Policymakers should allocate 25% of all federal transportation funding to competitive programs across all modes of travel as they consider overhauling federal laws, according to a recent report by the nonprofit Bipartisan Policy Center’s National Transportation Policy Project.
The paper, written by Donald Emerson and Jeffrey Ensor of Parsons Brinckerhoff, a planning and engineering firm, focuses on the Federal Transit Administration’s New Starts program. It found that despite the long application and approval process, some of its elements are worth pursuing in future legislation, such as a comprehensive evaluation process, involvement by executive and legislative branches, and incentives for local matching funds.
One area of intense criticism within the transit community was recently changed by Transportation Secretary Ray LaHood. He announced last month that the agency would no longer focus on cost-effectiveness when selecting projects; instead, it would include factors like economic development, land use, and environmental benefits.
The New Starts program provides capital funds for new transit projects. It’s funded by congressional appropriations but projects must compete for approval by the FTA. Projects cost anywhere from tens of millions to several billions of dollars, according to the report. The program received $2 billion of federal funding in fiscal 2010.
The federal government provides up to 80% federal funding for selected projects, and states often raise their share of 20% or more by issuing bonds. Between 1999 and 2002, for example, New Starts funds leveraged more than $1.5 billion in capital market funding at very favorable ratings, A-plus to A-minus, according to the White House Office of Management and Budget.
In its annual report on funding recommendations for fiscal 2011, the FTA outlined some New Starts projects that include local bonds.
For the Long Island Rail Road East Side Access project, approved for New Starts, the FTA says it will pay about $2.63 billion. New York’s Metropolitan Transportation Authority will pay $3.2 billion out of its dedicated funding sources, including bonds, and $450 million that was authorized by the New York State Transportation Bond Act of 2005.
For the Second Avenue subway project in New York City, the FTA will pay $1.3 billion, and MTA will use $2.25 billion, partly from bond issuance.
For the Dulles Corridor Metrorail Project in northern Virginia, the FTA has committed $900 million to match $1.47 billion of Dulles Toll Road revenues and bond proceeds.
And for the University Link light-rail extension in Seattle, the FTA has promised a funding share of $813 million. The Central Puget Sound Regional Transit Authority’s share of $1.12 billion will come partly from bond proceeds.
One element of the New Starts program — shared decision-making between branches of federal government — contributes to its lengthy grant-application process, according to the report. However, that is also one of the praiseworthy elements, it said. New Starts grant winners are recommended by the U.S. DOT based on several criteria, then Congress makes the final funding decisions.
The report also said competitive programs should be mode neutral, instead of fixating on certain kinds of mass transit projects and “a few” corridor-based bus programs.
