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The
demand for high-quality transportation alternatives in the nation’s
metropolitan areas is growing, as Congress heads towards consideration of
the reauthorization of the Transportation Equity Act for the 21st Century
(“TEA-21”). Congress
authorized more than 190 fixed-guideway projects during TEA–21 and it is
estimated that there are at least 275 other fixed-guideway projects being
studied.1 There
are at least 40 fixed-guideway projects in final design or preliminary
engineering and approximately 130 projects currently being studied.2
This growth in demand is also
confirmed by success at the ballot box. Sixty-nine percent of the
transit-oriented referenda offered to voters in 2000 were passed. And
localities, through the use of dedicated local sources of funds, are
absorbing a higher and higher portion of the cost of new transit projects:
localities now contribute more than 50 percent of the cost of all rail
projects being built in the United States, compared to the statutory local
match requirement of 20 percent.
This mainstream movement toward
transit will compel Congress to respond during the reauthorization of TEA
21. The nature of Congress’ response is uncertain, though, as
the terrorist attacks of September 11th have completely altered the
budgetary climate for the foreseeable future:
- The
budget surplus has declined significantly due to the President’s tax
cuts adopted earlier this year. New spending approved in response to
the terrorist attacks of September 11th has broken the Social Security
“lock box” and could result in Congress returning to deficit spending by the end of FY 2002.
- The
FY 2002 Budget Resolution limits growth in federal program spending to
four or five percent, compared to current annual growth in the transit
program of 7.6 percent annually.
- Gasoline
tax receipts have been leveling off over the past 18 months.
- If
the transit program were to continue to grow at 7.6 percent annually
the funds dedicated to transit in the Highway Trust Fund would begin
to run a negative cash balance in either 2007 or 2008 – the fourth
and fifth years of the potential TEA-21 Reauthorization Act.
These facts are extremely
important. The transit
program will rely on the gasoline tax (2.86 cents of the 18.4 cents
federal tax), which will contribute $5.4 billion in FY 2002, and General
Funds, which represent about $1.34 billion, to support the $6.74 billion
transit program in FY 2002. The
current projections for the federal budget surplus, the limitations on
federal budget growth in the FY 2002 Budget Resolution, and the inability
of the current transit share of the gasoline tax to support historical
growth are ominous signs for the transit program. They should serve as the
clarion call for transit supporters heading into TEA-21 reauthorization.
Thus, we are faced with
unprecedented demand for transit nationwide while federal budget resources
are increasingly constrained. There
are a number of options currently available, as well as several that
Congress could consider during TEA-21 reauthorization. Without
handicapping their likelihood for success, I would suggest that Congress
consider the following :
- Raise
the gasoline tax by a nickel from 18.4 cents a gallon to 23.4 cents a
gallon. Assuming that transit continues to receive approximately 15.5
percent of the gasoline tax revenues, the hike would generate an
additional $775 million annually for transit.
- Increase
the share of the gasoline tax that transit receives to 25 percent of
any increase. Combined with the five cent increase described above,
the increased share would generate an additional $450 million for
public transit.
- Dedicate
additional General Fund revenues to transit, either separately or in
addition to any gasoline tax increase.
- Promote
additional flexibility in the highway program by suballocating to the
metropolitan areas a portion of the National Highway System (NHS)
Program, in the same manner as the Surface Transportation Program.
Additionally, expand the definition of what is considered to be the
“NHS corridor,” to include acknowledgement that rail service does
not need to be immediately adjacent to the NHS corridor in order to
favorably impact congestion in that corridor.
- Develop
a program similar to S. 250, the High Speed Rail Investment Act,
which, as proposed, allows states to leverage highway funds to provide
capital to upgrade Amtrak Equipment and rail lines, while also
allowing states to expand high speed rail service.
A similar program for transit would permit comparable capital
investments in rail transit service through the leveraging of highway
funds in the same manner.
The prognosis for each of these
options is uncertain. Each
faces its own set of challenges in today’s federal budgetary climate.
Yet, the political environment is very favorable. A growing number
of communities are expressing their support for more transportation
options at the ballot box. And more members of Congress are becoming aware
that voters expect federal funding to be provided for rail projects in
their communities. It is
community support – and the effectiveness of local citizens to express
their support – for transportation choices that will result in Congress
considering and adopting some or all of these options as part of TEA-21
reauthorization.
Jeffrey F. Boothe is partner in
the law firm of Holland & Knight, LLP. For the past five years, Mr.
Boothe has chaired the New Starts Working Group which advocates support
for new rail projects on behalf of transit authorities, metropolitan
areas, engineering firms and rail car manufacturers.
He can be reached at jboothe@hklaw.com
.
Notes
1 American Public
Transportation Association Survey, November 1999.
2 Annual Report on New
Starts: Proposed Allocation of Funds for Fiscal Year 2002, Federal
Transit Administration, May 2001.
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