December 15, 2008
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Looking Back on an Eventful Year in Transportation and Policy
By Art Guzzetti
APTA Vice President, Policy
As the year 2008 nears its end, we look back on the ever-shifting set of policy, political, and economic forces that affected public transportation.
In Congress, for example, the emphasis of the national policy agenda shifted abruptly from climate to energy to the economy. Throughout, transit had a remarkable year, seeing record levels of ridership and high levels of voter approval in transit elections.
The year began with the release of the National Surface Transportation Policy and Revenue Study Commission’s report, Transportation for Tomorrow. It recommended a major boost in surface transportation funding, including a large increase in the federal motor fuels tax and a long-term transition to other financing mechanisms such as a tax on vehicle miles traveled (VMT), as well as a major consolidation and reorientation of surface transpiration programs and an emphasis on performance outcomes to determine investment decisions.
Other groups also saw the need for a new long-term vision to set a new direction for federal surface transportation policy. National organizations including APTA, the American Association of State Highway and Transportation Officials, the new T4 America coalition, the Brookings Institution, and the America 2050 Coalition all produced vision documents. Much of this work called for a transition from the past 50 years of federal policy, which had as its core goal the need to connect the nation through a system of interstate roads. This vision was arguably right for its times, but times have changed, and the vision of 2008 must reflect the needs of today.
As highlighted in APTA’s TransitVision 2050 effort, the new vision is a transportation policy focused on keeping America’s economic engines mobile, efficient, and productive. It will become a standard that every urban area possess a top-notch, high-capacity, high-quality public transportation system, and that public transportation be an option in all parts of the country. The goal is that America’s energy-efficient, multi-modal, environmentally sustainable transportation system will be the envy of the world.
A Role in Climate Policy
This was the year when the major role of transportation policy in climate and energy policy was recognized. Until 2008, public transportation had largely been ignored in the national debate about greenhouse gas reductions. In fact, past models identified transit as a cause, equating the more public transportation a community had with the more tailpipe emissions that would result.
A series of research products released in 2008 quantified the net contributions of public transportation to greenhouse gas reduction, including savings from direct VMT displacement, land use efficiencies, and reduced congestion. A series of reports and policy forums highlighted these findings. Moreover, congestion pricing was not held as solely an American issue; in an Federal Transit Administration study mission to London in May, representatives from Transport for London shared their positive experiences from having implemented that plan in that city.
In the end, the main piece of climate legislation considered by Congress in 2008, the Warner-Lieberman Climate Security Act (S. 3036), included public transportation as a central strategy for reducing greenhouse gases. The legislation eventually would have provided transit 2.75 percent of all proceeds from greenhouse gas allowances. As the price of gasoline climbed and eventually topped $4 per gallon during the summer, the cost of driving began straining household budgets, and more people accepted public transportation as the best way to save money. Nationwide, public transportation ridership grew by 3.4 percent in the first quarter of 2008, 5.2 percent in the second quarter, and a whopping 6.5 percent in the third quarter.
With ridership on public transportation surging, 85 percent of U.S. public transit systems reported capacity problems, according to an August 2008 APTA survey. Almost all agencies responding (91 percent) reported facing limitations in their ability to add service to meet the increased ridership demands, and more than half reported declining or stable local and state financial assistance over the last year, based on the economic downturn.
The financial disruption caused by the Wall Street failures in September affected public transportation as much as, if not more than, other sectors of the economy. Because failures in the insurance industry had an immediate effect on many rolling stock lease arrangements nationwide, APTA’s business members sponsored a study to review the impact of the weakened credit and financial markets on the way the business of public transportation is conducted in both the public and private sectors.
In addition, the Emergency Economic Stabilization Act (H.R. 1424), which allocated $700 billion to rescue the financial industry, also included a three-month extension of the compressed natural gas excise tax credit, which will now expire on Dec. 31, 2009. The bill also extends through 2009 the excise tax credit for alternative fuel and fuel mixtures, including biodiesel and ethanol.
President-elect Barack Obama and Congressional leaders appear to have made public transportation and other transportation infrastructure a centerpiece of their economic stimulus strategy. APTA has identified at least 736 public transportation projects that could be initiated within 90 days of approval of federal funding. Worth a total of $12.2 billion, these investments would create more than 340,000 green jobs for Americans and help transit systems meet the steadily growing demand for services. Over a period of two years, an estimated $32.4 billion in transit investment projects could be started, creating more that 900,000 jobs.
A Breakthrough for Rail
The year 2008 also will be seen as a breakthrough time for high-speed and intercity rail. In September, Congress approved its most ambitious rail bill ever: H.R. 2095 authorizes $12.9 billion for Amtrak and passenger rail over the next five years for capital improvements, operating expenses, and debt service. The bill, signed by President Bush in October, includes funding for a state grant program for intercity rail projects and development of high-speed rail corridors. On the other hand, the act also addresses critical issues involving railroad hours of service and positive train control.
Also this year, APTA released a major study demonstrating how tax-credit bonds could be an efficient and effective method for financing intercity and high-speed rail projects; several bills are pending along these lines. The combination of these actions has the potential to jump-start rail development and usher in a new era in American transportation. On Nov. 4, California voters approved a $10 billion bond to help finance a statewide high-speed rail system. This was just one of 25 ballot measures, out of a total of 33, approved by voters on Election Day. Earlier this year, 12 of 15 ballot measures were approved. In all, voters approved 77 percent of transit elections in 2008, making it the most successful year yet in terms of overall investment and percentage of approved measures.
PPPs and Politics
A dialogue with the Administration on congestion pricing and public-private partnerships brought forth some good ideas. APTA’s Public-Private Partnerships (PPPs) Task Force saw great value in these approaches but concluded that they could not substitute for an ongoing federal-state-local partnership in financially supporting public transportation.
Dr. William Ankner, who served in top-level positions at state DOTs in New Jersey, Delaware, Rhode Island, and Louisiana, probed the synergy that potentially exists between transit and toll roads in his report, Road Pricing, Tolling, Mega-Projects, and Other Multi-Modal Approaches: Strategically Positioning Public Transportation.
The issue of PPPs is nonetheless holding interest. Numerous U.S. public transit professionals traveled to France for the first French-American PPP, where they gained valuable information about what works best and what does not. This workshop was so successful a follow-up was held at the 2008 APTA Annual Meeting in San Diego.
Campaigns, Legislation, and Outcomes
The year was dominated by the presidential and Congressional elections. APTA joined with the Community Transportation Association of America and the American Bus Association to host events at both the Democratic National Convention in Denver and the Republican National Convention in Minneapolis-St. Paul. Following the presidential election, APTA met with the U.S. DOT transition team for President-elect Obama and presented them with a list of 42 Great Ideas to Move America Forward.
APTA’s 2008 Annual Meeting in San Diego was a busy place. Three Executive Committee task forces—TransitVision 2050, Authorization, and Framework for the Future—presented their reports at the meeting. These reports will prove invaluable in providing a guiding light for the growth of the transit industry; the APTA Executive Committee continued the discussion of these topics at its November retreat.
Our industry built a common agenda with the environmental community, with a continuous stream of meetings, conference calls, forums, and joint research throughout the year keeping all partners in close contact. APTA even hosted an international webinar on sustainability, featuring speakers from the U.S., Canada, Brussels, and Hong Kong. Further, the environmental community’s “Transition to Green” agenda presented to the environmental transition team included public transportation.
Securing funding for transit investments is always a key issue. At this writing, both the House and Senate appropriations committees have advanced transportation appropriations bills for Fiscal Year 2009 that would fund transit at or near the full $10.3 billion amount authorized by SAFETEA-LU (a continuing resolution was passed funding federal programs through March 2009). Legislation was also approved to plug an $8 billion shortfall in the Highway Trust Fund, thus foregoing any borrowing from the Mass Transit Account.
Moreover, the Homeland Security Appropriations Act (H.R. 6947) appropriates more than $49 million for surface transportation security and $400 million in transit security grants. It also prevents the U.S. Department of Homeland Security from imposing a match requirement and instructs DHS to award such grants directly to public transit agencies. The bill has cleared the applicable committees in the House, where it awaits a vote.
There will be much to watch in the coming year. The National Surface Transportation Finance Commission will release its report in early 2009. The current surface transportation authorization bill is scheduled to expire on Sept. 30, 2009, so the clock is already ticking in the 111th Congress. This is further complicated by the Highway Account of the Trust Fund continuing to run close to its margins.
Finally, for the first time in 14 years, Democrats will control both chambers of Congress, as well as the White House. There’s a feeling of promise in the air, particularly looking at the Obama administration. Expectations are high concerning a public transportation agenda—an agenda that was not in the forefront on recent years. No doubt, then, the review of the 2009 year will be strikingly different—but not less interesting—than this year’s.