TMG Insights

1. Urban & Regional Planning 5. Government Relations

Uncertain Future for Transportation Funding

Who is going to pay for the next transportation reauthorization bill?  This was the big question posed at the APTA Expo 2011.  The Transportation Equity Act for the 21st Century authorized the Federal surface transportation programs for highways, highway safety, and transit for a six-year period that expired in 2003, and has since operated on short-term extensions.

 Bills in Congress

The APTA Conference featured congressional staff members sharing their predictions and insight on the form of the next re-authorization bill.  The last draft reauthorization bill provided for a 30% cut for transportation systems and infrastructure.  An APTA analysis found that this six-year bill would result in the loss of over 600,000 jobs and the elimination of over $17 billion of infrastructure projects.  Congressional staff are currently working on a new draft bill that will more closely reflect current funding levels.  The APTA speakers agreed that we should expect to see more formula and less discretionary funding, and more streamlining within the Department of Transportation.

Funding Sources Still Unknown

The APTA speakers shared no new solutions for finding the money but noted the importance of balance: living within our means while maintaining our infrastructure.  They agreed that a gas tax increase was not likely the solution because taxpayers do not see specific improvements for their increased tax dollars at the federal level.

However, House Transportation Committee Chair John Mica recently said the Republican leadership approved his proposal to look at other available funding mechanisms to fund the transportation bill.  The source of potential funding is still unknown, but Mica confirmed that a gas tax increase is off of the table.

Our thoughts?

Transit historically gets short changed in transportation funding, and while we don’t anticipate that to change any time soon, a new found interest in transit from the current administration has sparked new money for capital projects around the country through the TIGER program and other ARRA funding.

Transit agencies are considering all the options for alternative funding sources from fare increases to local taxes, but before asking for more money, it is important to review the product that is offered. Transit Agencies need to assess, system wide, the services they are offering and position federal funds in a way that creates a better product overall. With a solid system in place that meets the needs of those it serves and is supported by the community, the Agency will be poised for success in seeking funds from local sources.

Contributed by:

Tiffany Peperone Pitre, Public Policy Analyst

Bonnie Garrigan, Senior Analyst of Economics

The views, interpretations, or strategies expressed are those of the authors, and do not necessarily reflect the position of TMG Consulting. This site is meant for educational purposes only and does not constitute professional advice. TMG Consulting makes no representation as to accuracy, completeness, or suitability of any information on this site and will not be liable for damages arising from its display or use.

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