Under construction: Tysons Corner Rail Extension in Virginia

Beyond the Ballot Box – Sustainable Transportation Funding in a Time of Federal Retrenchment

 by Mariia V. Zimmerman, Visiting Fellow with The Metropolitan Institute at Virginia Tech

A core element of a sustainable community is providing multiple transportation choices so that people of all ages and income levels have access to local and regional opportunity.  Of the six Livability Principles adopted by the Federal Partnership for Sustainable Communities, “Providing More Transportation Choice” gets top billing, and was the basis for a coordinated grant program in 2010 between the US Department of Transportation and the US Department of Housing and Urban Development.  The local interest in expanding transit options has grown substantially over the past 3 decades.  According to one estimate there are currently more than 600 transit projects in various stages of planning across the country, totaling well over $300 billion in cost to build.

At the same time, however, the federal share of investment in transit is declining.  Federal assistance accounted for 9% (or $3.5 billion) of all operating assistance to transit agencies in FY2010 and 41% (or $6.8 billion) of total capital funds.  With less than 20% of all transit funding coming from the Feds, many have called into question federal regulations when local and state resources are funding the bulk of a project’s cost. On the flip side, recent federal discretionary grants provided incentives to further livability principles and advance the adoption of greener transit technologies and multimodal transportation solutions.  MAP-21, the federal transportation bill passed this summer, dissolved many of these programs in favor of formula funds that go directly to transit agencies or state department of transportation.

Despite of, or perhaps because of, the stagnation of federal transit funding, a growing number of communities are forging their own funding path to building and expanding sustainable transportation systems.

Steady Increase of Local Transit Ballot Measures

The Center for Transportation Excellence has been tracking local transit ballot measures for more than a decade and finds that an increasing number of communities are passing their own transportation funding measures. This year alone, 39 measures in 9 states have already been voted on with an 85% success rate.  Next month, an additional 18 measures in 12 states will be decided.  Some of these ballot measures seek to provide additional revenues to support and maintain existing transit service. Others are the key to funding local transit expansion of light rail and streetcar. Perhaps the most ambitious is Measure J (for Jobs) in Los Angeles that asks voters to extend the current ½ cent transit sales tax for another 30 years to accelerate the build-out of LA’s ambitious transit plans.  Each of these measures is being closely watched and widely debated in their communities and on the national stage.

But does the success of local transit measures indicate growing public support for increasing federal transportation funding?  Recent polling by the Mineta Transportation Institute and  the Natural Defenses Resource Council, would seem to support this theory.  In reality though, there appears little agreement across the country regarding a willingness to pay for improved transit service at the federal level.

Shifting to Federal Loans in Place of Direct Grants

The largest funding increase in MAP-21 was in its TIFIA program to provide low-interest federal loans for large-scale transportation projects where the program expanded by 720% to $1 billion over the two years covered by the authorization. A number of recent blogs have discussed TIFIA and the potential for it to be a major source of new transit funding, or not. MAP-21 may signal a permanent shift in favor of loans over direct federal support and the necessity of stronger political alliances for transit to tap into broader state transportation and general fund dollars. New alliances will be required to secure private sector funding for sustainable transportation projects, and to leverage local property or sales tax measures to back loans and bonds for new transit investments.

Does a greater reliance on loan programs and local funding solutions create an unequal playing field of winners and losers?  Rural and smaller metropolitan regions may lack the population and economic activity to raise enough revenue to back a TIFIA loan or generate sustained future local tax revenues.  The potential exists within metropolitan areas for regional inequity between those jurisdictions able to garner political support or market interest moving forward with greater transportation access, and those who do not being left behind.

Some may correctly see this as political Darwinism. Those cities or regions that are able to succeed in getting voter approval, that have a strong philanthropic community, and that include a vibrant business community will emerge as even stronger economic and sustainability leaders. However, this type of de facto national infrastructure investment policy may not serve our country well in the long run.  Even those developers working on transit-oriented development note that without the transit, TOD is just “ODd.”

The need for improved indicators and economic case making has never been greater. The public and politicians are asking important questions in making tough decisions as to whether or not an added tax or private investment is worthy. Transportation agencies that have succeeded in changing the dialogue from one of opposition to support have demonstrated their ability to be good fiscal stewards of the public dollar, and quantify public benefit through increased ridership, property values, job creation and new development.

We are experiencing a time of great innovation in sustainable transportation, both in the technical solutions that are emerging in communities of all sizes and in the public appetite to fund transportation. A positive side effect is the transformation occurring between public agencies, advocates and private sector funding partners.  As we move forward, being mindful about the broader implications to regional equity, economic competitiveness, and environmental impacts will be essential to ensuring that communities of all sizes have the opportunity to provide more transportation choice.