Public transportation systems receive $25 billion as part of coronavirus bill
The Federal Transit Administration is allocating $25 billion to public transportation systems following a heavy blow to transit revenues due to the pandemic.
U.S. Transportation Secretary Elaine Chao made that announcement Thursday. Funding will be provided through the Coronavirus Aid, Relief, and Economic Security Act, which was passed March 27.
“This historic $25 billion in grant funding will ensure our nation’s public transportation systems can continue to provide services to the millions of Americans who depend on them,” Chao said.
Urban areas will get $22.7 billion in formula funds and $2.2 billion will go to rural areas. Funding will be provided at a 100% federal share without requiring a local match. The funds will be available to support capital, operating and other expenses to help systems prevent, prepare and respond to COVID-19.
The New York City area will receive the most funding with $5.4 billion.
New York City’s Metropolitan Transportation Authority’s transportation revenue bonds are currently rated A- by S&P Global with a negative outlook. On March 25, the MTA filed a voluntary disclosure supplement that said the ongoing COVID-19 crisis has put a significant strain on their financial condition.
“Substantial declines in ridership and traffic in response to the COVID-19 pandemic have become more severe daily,” MTA said. “Deteriorating results at MTA bridges and tunnels crossings have become so severe that they merit highlighting in this supplement. There remains a high risk for further reductions in ridership and traffic.”
Transportation systems in Chicago will receive $1.4 billion in funding, and Los Angeles will receive $1.2 billion. Washington D.C. will receive $1.02 billion in funds.
“Metro anticipates that the CARES Act funding will cover expenses to ‘prevent, prepare for, and respond to COVID-19,’ including revenue loss,” a Washington Metropolitan Area Transit Authority spokesperson said in an email.
WMATA said they are in the process of reviewing the guidance to access the funding.
Many transit systems rely on fare box revenues. Fare revenues for WMATA, for example, make up 35% to 40% of its revenue.
Rural areas will also see some funding. Rural areas in Texas will get the biggest slice of the pie with over $143 million from the FTA.
The funding amount for each individual transit provider is a local decision, an FTA spokesperson said. By law, state governors generally through the state DOT, distribute FTA formula funds among recipients in rural and urban areas.
Operating expenses incurred beginning on Jan. 20, 2020 are also eligible to receive funding, FTA said.
“We know that many of our nation’s public transportation systems are facing extraordinary challenges and these funds will go a long way to assisting our transit industry partners in battling COVID-19,” said FTA Acting Administrator K. Jane Williams. “These federal funds will support operating assistance to transit agencies, including those in large urban areas as well as pay transit workers across the country not working because of the public health emergency.”