Transit positioned for surface transportation reauthorization

Paul Skoutelas, CEO and president, APTA
"The tradition has for decades been a transportation bill that is highways, bridges, and public transportation," said Paul Skoutelas, president and CEO of the American Public Transit Association. "Our expectation is that's what it will be. All the modes will be part of the next bill." 
APTA

While the House Transportation and Infrastructure Committee stresses its commitment to deliver a traditional highway bill before a Sept. 30 deadline, public transit advocates are protecting their own interests. 

Processing Content

"The tradition has for decades been a transportation bill that is highways, bridges, and public transportation," said Paul Skoutelas, president and CEO of the American Public Transit Association. 

"Our expectation is that's what it will be. All the modes will be part of the next bill." 

APTA has declared its financial goals to Congress by asking for $138 billion for public transit and $130 billion for passenger rail over the next five years.     

Last week, Chairman Sam Graves revealed the House Transportation and Infrastructure Committee is leaning into a $550 billion highway bill along with a "robust transit component and a rail title as well." 

APTA is making its case by rolling out out a study showing that "every $1 billion invested in public transportation generates $5 billion in long-term economic value and supports tens of thousands of jobs."

The transit sector often relies on bond sales to finance major capital improvement projects. 

APTA estimates there's a $150 billion backlog of needed maintenance to bring the country's transit systems into a state of good repair.   

The study includes recommendations for expanding the use of private activity bonds, which are tax-exempt munis issued by government agencies on behalf of private entities to finance projects with public benefits. 

"For private activity bonds, there is a separate cap on how much can be used of $30 billion for surface transportation," said Ward McCarragher, vice president of government affairs for APTA. 

"Over the last years we've hit that cap so there's no funding available. One of APTA's recommendations is to increase that cap to $45 billion for purposes of this next bill." 

APTA would also like to be able to use PABs for things beyond construction costs including buying rolling stock. 

They are advocating for removing mass-commuting facilities from being subject to the PABS volume cap which would put them on equal footing with airports, docks, and wharves. 

APTA also wants to change a requirement that restricts PABs usage for high-speed intercity passenger rail facilities.

They want to change the rule to include trains capable of traveling of 110 miles per hour from the current restriction of 150 miles per hour. 

Fitch Ratings, S&P Global Ratings, and Moody's Ratings all currently have the transit sector pegged with stable outlooks. 

The American Society of Civil Engineers gave the transit sector a D-grade on its 2025 Infrastructure Report Card. 

Low ridership during the COVID-19 pandemic reduced farebox revenue, which the sector is still trying to recover from.

"By 2023, transit ridership only increased to 73% of pre-pandemic levels," said the ASCE "Both federal pandemic aid and infrastructure investment were pivotal in maintaining transit services." 

Public transit got a $108 billion shot in the arm from the Bipartisan Infrastructure Act, but that money runs out Sept. 30.

Many of the large transit systems including Washington D.C.'s Metrorail and New York's Metropolitan Transportation Authority have been staging a comeback. 

"While ridership hasn't fully come back, we have seen double digit growth year over year since the pandemic, and we continue to see that trend growing," said Leanne Redden, executive director of the Regional Transportation Authority in Chicago. 

The Trump administration has made a habit of feuding with transit agencies over safety concerns. It unsuccessfully went to court to challenge New York's right to install a congestion pricing system that funnels money into the MTA.  

In November, the transit sector responded to a leaked White House memo floating the idea of killing off the funding stream flowing from the Highway Trust Fund to transit projects.

"We get paid to worry, that's our job," said Skoutelas. "Our job is to fight for as much resource in transit as we possibly can."

"From our discussions in Congress and within the administration, we believe we're on good footing. But we never take anything for granted." 

For reprint and licensing requests for this article, click here.
Politics and policy Infrastructure Washington DC Private activity bonds Trump administration Attorneys
MORE FROM BOND BUYER