Home Asides APTA speaks out against the use of stimulus funds for operating deficits

APTA speaks out against the use of stimulus funds for operating deficits

by Benjamin Kabak

Over the last few months, a growing divide has emerged amongst those of us in the transit advocacy community. Some fighting for transit dollars — such as Gene Russianoff of the Straphangers Campaign — have called upon agencies to use federal stimulus dollars earmarked for capital improvements to cover operating deficits while others — such as the Regional Plan Association and I — have come out against the use of capital funds as an operating band aid. In my view, it simply sets a bad precedent and allows state legislatures to further shirk responsibility for funding transit.

Today, the divide has spread to the federal level as the American Public Transportation Association, a federal transit lobbying organization, announced its opposition to the use of stimulus funds for operating expenses. Elana Schor at Streetsblog DC covered the story today, and APTA’s statement jibes with my position. “A lot of folks look at it as a zero-sum game,” Paul Dean, the group’s government relations director, said, “that if you add a federal subsidy, that’s going to lead to state and local governments decreasing their contribution, and you’re going to be back in the same place you were — with less money available to meet your capital needs.”

In New York, MTA CEO and Chairman Jay Walder has continually voiced his opposition to the so-called Russianoff Plan as well. Since the use of stimulus dollars wouldn’t come close to covering the MTA’s gap, the authority is still trying to find the $750 million it needs via service cuts, internal belt-tightening and better state-based funding mechanisms. The need for capital money and expansion, even at a time when operating revenues are low, remains a paramount concern for an agency all too well aware about the dangers of capital neglect.

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Niccolo Machiavelli March 23, 2010 - 10:11 pm

What is the proper role of the State and City in providing Capital Aid? Why can the State and City depend on the operating budget to pay the debt service on capital expenses and pay-go capital but the Feds must be statutorily prohibited from helping with the operating budgets? Is it a ratchet, it only turns one way? Why couldn’t the Feds provide an option that states,localities and transit agencies use the money however they wanted? What is wrong with letting the states and localities decide?

Benjamin Kabak March 25, 2010 - 1:49 am

My fear is that the states and localities will take the federal money and say that those dollars are all the MTA is going to get in government support. It might be an unfounded fear.

I am convinced though by the MTA Board members who today said that federal stimulus dollars are supposed to be used to save and/or create jobs. So perhaps that’s a better line of reasoning for those who want to apply stimulus dollars to the operating deficit.

In the end, though, the stimulus grant will cover a hair over 10 percent of the MTA’s deficit. Is it worth it?


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