Home Public Transit Policy From DC, inaction on transit operating support

From DC, inaction on transit operating support

by Benjamin Kabak

As gas prices rise and public transportation usage climbs upward, transit agencies are finding themselves struggling under increasing costs. That’s a sentence that was true two years ago and still rings true today, but the federal government isn’t doing much about it. Sure, the feds fork over billions for capital expansion plans, but operating support has been hard to come by.

Last week, transit agencies again went hat in hand to Washington to ask for operating support, and again, Washington rebuffed their advances. Melanie Trottman of the Wall Street Journal was on hand to report on these goings-on and more:

Officials from more than 30 public transit systems came to Washington this week to tell Congress that most of them don’t have the money to keep up with demand as rising gas prices boost ridership. But a key House Republican said Tuesday that transit systems needed to streamline their operations, and not count on Congress for more money…

President Barack Obama’s 2012 budget requested $22.4 billion for public transit, more than double the amount he sought for fiscal 2010. A separate proposal would pump $119 billion into public transportation programs over six years as part of a $556 billion highway, transit and rail infrastructure bill.

But the fate of both proposals is uncertain. The last multiyear highway and transit bill expired in 2009. Since then, Congress has passed seven extensions to continue funding, but the heads of many transit systems say their plans for growth and upkeep have already been stymied by funding uncertainty.

The key House Republican is none other than House Transportation Committee Chair John Mica. During the hearings, he said of transit agencies, “They’re going to have to be much more creative and look at consolidation of some of their operations.”

The American Public Transportation Association, though, wants to see action from DC before it’s too late. APTA looks at rising gas prices and notes how the increase in fuel costs lead to more transit trips. If gas tops $4 per gallon, transit agencies would see an additional 670 million trips a year. As Trottman notes, “When gas prices rose in 2007 and topped $4 in mid-2008, 85% of transit agencies reported experiencing capacity constraints on parts of their systems, APTA said.”

The problem is two-fold. On the one hand, politicians hate to invest in operating costs because it’s not sexy. It’s not something they can show to the press or constituents as a firm commitment to transit. They can’t take people into the headquarters of a transit agency to show a well-funded system as they can to, say, a pit underneath the Sunnyside Yards.

On the other hand, the nation dialogue has focused almost exclusively on cutting costs. Politicians are putting pressure on municipalities and local government institutions to trim, trim, trim and cut, cut, cut. The federal government and the Republican-dominated House, in particular, is not going to be too forthcoming with extra dollars for operating costs right now.

And so transit agencies will go forward with their economic crises. If gas rises and voters head to buses and trains, systems will find themselves at capacity, and politicians may begin to hear from constituents about inadequate public transit. It will take creative leadership to solve this problem, and right now, we’ve seen little willingness to head down that path. Costs will grow while subsidies and support do not.

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Christopher March 21, 2011 - 12:34 am

And yet? Oil exploration, refining and delivery all get subsidies. What’s sexy about that?

Oh yeah, campaign donations. Never mind.

Bolwerk March 21, 2011 - 6:08 pm

Maybe states local governments need to start buying their representatives!

pea-jay March 21, 2011 - 9:13 am

On the other hand, more passengers with the same level of service improves farebox recovery ratios. Stuffing more people in busses and trains does not increase labor costs one bit and marginally increases energy demand. Given that many transit operators already contract for fuel ahead of time and pay lower rates, gas price increases should represent a boon for transit operators. This isn’t transit related but would really help agencies like the MTA would have been something like universal health care like a single payer system. Labor expenses could have been lower. I don’t blame the Feds for not supporting transit operation costs, as that really should be state, region or local responsibilities, though the deep pocketed federal government is ideal for funding those large capital projects

R. Graham March 21, 2011 - 3:23 pm

But on the other-other hand, more passengers with the same level of service improves farebox recovery ratios but at the same time you are adding additional service which leads to a hire fuel bill.

It’s the good ole double edged sword.

Chris March 21, 2011 - 10:02 am

I’m not really convinced by this… a situtation of increasing demand shouldn’t be one in which transit operations require additional subsidy. “Capacity constraint” is a codeword for “our fares are too low but our local politicians want the federal government to bail them out of making a politically unpopular fare hike”. Rising gas prices – i.e., a relative reduction in the subsidy for automobile use – should represent a chance for mass transit to get closer to operating profitability.

R. Graham March 21, 2011 - 3:30 pm

The problem with this is that it doesn’t apply too well to the MTA. Over the years the city and state has done nothing but reduce their contributions to the operating budget. At the same time the state tried to replace their funding with a complicated real estate sales tax windfall set aside for the MTA, but what happens when the housing market is no where it used to be in close to four years now?

This is why I get mad at all those people who used to question how the MTA could have surpise surpluses for the first part of the last decade. Because real estate in NY was insane, but the MTA still couldn’t factor a number in the budget because they state would never give them one. They only provided the cash when it was all said and done.

Even now with this payroll tax, it’s based on if you’re paying employees. If you’ve been cutting back on employees as what has been going on this past year for most of the state then it’s hard to expect capital. The state funding to the MTA is all based on gimicks and never a concrete number.

Chris March 21, 2011 - 4:08 pm

The federal government’s enabling of Albany is precisely the problem – it shouldn’t blindly make up the money the city and state is failing to provide the MTA. If the desire in Albany is to defund the MTA, let’s allow the inevitable consequences to occur – major fare hikes, service cuts, and economic disruption in the state’s major population center – and see how our state politicians fare in their next elections. If you want a funding source not based on gimmicks, you need to punish the gimmick-creators, not have the federal government bail them out based on the ludicrous claim described in this article.

Benjamin Kabak March 21, 2011 - 4:09 pm

Ludicrous claims?

Chris March 21, 2011 - 4:39 pm

Sorry – specifically the concept that transit operators are hard pressed financially to cope with increasing demand. On the contrary, it’s obvious for transit as for any productive entity that increasing demand for the product improves economic viability.

The actual reason transit operators need funding is twofold: the unwillingness of state & local politicians to provide operating funds and the unwillingness of transit agencies and their overseers to raise fares. The claim that systems are at capacity suggests that fare increases would be particularly potent at increasing revenues.

pete March 21, 2011 - 5:02 pm

NYCT charges $2.25 per ride. CT Transit charges $1.25 per ride. How does that happen? Either massive subsidy on CT Transit’s side. Or massive waste and inefficiency on NYCT’s side. If anything, it should be argued that NYCT should be cheaper then CT Transit since NYCT has much higher ridership per vehicle. At the end of the day, your in a chair moving 30 mph. Why is there a difference between transit systems?

Alon Levy March 21, 2011 - 9:36 pm

CT Transit is a rudimentary mobility program for poor people and carless New Yorkers visiting relatives like this guy.

I hate to say it, but NYCT is probably the best-run transit agency in the US. It’s an easy barrier to clear, but still.

al March 22, 2011 - 12:00 am

Transit agencies could hire part time rush hr drivers to meet peak demand. Regular transit drivers will continue to work regular hrs, but the peak demand will be supplemented via part time drivers. Think of it like electricity. Regular drivers are like base load power plants. Intermediate load is a mix of regular and part timers. Peak demand would be met by part timers.

More along the lines of income supplementation. It would suit those who start their jobs at 10am, or get off at 4 PM. Most school bus drivers are available during late AM rush (after 8:45AM) as well as during PM rush (after 4:30 PM).

Alon Levy March 22, 2011 - 5:30 pm

Part time peak-only drivers cost more per hour than full time drivers. Split shifts – e.g. 7-9 am and 5-7 pm – cost more per hour than continuous shifts; benefits are the same. That’s one of many reasons why on the margins it’s cheaper to increase off-peak service than to increase peak service.

JAzumah March 21, 2011 - 10:35 am

Exactly Chris.

The reality is that the Feds pay for 80% of most capital expenditures. The only way to keep the larger local governments invested is to make them pay for operating costs. Otherwise, they will blow up the federal transit budget.


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