transit agencies and the private-sector businesses that work with them.
"Having a two-year bill provides more certainty than the short-term extensions [of the SAFETEA-LU law] provided, and we think that is important," says Dick Ruddell, president of the Fort Worth Transportation Authority (The T). "While the funding level isn't as high as hoped, the bill provided a good base to continue federal support for public transportation. We're planning on using the formulas that are now in MAP-21 — more of the funding is distributed by formulas — and that will be useful in providing certainty for capital needs."
Southeastern Pennsylvania Transportation Authority (SEPTA) General Manager Joseph Casey concurs. In particular, Casey praises the big boost to the FTA's State-of-Good-Repair Program and expansion of the Transportation Infrastructure Finance and Innovation Act (TIFIA) program.
In fact, MAP-21 will turn TIFIA into the "largest transportation infrastructure loan program in history, making available up to $17 billion in credit assistance for critical infrastructure projects," as described by U.S. Transportation Secretary Ray LaHood in his "Fastlane" blog posted online Sept. 27.
"There are a whole lot of positives for transit agencies in that bill," Casey says.
And, he hopes transportation infrastructure investment will be a priority in 2013 at the state level, as well.
"We need a transportation funding package out of Harrisburg for the entire state, not only for mass transit but also for highways," he says. "We have an extremely old system. Quite frankly, a lot of the bridges that we are responsible for and the power substations are well past a useful life, and we don't have the financial resources to make headway in that area."
At the same time some agencies are scraping together the funding necessary to fix aging infrastructure, they also are facing the need to accommodate what SEPTA and many other U.S. transit agencies experienced over the past year: record numbers of riders. Along those lines, MAP-21 will help some agencies address the need for expanded service. The law modifies FTA's New Starts and Small Starts programs, allowing — for the first time — major transit agencies to apply for capital investment grants to fund projects that expand the agencies' core capacity.
That new provision's inclusion in MAP-21, along with the increased state-of-good-repair program funding, was welcome news at the Chicago Transit Authority (CTA), where ridership growth was higher than nearly every other major urban area's U.S. transit system during the first half of 2012, according to the agency. CTA's rail ridership increase was especially high at 6.2 percent.
"We liked MAP-21 for the main reason that it … increased funding for rail programs," says Mike McLaughlin, vice president of planning and federal affairs. "We are a rail and a bus system, but rail is much more capital intensive. And at any old rail system — if you talk to New York, San Francisco, Boston, Philly or even cities like D.C., where the rail system is now 40 years old — it takes a lot of money to maintain and improve the system."
CTA was among the transit agencies that advocated for modifying the New Starts provision to include the core capacity factor.
"We are over capacity. The demand for rail service is greater than what we can currently put out there," says McLaughlin. "So, we would like to expand our some of our service, meaning we would like to put more trains on the lines and that could mean more electricity, more signalization and straightening out some [rail] curves."
Whether they're building brand-new systems or expanding the core capacity of existing systems, government investment through measures such MAP-21 will help restore economic vitality, transit industry officials say.
"For each dollar that is invested in public transit, we see 36,000 jobs created or sustained in this industry," says APTA's Melaniphy. "The majority of federal funding goes toward capital projects, and what that results in is 76 percent of the federal funding that goes to public agencies for transit flows directly to the private sector."
The transit industry is "well positioned to be a key component" of the nation's continuing economic recovery in 2013, Melaniphy believes.
"Through the first half of [2012], we've had tremendous ridership growth, outpacing even last year's numbers — which were the second highest annualized since 1957," he says. " So, people absolutely are using public transportation to get back to work. And as we look at the economy coming back stronger — and our agencies are able to stabilize their systems and not implement cuts in services or fare increases — we think the role that transit will have [in the recovery] is going to be even more significant."
Melaniphy anticipates transit ridership will continue its upward trend in 2013, which means public transportation investment will become even more critical going forward.
One of MAP-21's shortfalls is that it does not address the long-term financial challenge of how to fund public transportation, he says. The federal gas tax hasn't been increased in 20 years and continues to generate less revenue as people drive less and cars become more fuel-efficient.
As Congress considers measures to deal with the national debt, it also should begin discussing long-term funding solutions for the nation's transportation infrastructure needs, Melaniphy believes.
And even as federal officials prepare the policy specifics of MAP-21's implementation, talks already are under way on Capitol Hill about the next long-term surface transportation authorization bill, one that transit industry officials say they hope will be at least six years in length.
"When you talk about subway lines, light-rail lines, commuter-rail lines — those are big projects that take years to complete," Melaniphy says. "If you want to have the expertise and the equipment and the investment needed to make those things happen, we need a long-term bill."
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