Written Testimony Of
William W. Millar, President
American Public Transportation Association
Sumitted To The
Subcommittee On Transportation,
Housing And Urban Development, And Related Agencies
Of The
House Committee On Appropriations
On Federal Public Transportation Investment
For Fiscal Year 2008
*******
April 13, 2007
(Download In Adobe PDF Format)
INTRODUCTION
Mr. Chairman and members of the subcommittee, on behalf of the American Public Transportation Association (APTA), we thank you for this opportunity to submit written testimony on the need for and benefits of investment in Federal Transit Administration (FTA) programs for Fiscal Year (FY) 2008.
The FY 2008 Transportation, Housing and Urban Development, and Related Agencies Appropriations bill is an opportunity to advance national goals and objectives through increased investment in our surface transportation infrastructure, particularly public transportation. For that reason, we strongly urge Congress to fund the federal transit program at no less than the $9.731 billion level authorized in the Safe, Accountable, Flexible, Efficient Transportation Equity Act - A Legacy for Users (SAFETEA-LU, P.L. 109-59).
In 2006, Americans took 10.1 billion trips on public transportation. This is the highest ridership in 49 years. These trips were to the office, to school, to the doctor, to the grocery store, to the movie theatre, and to the shopping mall. These trips were in rain, snow and sunshine. These trips were made by people young and old, in places large and small. All across America, public transportation provides choice, freedom and opportunity.
Let me put the 10.1 billion number in perspective. This is more than the number of Americans who attended NFL games, MLB games, NBA games, NHL games, NASCAR races, went to the movies, and ate a hamburger from McDonald's, Burger King, and Wendy's combined. Transit ridership growth of 30 percent since 1995 is outpacing both the growth of our population - 12 percent - and the growth in the use of the nation's highways - 24 percent - since then. Each weekday, 34 million trips are made on public transportation in our nation.
Expanding access to public transportation is more important than ever. Transit plays a number of important roles. It reduces congestion and it provides mobility options. Its use decreases our dependence on foreign oil and improves air quality. Increasing access to public transportation is clearly needed to create a stable, healthy and strong America. Forty years from now when America's population will exceed 400 million, we will be glad we had the foresight to discuss, plan and invest in the future of public transportation today. As we look to the future, we know there is no possible way that our roads can accommodate all the anticipated growth on their own. Transit is, and has to be, part of the solution.
FISCAL YEAR 2008 GOALS
APTA recognizes the need to wisely invest limited federal resources, and we believe that investment in public transportation is a wise use of limited resources. To realize all of the benefits of public transportation, we urge Congress to follow the investment schedule in SAFETEA-LU. The law authorizes $9.731 billion for the federal transit program in FY 2008, including $7.766 billion in contract authority from the Mass Transit Account (MTA) of the Highway Trust Fund and $1.965 billion in new budget authority general fund spending.
We urge Congress to fund the federal transit program at the authorized level so that communities across the nation, utilizing state and local resources in tandem with federal funds, can begin to address the overwhelming need both to preserve the existing transit infrastructure and to expand and improve that infrastructure in growing communities and those without good transit service.
Our surface transportation system provides a competitive edge for the United States, and we need to retain that edge in today's global economy. Substantial federal investment is needed just to maintain the system. A new survey prepared by Cambridge Systematics as part of the Transit Cooperative Research Program and requested by APTA and the American Association of State Highway and Transportation Officials (AASHTO) finds that annual transit capital needs are greater than $45 billion a year. State and local governments cannot meet the expanding capital need requirements of public transportation while also providing for transit operating expenses. To help meet these needs, APTA believes that the federal government should invest no less in public transportation than the $9.731 billion level that was authorized and guaranteed by SAFETEA-LU.
PRESIDENT'S BUDGET PROPOSAL
The Administration's FY 2008 budget proposal recognizes the importance of public transportation investment, and while we are pleased that it adheres to the authorized transit program in most respects, APTA strongly objects to the budget proposal's recommendation that transit funding be cut $309 million below the authorized and guaranteed levels. The Administration budget proposal cuts some $300 million in investments in rail and other fixed guideway transit projects in the New Starts and Small Starts program that were authorized by Congress under SAFETEA-LU. This is a failure to fund nearly 18 percent of the investment authorized to build these new projects which are crucial to attracting new riders.
As this committee knows, there is overwhelming demand for New Starts and Small Starts projects, and SAFETEA-LU authorized 387 such projects. New fixed guideway projects are an important part of meeting transit needs, but these major capital projects take years to develop and require a predictable funding commitment. The effect of underfunding the New Starts/Small Starts program will be felt disproportionately in future years by causing transit providers to fall further behind in the development of new projects due to the cuts that would be implemented under the Administration proposal, depriving communities of the congestion relief and environmental benefits associated with the projects.
If New Starts project schedules are delayed, project costs also rise due to inflation. A recent study by the Associated General Contractors of America (AGC) finds that the cost of building surface transportation infrastructure has increased at a much faster rate than the Consumer Price Index. Transportation-related construction costs increased by more than 30 percent between 2003 and 2006, yet the consumer price index for urban areas grew by only 11 percent during that period. Looking ahead, the AGC's research predicts that transportation construction prices will increase at an annual rate of at least 6 percent, but increases could be much higher based on the experience of recent years in which prices spiked 10 percent and 14.1 percent in 2004 and 2005, respectively. If the New Starts/Small Starts program is cut by $300 million in FY 2008, it will require $318 million in FY 2009 to build equivalent projects if costs rise by only 6 percent, $330 million if costs rise by 10 percent and $342 million if costs rise by 14 percent. The administration's budget proposal is truly pennywise and pound foolish. In recent years the time required to develop and complete New Starts projects has continued to grow. This also adds to project costs, and APTA urges the Committee to work with FTA to expedite this process.
We want to make another point, Mr. Chairman. SAFETEA-LU restructured the general fund and Mass Transit Account funding sources so that MTA outlays are now scored when they are actually spent rather than when they are appropriated. The good news is that MTA balances now are significantly higher than they would have been under the old scoring system. But this also means that the new starts program is now funded exclusively from the general fund. Mr. Chairman, it is important to emphasize that this was done to improve the overall financing of the federal transit program, and was not meant to create funding uncertainty or program cuts, as the Administration has proposed for the second year in a row.
While we understand the need to protect against spending the public's money on imprudent investments, we also believe that the administration's management of the New Starts and Small Starts programs in recent years has discouraged investment in fixed guideway transit systems. By overemphasizing a limited number of benefits in the evaluation of potential projects, particularly travel time savings, FTA has effectively prevented the advance of viable projects that can provide substantial benefits to communities. We firmly believe that investments in fixed guideway transit, particularly rail-based transit, can be one of the most effective ways to offer an attractive alternative to the high cost of driving. Fixed guideway investment is an alternative that requires long-term vision since construction of new and expanded rail systems takes time, but it is still one of the most effective ways to reduce and prevent congestion in metropolitan areas and advance other national goals.
Finally, APTA urges this Committee to consider providing New Starts projects with the same federal share of project costs provided for other transit and highway investments. Both FTA and Congress have taken a number of actions that have prevented the advancement of New Starts projects that seek a federal share of costs greater than 60 percent, and for most current projects, the local cost share exceeds 50 percent even though current law provides up to an 80 percent federal share. APTA believes that if the federal government wants to encourage communities to invest in New Starts, it should treat these projects like other transportation infrastructure investments. New Starts projects are particularly effective in addressing national goals like reducing fuel consumption and fighting congestion on our roads, and the federal commitment to New Starts projects should reflect the important benefits derived from these investments.
TRANSIT FIGHTS CONGESTION
The U.S. Department of Transportation (USDOT) has recognized that system congestion is one of the single largest threats to our nation's economic prosperity and way of life. In 2003, Americans lost 3.7 billion hours and 2.3 billion gallons of fuel sitting in traffic jams as a result of congestion. APTA strongly applauds the Department's efforts to focus national attention on our congested roads, rails and airways, but USDOT's efforts to fight congestion under its National Strategy to Reduce Congestion on America's Transportation Network (commonly referred to as the "Congestion Initiative") are simply incomplete. While our nation's anti-congestion "blueprint" should incorporate new strategies like the innovative pricing, private sector investment, and urban partnership elements of the Department's Congestion Initiative, it must also call for a dramatic increase in the use of proven congestion fighting strategies like transit.
34 million trips are taken each weekday in the United States on public transportation, and each trip fights congestion. According to the 2005 Texas Transportation Institute Annual Urban Mobility Report, transit is successfully reducing traffic delays and costs in the 85 urban areas studied. Without transit:
- delays in the 85 urban areas would have increased 27 percent, and
- residents in the urban areas studied would have lost an additional $18.2 billion in time and fuel as a result of increased congestion.
The impacts of congestion run deep. When we think of the freight trucking industry, transit plays a role in keeping highways less congested in urban areas. The same can be said for Amtrak passengers whose decisions to travel by rail may be influenced by their ability to get to their ultimate destinations once they step off the train. Without adequate transit in cities, passengers may never choose to use intercity rail, adding more cars to our highways. When we think about air transport congestion, the total trip from origin to destination must be considered. With the help of public transportation, traffic congestion to and from the airport can be dissipated to allow for a quicker trip into and out of our cities. Good public transportation service allows all types of trips to be completed quickly and efficiently. In short, we must view the entire transportation network as a single system, one that can be planned managed and financed with a broad view to the overall good. Holes in the network through underinvestment result in degradation of performance for the entire system.
PUBLIC TRANSPORTATION AND ENERGY INDEPENDENCE
As our nation revaluates our patterns of energy use, we must recognize the important energy savings that are derived from transit use. Earlier this year, a report by ICF International calculated that public transportation today reduces petroleum consumption by a total of 1.4 billion gallons of gasoline each year. This means:
- 108 million fewer cars filling up - almost 300,000 every day
- 34 fewer supertankers leaving the Middle East - one every 11 days
- over 140,000 fewer tanker truck deliveries to service stations per year
- total savings as great as the entire amount of gasoline consumed in states the size of Nevada, Utah or New Mexico
- five times greater savings than converting the entire 478,000 federal light duty vehicle fleet to alternative fuels.
These savings result from the efficiency of carrying multiple passengers in each transit vehicle; the reduction in traffic congestion from fewer automobiles on the roads; and the varied sources of energy for public transportation.
All savings would be magnified with increased use of transit relative to the automobile. Savings would be magnified still further when we account for the energy efficiencies that are characteristic of cities highly reliant on transit which use much less energy per capita than auto dependent cities. According to research by sustainability experts Peter Newman and Jeff Kenworthy, U.S. cities use two and a half times more oil than comparable cities in Europe, and five times more oil than comparable cities in Asia.
RISING TRANSPORTATION COSTS ARE AFFECTING AMERICAN HOUSEHOLDS
The ICF International report also identifies the significant cost-saving opportunities to American households made available through public transportation. Indeed, a two-adult "public transportation household" saves an average $6,251 every year, compared to an equivalent household with two cars and no access to public transportation service. Transit riders save an average of $1,400 a year in gasoline alone. A "public transportation household" is defined as a household located within three-fourths of a mile of public transportation, with two adults and one car.
To put these household savings in perspective, compare them to other household expenditures:
- the average U.S. household spent $5,781 on food in 2004
- the average U.S. homeowner with a mortgage spent $6,848 on mortgage interest and fees in 2004
Transportation costs now consume 18 percent of the typical household budget, up from about 15 percent in 1960. This is second only to housing as a percentage of household budget and is higher than food (13 percent) and health care (6 percent), numbers three and four respectively. Thus, transit offers opportunities to households that will become increasingly important (particularly to workers) as energy and other costs continue to increase.
CONCLUSION
Public transportation plays a key role in meeting the goals of the Administration and Congress in providing energy independence, congestion relief and transportation mobility options for Americans. APTA strongly believes that the federal government should invest no less than the $9.731 billion level authorized and guaranteed by Congress for FY 2008 in SAFETEA-LU if we are to advance these goals.
Mr. Chairman, on behalf of APTA's more than 1500 member organizations, I thank you for this opportunity to express our views.
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