[Senate Hearing 108-284]
[From the U.S. Government Publishing Office]
S. Hrg. 108-284
PROPOSED FISCAL YEAR 2004 BUDGET FOR
THE FEDERAL TRANSIT ADMINSTRATION
=======================================================================
HEARING
before the
COMMITTEE ON
BANKING,HOUSING,AND URBAN AFFAIRS
UNITED STATES SENATE
ONE HUNDRED EIGHTH CONGRESS
FIRST SESSION
ON
THE DETAILS OF THE ADMINISTRATION'S FISCAL YEAR 2004 BUDGET PROPOSAL
FOR THE FEDERAL TRANSIT ADMINISTRATION
__________
MARCH 13, 2003
__________
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Affairs
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COMMITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS
RICHARD C. SHELBY, Alabama, Chairman
ROBERT F. BENNETT, Utah PAUL S. SARBANES, Maryland
WAYNE ALLARD, Colorado CHRISTOPHER J. DODD, Connecticut
MICHAEL B. ENZI, Wyoming TIM JOHNSON, South Dakota
CHUCK HAGEL, Nebraska JACK REED, Rhode Island
RICK SANTORUM, Pennsylvania CHARLES E. SCHUMER, New York
JIM BUNNING, Kentucky EVAN BAYH, Indiana
MIKE CRAPO, Idaho ZELL MILLER, Georgia
JOHN E. SUNUNU, New Hampshire THOMAS R. CARPER, Delaware
ELIZABETH DOLE, North Carolina DEBBIE STABENOW, Michigan
LINCOLN D. CHAFEE, Rhode Island JON S. CORZINE, New Jersey
Kathleen L. Casey, Staff Director and Counsel
Steven B. Harris, Democratic Staff Director and Chief Counsel
Peggy R. Kuhn, Senior Financial Economist
Sherry E. Little, Legislative Assistant
Sarah A. Kline, Democratic Counsel
Aaron Klein, Democratic Economist
Joseph R. Kolinski, Chief Clerk and Computer Systems Administrator
George E. Whittle, Editor
(ii)
C O N T E N T S
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THURSDAY, MARCH 13, 2003
Page
Opening statement of Chairman Shelby............................. 1
Opening statements, comments, or prepared statements of:
Senator Sarbanes............................................. 3
Senator Chafee............................................... 6
Senator Reed................................................. 6
Senator Dole................................................. 8
Prepared statement....................................... 28
Senator Schumer.............................................. 8
Senator Dodd................................................. 9
Senator Bennett.............................................. 13
Senator Carper............................................... 25
Senator Corzine.............................................. 28
Senator Johnson.............................................. 29
WITNESS
Jennifer L. Dorn, Administrator, Federal Transit Administration,
U.S. Department of Transportation, Washington, DC.............. 13
Prepared statement........................................... 30
Response to written questions from:..........................
Senator Shelby........................................... 35
Senator Chafee........................................... 39
Senator Reed............................................. 40
Senator Carper........................................... 42
(iii)
PROPOSED FISCAL YEAR 2004 BUDGET FOR
THE FEDERAL TRANSIT ADMINISTRATION
----------
THURSDAY, MARCH 13, 2003
U.S. Senate,
Committee on Banking, Housing, and Urban Affairs,
Washington, DC.
The Committee met at 10:20 a.m. in room SD-538 of the
Dirksen Senate Office Building, Senator Richard C. Shelby
(Chairman of the Committee) presiding.
OPENING STATEMENT OF CHAIRMAN RICHARD C. SHELBY
Chairman Shelby. The hearing will come to order. I am very
pleased this morning to welcome Federal Transit Administrator
Jennifer Dorn from the Department of Transportation.
Welcome. We are sorry we were late. We had two back-to-back
votes.
I asked Administrator Dorn to come before the Committee
today to share the details of the Administration's 2004
Proposed Budget for FTA, and I appreciate her willingness to
respond to the Committee's request for her time.
I will begin by saying that this is most likely the first
time since 1998 that FTA's budget has garnered so much
attention and scrutiny. Because we are in a reauthorization
year, it is inevitable that the 2004 Budget would provide a
glimpse into what the Administration will propose for TEA-21's
successor bill. Incidentally, the reauthorization proposal is
one that I hope will be delivered in an expeditious fashion. I
need not tell the Administrator here that we are anxiously
awaiting the details of the President's proposal. It is,
frankly, a bit troubling that we have yet to see it. When it is
released, I will be calling a hearing of the Full Committee to
review it. That being said, let's move on to the 2004 Budget.
The President is proposing a Fiscal Year 2004 Budget level
of $7.226 billion--the same level as 2003. Several substantive
legislative proposals accompany the budget. The Administration
is proposing distributing all grant funds by formula, with the
exception of New Starts. I have observed that transit
properties have the tendency to make decisions based on the
category of Federal assistance available, which may not lead to
the best transit choice to meet that community's need. It is
clear to me that what works for Birmingham doesn't necessarily
work for a place like Detroit or even Baltimore.
I am most concerned, however, about the idea of eliminating
the bus program. For many communities this is the lifeblood of
its transit system. It is an invaluable resource to the great
majority of communities who rely on buses as the sole mode of
public transportation. Eliminating the program, I believe,
would be detrimental to mid-sized communities who need lump
sums to make bus purchases and build bus facilities. Regular
formula funds--even with the increase of 30 percent that would
come from the elimination of the bus program--would not provide
enough resources in a timely fashion to make cost-effective bus
purchasing and construction decisions. It may take several
years worth of formula funds for communities even to be able to
do a modest bus fleet replacement. In my view, eliminating the
bus and bus facilities program is not a feasible option that
makes a lot of sense.
Along the same lines, I am interested to hear from the
Administrator about the rationale for expanding resources for
New Starts. I do think that there is great value in widening
the criteria for New Starts eligibility that would include new
innovative technologies like bus rapid transit. However, I
worry that FTA is too quick to commit themselves to full
funding grant agreements, which take up the Agency's funds
going forward. The result has been that we are entering a
reauthorization cycle with $3.9 billion in New Starts funds
having already been committed to existing and proposed
projects. Cynics in the audience may believe that taking bus
money to add to New Starts was necessary to have funds
available for additional full funding grant agreements.
I am pleased that rural transit is finally garnering the
attention that it deserves. This is an area too long neglected.
I have seen the value of committing resources to advance rural
connectivity in communities all over the country. Currently, 40
percent of rural counties offer no transit service at all.
Increasing funds for the rural program will go a long way
toward meeting the growing need.
The Administration is also proposing eliminating rail
modernization as a program with separate requirements from the
Urbanized Area Formula Program. Merging these two accounts will
not in any way affect the amount of money that any one
community receives. Instead, it will eliminate the requirement
that only rail modernization funds be spent on rail
modernization projects. While I could debate the wisdom of how
the rail modernization program is allocated under TEA-21, I
think this is an intriguing proposal and one that I hope to
hear about in greater detail from the Administrator this
morning. I think there are a few clever ideas in the
President's proposal for transit, although on balance, I think
it is a current services budget and I do hope that it will
evolve significantly in some areas.
I plan to play an active role both as Chairman of this
Committee and as Chairman of the Subcommittee on Transportation
Appropriations to make sure that transit needs are addressed in
the 2004 Budget, as well as in the reauthorization process.
I am looking forward to an active year on transit and have
already begun to lay out the groundwork for an aggressive
series of hearings at the Full Committee on reauthorization
issues.
Along those lines, I delivered a letter to the Senate
Budget Committee Chairman last week--signed by 64 of my
colleagues in the Senate--that expressed a desire for transit
funding increases in the Budget Committee's bill being marked
up this week. I understand that several Members of the
Committee may be at that markup even as we speak.
Madam Administrator, we are pleased to have you with us
this morning, and I look forward to hearing your remarks.
Senator Sarbanes.
STATEMENT OF SENATOR PAUL S. SARBANES
Senator Sarbanes. Thank you very much, Mr. Chairman.
I am going to have to depart because I am on the Budget
Committee and we are going into markup very shortly.
I want to thank Chairman Shelby for holding this very
important and timely hearing. Mr. Chairman, I just want to add
a caveat to what you said. You were pointing out the need to
have flexibility because what might work in one place might not
work in another.
Chairman Shelby. That is right.
Senator Sarbanes. I think you said, what works in
Birmingham might not work in Baltimore. But I want you to know,
I am working overtime to try to ensure that what works in
Birmingham will also work in Baltimore, and hopefully, vice-
versa.
I just wanted to bring that up.
[Laughter.]
Chairman Shelby. We want to take some of those Baltimore
projects--not theirs, but some like them--to Birmingham.
Senator Sarbanes. All right. You can put that on the
record.
[Laughter.]
Chairman Shelby. We have learned from him.
[Laughter.]
Senator Sarbanes. The Committee, as you noted, will soon be
charged with reauthorizing the transit provisions of TEA-21,
which expires on September 30. This is important to recall as
we resume our consideration of transit.
During the last Congress, this Committee, along with its
Subcommittee on Housing and Transportation chaired by our able
colleague, Senator Reed, held eight hearings on transportation
issues.
In fact, I have the hearing record here. It is quite
voluminous--I would need Senator Dodd to help me pick it up.
Senator Dodd. I thought it was his opening statement.
[Laughter.]
Senator Sarbanes. He was very relieved to find out that
that was not the case.
[Laughter.]
Chairman Shelby. If it is your opening statement, let's
make it part of the record, without objection.
[Laughter.]
Senator Dodd. It will be the record.
[Laughter.]
Chairman Shelby. Go ahead.
Senator Sarbanes. Administrator Dorn testified before us
four times in the last Congress, as well as Secretary Mineta
and others, including elected officials, business leaders,
transit operators, and riders. They gave us some very
thoughtful testimony.
I think you could sum it all up as: TEA-21 works. In fact,
the Administrator herself said to us that America's investment
in public transportation is reaping substantial benefits.
Because of the work that we all did together 6 years ago,
investment in transit has increased by almost 50 percent over
the TEA-21 period. We have seen increased ridership across the
country and improved quality of life. Transit saw the highest
percentage of ridership growth among all modes of surface
transportation in the period from 1993 to 2001, experiencing
almost a 30 percent increase. More and more communities are
considering transit investment. They perceive that it
stimulates economic development benefits.
A Dallas County Commissioner testified before us last June
that over $1 billion has been invested in private development
along Dallas' existing and future light rail lines, raising
nearby property values and supporting thousands of jobs.
Individual companies are also recognizing the value of
transit. I was very much struck by a statement by Herschel
Abbott with BellSouth testifying that his company is relocating
almost 10,000 employees from scattered sites throughout
suburban Atlanta to three downtown buildings near MARTA rail
stations, each within an easy walk of the transit station.
He listed the benefits of this plan for BellSouth. He says
that, ``it saves employees time. It saves employees money. It
saves wear and tear on the employees' spirit.'' And of course,
transit also benefits the economy in other ways as well.
Bill Millar, the President of APTA, testified, and this is
interesting because it is a point that is not often emphasized,
that ``When New Jersey builds a rail system, for example,
often, the construction is done by a company that is
headquartered in Idaho. When Texas cities buy buses, it might
be a bus company in Colorado that gets the contract.'' So while
the Federal money appears to be going to one jurisdiction, the
economic impact of it can go far and wide. Investing in transit
boosts the economy of States that are not getting the transit
money directly, and I think we need to keep that in mind.
Of course, transit also has very important quality-of-life
aspects to it. Senior citizens, young people, the disabled, and
others attain mobility that would not otherwise be available to
them. We had representatives of senior groups who were very
strong on this point because they say it gives independence to
our older citizens that they otherwise would not have.
Now, I want to look ahead for just a couple of minutes.
I share the Chairman's desire that we get the
Administration's reauthorization proposal as promptly as
possible so that we can begin the process of reviewing and
examining it.
I think from the hearings we have had, there are three
priorities which emerge clearly. First, we need to grow the
transit program. And I am very concerned that your budget
submission does not grow it for this year, and what that
implies or predicts about what is to come.
Second, we need to maintain the funding guarantees which
have been very important in enabling local and State
governments to plan effectively.
And third, we need to preserve the balance that was
established in ISTEA and then in TEA-21 between highways and
transit both in terms of overall investment levels and in terms
of Federal matching ratios for the highway and transit program.
We worked out that accommodation between highways and transit
and it has stood us in good stead. I think it is very important
to preserve that.
Obviously, there is a tremendous demand for transportation
investment. DOT has identified $14 billion per year in capital
needs simply to maintain the conditions and performance of our
transit systems. The FTA itself has come up with that figure.
Twenty billion dollars is needed to improve conditions and
service. And of course, others estimate even greater needs.
I made reference to the fact that the budget for the next
year does not even keep pace with inflation, let alone with
ridership growth. This decision essentially to flatline the
transit programs runs counter to all the recommendations that
we have received and all that we are hearing from
constituencies all across the country.
Moreover, and I have discussed this with the Administrator
before, the Administration has proposed to lower the Federal
match for New Starts transit projects, but they have not
proposed a corresponding change for highway projects.
This would run counter to what I set out as a third
priority, which is to maintain the balance between the two,
highway and transit, and not to skew decisionmaking at the
local level toward highway projects.
In fact, the Mayor of Charlotte, North Carolina, testified
at one of our hearings and I am quoting him: ``There is a
strong need to keep the program 80/20, as we do for other forms
of transportation, including roads. That does send a strong
message that transit is as important as our road network.''
The head of the Utah Transit Authority testified that his
agency would not have been able to build the first light rail
line in Salt Lake City without the 80/20 match. He says at that
time, there just wasn't the level of support needed to go at
the higher local share. He says, now that they have seen the
benefits of light rail, there is considerable demand to put
more resources into the transit program.
We worked very hard to level the playing field, and we do
not think we should put local decisionmakers back in a
situation when they are trying to decide what better serves
their purpose in terms of transportation needs where they say,
well, if we build a highway, we only have to put up 20 percent
of the money. But if we go to transit, we have to put up 50
percent of the money.
Now the argument that was made is that, we have tremendous
demands and we do not have enough resources. Therefore, we will
do 50/50 and we will be able to do more projects. But the same
rationale applies for highways as well. There is a tremendous
demand for highways that far exceeds the resources, just as is
the case with transit. And yet, there is no proposal here to
shift the highway matching ratio.
I am in favor of maintaining the 80/20 ratio for both. But
if you are going to depart from it, it should not be departed
from in one mode of transportation and not in the other,
because then you are going to get transportation decisions
based not on transportation reasons, but based on a skewed
financial arrangement. And I urge that thinking upon the
Administration.
The concepts that were contained in TEA-21 have worked. I
think that they are valid. I think they need essentially to be
carried forward into the new reauthorization. And we look
forward to working with the Administrator on this project.
Mr. Chairman, I want to also thank you and commend you for
the letter that you originated and sent to the Budget Committee
on growing the transit program. Just shy of two-thirds of the
Members of the Senate signed that letter.
Chairman Shelby. That is right.
Senator Sarbanes. I think that is some indication of the
support. Clearly, transportation generally needs more
resources. I do not know what the Administration is going to do
about that. But there is a tremendous demand and need out there
for infrastructure improvement in the transportation network,
both highways and transit. I am supportive of trying to do that
and I am supportive of maintaining the arrangements and the
linkages which have been established between highways and
transit over these last two reauthorizations.
I think it is very important that we carry those forward
into the new one.
Thank you very much, Mr. Chairman.
Chairman Shelby. Senator Chafee.
COMMENTS OF SENATOR LINCOLN D. CHAFEE
Senator Chafee. Thank you, Mr. Chairman. I look forward to
the witness' testimony, and thank you for holding this hearing.
I associate myself with your comments also, Mr. Chairman.
Chairman Shelby. Thank you.
Senator Reed.
STATEMENT OF SENATOR JACK REED
Senator Reed. Thank you very much, Mr. Chairman. Let me
begin by commending you for not only holding this hearing, but
also for the leadership you have shown. The letter that Senator
Sarbanes alluded to is a very important statement of the
commitment of so many of our colleagues to transit, and now we
have to follow through.
I am pleased that my colleague from Rhode Island is here.
We are well represented on this Committee.
[Laughter.]
And we are committed to transit collectively.
Last year, as Chairman of the Subcommittee, we held a total
of six hearings on TEA-21 reauthorization. Senator Sarbanes
indicated, we collected a voluminous record which I hope will
help guide us in the deliberations going forward.
We have had the privilege of listening to Ms. Dorn and she
has done a great job at the FTA, and we are very pleased with
your performance and your commitment to this process.
I look at the President's Budget and there are some
encouraging notes. But the overall and the most discouraging
aspect is the lack of sufficient resources to do what we all
know must be done to continue the success of transit.
There is an endorsement in the budget of the overall
structure of transit and highway programs. But there are some
issues that have been raised, Senator Sarbanes alluded to them,
about specific aspects of the funding and the support of
transit which are I think important and must be considered as
we go forward. But the
bottom line is that the $7.2 billion budget is inadequate to
meet the demand.
One of the things we heard persistently during our
hearings, and Ms. Dorn I think can verify this, is that with
resources, transit will flourish. Without resources, it won't
stay the same. It will deteriorate very quickly.
We see encouraging increases in ridership. We have seen the
testimony of business leaders, as Senator Sarbanes mentioned,
the BellSouth Company official who talked about how transit had
a remarkable impact on their business operations. Transit's
environmental benefits are something to emphasize, also.
We are looking at a reauthorization of the transit and
highway bill. Just for the record, when we passed TEA-21,
transit funding doubled and was projected to double. I do not
see that doubling in this budget. As a result of those
resources, ridership rose by 28 percent over the period of TEA-
21. That is a remarkable increase.
As I said, I am encouraged in some respects. The
Administration does appear to be committed to continuing the
flow of the gas tax revenue for transit. That is a critical
issue. That might be one of the most important fundamental
issues that we address in our deliberations.
There are some interesting proposals for reducing barriers
to small New Starts projects, for example, which we have to
consider.
But I am concerned about other aspects. I am concerned that
the Administration is proposing to turn the Bus Discretionary
Program into a formula program. I think that the Bus
Discretionary Program has done so much to increase the vitality
of our bus fleets, to lower the age of buses from 15 to 20
years, to often 3 or 4 years, on average. It is a remarkable
success.
And I am also concerned, as Senator Sarbanes is concerned,
about the match requirements for New Starts. If we do not
maintain the 80/20 split, there will be a distortion, not
caused by the value of the project, but simply by how much
money the localities can get if they have a highway project
versus a transit project. That is not a good approach to
dealing with comprehensive transit and highway issues.
One final point I want to make is, among the hearings that
we conducted last year, we had two hearings on transit
security. Administrator Dorn has shown a great sensitivity and
a great feel for assuring the safety of our transit systems.
The General Accounting Office went out and asked just eight
transit systems how much money they would need to ensure the
security of their system from some type of deliberate attack.
Their answer was over $700 million. That is just eight systems.
And the bottom line number is much greater than that.
Unfortunately, the President's Budget for the
Transportation Security Administration contains no specific
funding for transit. We just have to be realistic. Our
opponents, our adversaries are ruthless individuals who look
for the soft way in, not the hard way in.
We are spending billions to protect our air transportation
system, and if we do not commit ourselves to protecting our
transit system, I think we will regret that. And that is a
regret that I do not think any of us want to have.
Mr. Chairman, I look forward to working with you. I look
forward to the Administrator's testimony. And once again, let
me thank you, Mr. Chairman, because your leadership is
important and also, it is demonstrated by having this hearing
and your letter and I thank you for that.
Chairman Shelby. Thank you.
Senator Dole.
COMMENTS OF SENATOR ELIZABETH DOLE
Senator Dole. Chairman Shelby, I particularly look forward
to working with Administrator Dorn because we have had that
opportunity many times in the past. It has been my pleasure to
work with Administrator Dorn at the Department of
Transportation during my tenure there, at the Department of
Labor, and for part of my tenure at the American Red Cross.
And so, since she has testified many times before this
panel before I joined you, I know that I do not have to tell
you that she is an extremely able and dedicated servant of the
public, and I look forward to an opportunity to ask some
questions in a few moments.
I have a statement I would like to submit for the record.
Chairman Shelby. We will make it a part of the record.
Senator Dole. In the interest of time, I am going to put it
into the record.
Chairman Shelby. Senator Schumer.
STATEMENT OF SENATOR CHARLES E. SCHUMER
Senator Schumer. Thank you, Mr. Chairman. And I thank you
again for holding this hearing, and for your tremendous
leadership on this issue. We really are very grateful to you
for that.
I also want to thank Administrator Dorn for coming before
the Subcommittee, and also for proposing in the budget MTA's
East Side Access Project. They are going to receive a full
funding grant in fiscal year 2004. It is to connect the Long
Island Railroad to Grand Central Station. It enjoys broad
bipartisan support in New York, and it is essential to the
continued economic growth of the New York City region.
You just cannot get another train under that East River,
and that is holding back growth because both Long Island and
New York City job markets, until recently, have been growing
and will be growing again, we pray. And so, we are going to
need this very, very much. It is the project I think that New
Starts was made for and I look forward to working with you and
the Administration on its success.
Now, I am quite aware, as we all are, that the Nation faces
large deficits--the war in Iraq, urgent homeland security
expenses. But I still believe strongly that we cannot neglect
our transportation infrastructure, which is essential to the
Nation's long-term economic growth.
As I know the Administrator knows, because she is so
capable, and I appreciate my colleague from North Carolina's
praise of her and I think we all concur. The demand for transit
has never been greater. This is not one of those flat growth
areas.
As you, Madam Administrator, testified to this Committee
last year, the demand for nationwide transit increased 28
percent. In my city alone, known for having an older transit
system, the growth has been even more dramatic. Ridership in
New York City increased a staggering 43 percent from 1992 to
2002. Currently, there are over 2.15 billion trips taken
annually in New York City alone, and that is not counting the
so-called suburban commuting that comes in.
So, I know that there are some that argue that the Nation's
older transit systems no longer deserve strong Federal support.
But as these numbers demonstrate, New York's ridership
continues to grow at levels comparable to the newer systems.
Given this growth by both old and new systems, I think
there is a strong need for greater transit funding. Obviously,
I share the concern of others, that the proposal to spend only
$7.2 billion, a flat funding request from 2003 to 2004, is not
adequate.
I can only hope that this budget will not be reflective of
your TEA-21 reauthorization proposal. We dramatically need to
increase transit spending, not cut it. And I hope you will be a
champion of increased funding for transit, also ensuring that
we keep a ratio of highway-to-transit funding close to 80/20,
and of continuing to adequately support older transit systems,
as well as newer ones.
Your report released in 2001 on the condition of the
Nation's transit systems states that in order just to maintain
our existing systems, we need to be spending on the order of
$15 billion this year. And yet, the proposal is for half that
amount, the Administration's 2004 Budget proposal.
If we want to maintain our existing systems and provide for
a much-needed expansion nationwide, we have to do a lot better
than $7.2 billion this year.
Federal investment in transit infrastructure is one of the
most important ways we can stimulate the economy and provide
clean, livable cities to our citizens. I look forward to
working with you to find ways to increase transit spending in
the future.
Thanks again for coming today and again, Mr. Chairman,
thank you for this hearing and for your leadership.
Chairman Shelby. Senator Dodd.
STATEMENT OF SENATOR CHRISTOPHER J. DODD
Senator Dodd. Thank you very much, Mr. Chairman. And thank
you, Madam Administrator, for being here and for your work.
I think it is important you are hearing from us. We
obviously want to hear from you as well, but I think it is very
important at a time like this that you can carry back to your
Agency and to the Administration the concerns that you are
going to hear. And unlike an awful lot of subject matters where
you will find a highly divided Committee, I think what you are
hearing here from the Chairman all the way through, with maybe
some minor exceptions, is our deep commitment.
I was struck, Mr. Chairman, I do not know if you were here,
I think it was last year when the issue came up, discussing I
think informally here on the Committee, transit issues. I
recall thinking to myself as I looked down the row of the
various Members and where they were from, I was anticipating
what I thought each Member might say about the subject matter
based on where they were from in the country, and how surprised
I was about what a different reaction we recieved.
I recall our colleague from Idaho saying, this is a very
important issue to Boise. I remember being taken aback,
thinking, I would have assumed that the Senator from Idaho
would be only talking about roads. Our colleague from Colorado,
the same thing. He said, this is a major issue for us. And on
down the Committee.
This, for years, used to be an issue of East Coast-West
Coast versus the rest of the country. And what the Chairman has
so eloquently said here this morning is this is no longer the
case, that transit is really a major issue for almost every
State.
Nevada is the most urbanized State in America. We
traditionally would think of it as a rural State in the West.
But, in fact, of course, with the populations in Las Vegas and
Reno, it is highly urbanized.
It is very important I think and I appreciate your
listening to us and I apologize that we are all taking a little
bit of your time to share our thoughts, but sometimes having
the ability of listening to our concerns and where we stand on
this, particularly since there is as much unanimity as there
is, I thought might be of some value for you. Some of this will
be repetitive, but I just wanted to share a few thoughts with
you.
As has been said here, ridership across the country and the
new programs developed by local leaders in response to local
needs are changing the way in which we think about community
transportation services.
Today, transit doesn't necessarily mean, as you have heard,
waiting on a city corner in New York or Boston or Hartford or
Providence, or riding on a city bus any more. It doesn't
necessarily mean waiting on a crowded platform to get on a
subway car.
For many Americans, transit now means they have access to a
wide range of community-based services, including services like
dial-a-ride to help an elderly person get to a grocery store,
the job access program to help get working Americans from their
homes to their jobs even when they do not live in the city. Or
with an established route bus program. Transit is changing to
meet the needs of more Americans in more communities in more
parts of the country than ever before.
There are now nearly 6,000 transit systems in the United
States. And it is not just the 10 or 15 big systems that we
hear so much about. And the operators of the Nation's 6,000
transit systems are doing a tremendous job making life better
for those who ride transit and for those who do not.
According to the Texas Transportation Institute, the annual
economic loss to the United States caused by traffic congestion
is
almost $68 billion. And believe me, as you know, Madam
Administrator, in the area of Fairfield, Connecticut, for
instance, and my colleague from Rhode Island can testify to
this because we share Route 95 coming through our two States,
God help you if you get caught in lower Fairfield County. And
it used to be just during rush hour. Now it is almost any time
of day. It is literally a parking lot. It has affected
commerce. It has affected everything in that northeast
corridor, that tremendous bottleneck that occurs as a result of
the congestion that has been mounting up.
An additional $20 billion would be lost if the United
States' transit commuters drove instead of rode on transit
systems. In other words, our transit programs are functioning
as critical parts of the largest surface transportation system.
It is no longer a question of whether we should build more
highways and more transit. We must do both because it is now
clear that transit is contributing to the efficiency of a
deeply interconnected whole and unified transportation network.
As I look at the FTA's budget proposal, I must tell you,
Madam Administrator, like the Chairman and like others, I am
concerned about it. We all know the pressures. We all know what
is looming in costs and so forth. But this is such a critical
piece of our economic growth and development.
At a time when transit ridership is growing, and you heard
the testimony of others already, at about 3\1/2\ percent a
year, the FTA has recommended no additional resources for
transit at this time. At a time when the need to relieve
highway congestion is so critical, the Administration appears
to be proposing that we take away one of the most effective
congestion mitigation tools.
What is more disturbing is that FTA has recommended major
changes in the programs that have been functioning so very,
very well. It seems to me that the proposed flatline funding
combined with unnecessary changes could prove disastrous for
the traveling public, especially in smaller urban and rural
communities, such as the State the Chairman is from.
I note that the programs slated for elimination or
significant changes are those that are often relied upon by the
small- and medium-sized transit operators.
The Administration is proposing, for example, completely
eliminating the Bus Discretionary Program and moving the bus
money to the New Starts Program.
In my view, that is likely to put small communities in
direct competition against large transit properties in a way
that may reduce the rich variety of services that have been
emerging over the last decade.
We should be encouraging transit innovation in our less
densely populated communities, and I do not see how making in
my case a man in Connecticut, a rural or suburban community,
and Boulder, Colorado, compete against our Nation's largest
transit districts under inflexible criteria is going to
encourage innovation or improve services.
The Administration is also recommending significant change
to the Job Access and Reverse Commute--the JARC Program. The
Administration wants to convert this program from a competitive
grant program administered at the local level to a formula
program administered at the State level.
Again, this program, JARC, has been a model of transit
innovation, even in States that haven't historically been
thought of as transit-dependent. JARC is improving lives and
local economies, smaller communities across the country, and I
am not convinced that we should radically change the program's
design. Indeed, if we do anything, we should be trying to
figure out how to build on JARC's success. I understand that
there have been concerns about the earmarking of JARC funds.
But block-granting, we know all too well, these rural, less
politically influential communities do not do well at the State
level when it comes to the allocation of funds. And too often,
they get short-changed if we do not pay attention to them.
So, I am hoping that you will be thinking that through and
realizing, but for us, a lot of these rural smaller communities
would lose out at the block funding approach at the State
level.
Finally, I want to comment on the Administration's proposal
to eliminate the Transit Clean Fuels Program. This was another
innovative initiative started under TEA-21.
I think it is unfortunate that Congress has never funded
this program and I regret that the Administration has decided
to back away from this effort, especially in light of the
President's recent commitment to develop hydrogen-powered
automobiles through a Department of Energy program.
In my view, the Nation's transit agencies should be leading
the way toward clean fuel implementation and given the looming
problem in the Middle East, we may be wishing we had some
program like this to minimize our dependency on a very troubled
area of the world. The FTA should not be retreating, in my
view, just as the technologies are being developed.
We, in Connecticut, have several striking examples of
successful clean fuels initiatives, including a bus initiative
currently operating--at a profit, I might add--by the Greater
New Haven Transit District and a planned fuel cell bus rapid
transit line in Hartford, Connecticut. In Connecticut, we
believe that clean fuel technology is the future of
transportation and we are ready to embrace that future now.
As the reauthorization debate continues, I hope that the
Administration will consider its position on transit clean fuel
technologies and other matters that I have raised.
We are very fortunate, indeed, to have as the Chairman of
the Full Committee, the person who is also Chairman of the
Subcommittee dealing with these issues.
It is going to be I think important for us here to be
talking about this, and I appreciate the Chairman's request to
get some sense of authorizing proposals so that we can go to
the Appropriations Committee with a clear direction of where we
in this Committee, charged with the business of overseeing
urban mass transit, can have a benefit.
I see my colleague from Utah arriving. And by the way, what
great news from your State last night. I just cannot tell you
how that brightened up an otherwise gloomy picture as we look
toward the next few weeks or days in front of us, to hear what
a wonderful job the people in Sandy, Utah--I even know about
Sandy, as you know. My wife is from Utah. I cannot tell you how
excited we were to hear about the good news for the Smart
family.
But also, Salt Lake is an urban area. Transit issues are
critically important. So, you are going to hear from all of us.
And unlike the days when we were competing up here about
transit dollars, I think you know this, and I am preaching to
the choir because I know how much you care about it, you are
going to hear from all of us up here today how important these
issues are.
I apologize, Mr. Chairman, for taking a little additional
time, but this is an issue that really does deserve the
attention of the full Congress.
Thank you.
Chairman Shelby. Senator Bennett, do you have anything?
COMMENTS OF SENATOR ROBERT F. BENNETT
Senator Bennett. Thank you, Mr. Chairman. I just want to
welcome the Administrator. As Senator Dodd has indicated, we
have a transit program in Utah, a combination of buses and
light rail, which is doing extremely well.
Since you represent FTA now, FTA institutionally has been
enormously helpful. And we can report to you and to the
Congress that ridership is higher than the most optimistic
projections. Even those who grumbled and complained that it was
going to be snail-rail and it was going to be a tremendous
boondoggle have to grumpily admit that revenues are higher,
ridership is higher.
And, interestingly enough, because of the increased
ridership, the subsidy per rider on light rail is about half of
the subsidy per rider on buses. This indicates that light rail
indeed has a great future if it is done right. And I
congratulate the people of Utah for doing it right. But
obviously, they could not do it without the support of the FTA.
I appreciate your being here and look forward to your
testimony.
Chairman Shelby. Administrator Dorn, your full statement
will be made a part of the record in its entirety. You may
proceed as you wish.
STATEMENT OF JENNIFER L. DORN
ADMINISTRATOR, FEDERAL TRANSIT ADMINISTRATION
U.S. DEPARTMENT OF TRANSPORTATION
Administrator Dorn. Thank you very much, Mr. Chairman And I
do appreciate the passion and the support of the Members of the
Committee for transit and am eager for us to have a more
fulsome discussion about a number of the proposals.
I would mention that FTA is in a relatively unique position
vis-a-vis the reauthorization proposal because many of our
proposals for reauthorization are, in fact, embedded in the
budget.
So, we have the luxury of being able to talk about things
in a programmatic way, as well as in a budgetary way today. It
is a great opportunity for me, and thank you for providing it.
I recognize fully that resource adequacy is fully in the
eye of the beholder. I think it is important that we not lose
sight that in the President's Budget is a record level of
funding for transit, positioned to grow 26 percent over the 6
years.
In the face of enormous and costly challenges, particularly
the fight against terrorism and protecting the homeland, as was
referred to by Senator Dodd and others, the Fiscal Year 2004
Budget signals the high priority that President Bush and
Secretary Mineta place on our national transportation system
and on public transportation particularly. I think it is a
prudent balance of priorities at a very difficult time and I
fully support the President's Budget for fiscal year 2004.
Last April, I testified before the Committee regarding the
success of TEA-21 and the opportunities we envisioned to build
upon that success. And foremost among these was providing
stable, dependable funding streams for transit. I have heard
that over and over from the stakeholders at State and local
levels. It is nearly as important as the amount of resources.
Dependable formula funds and full-funding grant agreements for
New Starts have significantly improved the ability of transit
agencies to finance, to plan, and to execute projects to
produce real results for the transit-riding public. As I
indicated then, and I fully believe now, stable formula funds
help agencies do more with limited resources because they give
financial markets the confidence to support transit
investments. They give communities an incentive to commit long-
term resources, and they give community developers the
confidence that the transit commitments necessary to support
new development will be honored.
It should come as no surprise to this Committee, therefore,
that our budget reflects a significant shift away from the
uncertainty--and that is the key problem, in my view--the
uncertainty of discretionary grant programs, and moves them
toward more predictable formula-based and multiyear funding
programs. Compared to the recently enacted 2003 Budget, the
President's Proposed Fiscal Year 2004 Budget would increase by
nearly 20 percent the formula-based transportation funding for
rural communities.
We know, and as the Chairman so aptly stated, we need to
help address the transportation needs in 40 percent of the
communities that have no public transportation, and become more
responsive to the increased needs of rural areas who already
have some level of service.
We are eager to fund the transportation component of the
President's New Freedom Initiative as a formula program to
States. We want to provide increased transportation services to
better meet the needs of persons with disabilities who are of
working age and who are able to work, but one of their most
significant barriers to becoming a full participant in the work
force is transportation. That is a very important Presidential
initiative.
We also increase by 21 percent transportation funding for
an expanded New Starts Program, so that current full-funding
grant agreements can be honored, meritorious projects in the
pipeline can be funded, and a broader spectrum of cost-
effective--and I want to emphasize that--cost-effective
transportation projects can be accommodated.
Through these formula funds and multiyear agreements, we
will put public transportation dollars to work equitably
throughout the Nation and, importantly, at community
discretion. The more we can get the funding decisions made
closest to the customer, the better decisions they often are.
In my written statement, you will find more specific
information about changes we are proposing to preserve the
viability of the mass transit account of the Highway Trust
Fund. I would just comment that the Administration believes
that funding transit through the gas tax revenues is an
appropriate vehicle to support public transportation.
I have also outlined, in more detail, how we propose to
ensure that New Starts projects are cost-effective and are best
suited to community needs, how we seek to improve local
communication and coordination and decisionmaking regarding
service to the elderly, persons with disabilities, and low-
income populations, and how we propose to improve transit
planning in communities and in States throughout the Nation.
There is nothing more important to good transit investments
than to have a good plan, to have that coordinated at the local
level, and to be able to provide transportation for more
services and more riders.
I would like to provide, rather than speaking to those
details, just a couple of points about the overall goals that
have driven the development of this proposal.
At a time when it might have been easier to say ``things
are working well enough'' or ``do not rock the boat,''
Secretary Mineta told me to think boldly--as he did in the
ISTEA and TEA-21--to think boldly about how we can make sure
that public transportation works and grows in every community.
We believe the fundamentals are definitely in place through
ISTEA and TEA-21. We propose some changes that are outlined in
our proposal. This is a result of literally hundreds of
meetings with transit stakeholders who said TEA-21 and ISTEA
have made very important and fundamental changes in how we do
business. We think we need to make some improvements and we
tried to respond to those comments.
First and foremost, we are proud that this budget proposal
promotes common sense transit solutions. To accomplish this
goal, we propose to reduce the number of different program
``silos.'' That is why we want to formularize all programs,
except New Starts, so that States and localities have the
flexibility that they need to fund local priorities, as
Chairman Shelby mentioned. Instead of trying to match projects
to specific pots of money, we want States and
localities to be able to base their transit decisions on
maximizing mobility and creating seamless community
transportation networks. That is what it is going to take to
grow this program.
Second, consistent with the President's call for customer-
focused, outcome-oriented Government, our budget proposal
includes a new ridership-based performance incentive program to
encourage A-plus performance in transit. The outcome in transit
is more riders, and we want to incentivize all of our grantees
toward producing that result.
Third, this budget reflects the President's and FTA's
determination to keep our commitments, especially to the people
who most depend on public transportation for mobility. By
sustaining the Federal funding at the TEA-21 record-high
levels, we will be able to continue to provide stable,
predictable formula funds to urbanized areas, increase funding
for underserved rural areas, honor our multiyear funding
commitments under the New Starts Program, and, perhaps most
importantly, improve services to the elderly, low-income, and
persons with disability through coordinated planning,
predictable funding, and working together with our counterparts
in Health and Human Services and the Labor Department. They
provide significant dollars for transportation, although not
always in a coordinated fashion with us at the local level, the
State level, or the Federal level.
Finally, this budget supports the President's effort to
champion independence and economic opportunity for all
Americans. It proposes the creation of a new formula program,
as I mentioned, the President's New Freedom Initiative,
providing $145 million for new transportation services to those
who can be more fully integrated into American communities and
the Nation's workforce. Further, our proposed 20 percent
increase in funding for rural communities represents a
downpayment on our commitment to basic mobility.
Mr. Chairman, I do believe this is a responsive and
responsible budget proposal. I appreciate the opportunity to
discuss its elements and those elements that relate to
reauthorization and their connection to the budget.
Thank you.
Chairman Shelby. I am concerned about the cost overruns in
the projects under the FFGA's and the cost of general service
delivery. Could you articulate further your view of the Federal
role in transit and what principles are guiding you in your
reauthorization proposal? For example, I am interested to know
why you believe that distributing Federal transit dollars based
on formula, essentially going out on auto-pilot, would allow
the Federal Government to maintain any role in containing
costs?
Administrator Dorn. A number of good questions there.
First of all, with respect to oversight of capital
projects----
Chairman Shelby. Right.
Administrator Dorn. --I believe that the FTA has one of the
best oversight and partnership programs with transit agencies
of any in Government, and we are working to improve that.
Chairman Shelby. What about the San Juan project? That is a
troubled project, isn't it?
Administrator Dorn. It was a troubled project, but it is
moving forward very aggressively to be on track. And both the
Inspector General and I personally have increased our
vigilance. They have turned around a number of management
problems.
I am proud to say that the vast majority of the full-
funding grant agreements which the FTA has executed have been
on time and on budget. I think there are a number of areas
where the transit agencies and the FTA seek to improve our
cost-estimating and the kind of benefits that we are proposing.
We are very vigilant about making sure that the bar is set
at the right level for investments, and we will continue down
that path.
Chairman Shelby. On the San Juan project, we are sending
some staff from this Committee, authorizing Committee, and also
the appropriations transportation, to see what is really going
on down there. I am sure they will coordinate that with you
because that is one of the most troubled projects that we have,
I think. I wouldn't say the only one, but it is one.
Administrator Dorn. I think that there have been
significant problems in the past. That project is 90 percent
complete. And when it is complete, it will take 120,000
passengers daily. So, I look forward to the completion of an
excellent project. But you are correct. It has had significant
troubles in the past.
With respect to the issue of bus discretionary funding, I
think there is some misunderstanding with respect to that
amongst some of our stakeholders.
We have learned from the State and local funding partners
through ISTEA and TEA-21 that few things are more valuable than
predictability of funds.
But the problem is that nothing is more unpredictable than
an earmark. That is how 100 percent of the Bus Discretionary
Program has been utilized. The problem is that then local
communities cannot count on it from year-to-year, and that
tends to skew their decisions about longer-term investments.
There are serious trade-offs in this, and sometimes even the
winners tend to be losers because they do not know if they are
going to get an earmark the next year.
We feel that if funds are distributed based on proportional
levels of needs through a formula, they can make good
investment plans and good investment decisions. And in fact,
they can use that predictability to secure grant anticipation
revenue bonds, et cetera.
We feel that more and more money granted through formula,
as long as it has the appropriate caveats, will be an asset to
the local communities.
Chairman Shelby. You recently signed a full-funding grant
agreement with the New Orleans Regional Transit Authority,
which would provide an 80 percent Federal share for their Canal
Street Corridor Project. At the same time, your budget proposes
a statutory change to raise the local commitment to a 50
percent match. How do you reconcile this inconsistency? You
have just done that and now you are proposing this 50 percent
match, which most of us are going to oppose.
Administrator Dorn. So that is a no-win question.
Chairman Shelby. True.
[Laughter.]
Administrator Dorn. Okay. Let me take it on.
Senator Dole. Tell us why we shouldn't do that.
[Laughter.]
Chairman Shelby. I am just seeing what you did and then
what you are proposing and there is a big inconsistency.
Administrator Dorn. Yes, a very appropriate question,
Chairman Shelby.
The full-funding grant agreement which I just signed for
New Orleans at the 80 percent level is one of the last
remaining projects--in fact, the last remaining project--
against which the Federal Government had made a long-standing
commitment. That has been in the works for a number of----
Chairman Shelby. We are not against that. We just want to
know about the inconsistency.
Administrator Dorn. I understand. It was a promise made a
number of years ago. The local community continued to plan that
project based on that promise and the continued working
relationship with them.
It is one of the minority projects that has been funded at
the 80 percent. It is a New Start, one of the first New Starts.
It was this Administration's belief, therefore, that we needed
to give advanced notice on 50/50. So in the Fiscal Year 2000
Budget, the Administration said, 2 years hence, 50/50 would
come into play. And so, we believe it is very important that
that kind of advanced notice be provided and that is why we are
supportive of that.
I would just like to make one other comment about the 50/50
proposal. There are some uniquenesses with respect to transit
and highway projects. Senator Sarbanes is very correct when he
talks about the traditional match of 80/20 for highways, as is
the case for the vast majority of funds that we spend in
transit. It is 80/20. However, in the New Starts proposal,
which is only about one-sixth of our budget, we believe that
the proportion of New Starts funds should be 50/50.
Chairman Shelby. Why?
Administrator Dorn. There is every opportunity for a
transit agency to use formula funds, or to use CMAQ funds or
STP funds, to bring that match up to an equitable 80/20. Over
the past number of years, in fact, the flex funds that have
been used going from highway to transit has been about $1.2
billion annually.
So the issue of the alleged inequity between highway and
transit I think is modified by that piece.
Chairman Shelby. Did you make that promise to anyone else
other than New Orleans?
Administrator Dorn. To my knowledge, no.
Chairman Shelby. Okay.
Administrator Dorn. And there are certainly no projects
forthcoming at that level.
Chairman Shelby. Have you thought about, if we were to go
with a 50 percent funding match, which I hope we never do, that
it would probably exclude a lot of communities that might not
have the revenue base to get to 50/50. It looks like the
program would just be weighted toward the more affluent
communities in the country that could match on a 50/50 basis. I
think that it might defeat your whole purpose of a widespread
transit system all over America.
Administrator Dorn. That certainly is not our purpose or
our goal. And in fact, we do not have evidence to suggest that
a 50/50 share requirement would dampen interest in the New
Starts development process. The pipeline is bursting and we
want to fund more projects.
States and localities are now understanding the value of
transit investments. So, we believe that this would allow us to
spread the dollars more adequately. And also, the additional
benefit is that the more that a local community gets behind a
project and they have a stake in it, the more carefully they
plan the execution of that project.
Chairman Shelby. Well, we differ on that issue.
Senator Dodd.
Senator Dodd. Thank you very much, Mr. Chairman. I think
the Chairman is going to have some allies on this issue.
Administrator Dorn. I understand that.
Senator Dodd. Let me just say, for clarity purposes and I
do not want to spend a lot of time on this, but actually, I see
this as a flatline budget. It is the same budget that was in
the 2003 request.
Now, we have made those across-the-board cuts. So if you
are using that as a baseline, then, obviously, you can make an
argument for an increase. But the budget request for 2003, the
budget that was adopted by the House of Representatives, is
almost
exactly the same budget that is being made this year. Is that
not the case?
Administrator Dorn. That is the case.
Senator Dodd. So, you have some increases here that you
have talked about, various programs. Tell me quickly what is
being cut to pay for those.
Administrator Dorn. What is being cut is--primarily, what
we are doing is allocating the former Bus Discretionary
Program, 50 percent of it to New Starts, so we can add money
there, 30 percent to urbanized formula, and about 20 percent to
rural formula.
So, overall, the pie is about the same. We are suggesting
that we need to distribute it in a different fashion primarily
by formula.
Senator Dodd. So that is where the cuts are coming from, by
moving it from that--
Administrator Dorn. From the Bus Discretionary Program,
that is correct.
Senator Dodd. And are you planning on a certain amount of
cuts occurring as a result of the block grants occurring so
that there won't be as many of the dollars getting back to
local communities?
Administrator Dorn. No. In fact, just the reverse. I
believe that you mentioned the JARC Program, the Job Access
Program.
Senator Dodd. I am going to ask about that.
Administrator Dorn. We think that has been a very effective
program and it has now moved beyond the model or demonstration.
It is only now in a couple of hundred communities.
What we would suggest that we do is take an allocated piece
of money--I believe it is $150 million--and disburse it by
formula, by income level, census data, et cetera, to all the
States, so that all the States would be able to use that model
and replicate it.
We agree with you, Senator, it is a very important program
that has done a lot for communities and we would like to
replicate it.
Senator Dodd. I appreciate that. But I do not see where
that grows. I do not see any growth in that budget.
Administrator Dorn. There is not a growth in the JARC
Program, that is correct.
Senator Dodd. Considering now that we just lost some of the
300,000 jobs, people are going to be looking--it seems to me,
given the increasing unemployment rate in the country, having a
program that would really assist people to be able to get to
jobs they might not otherwise be able to get to under a transit
program, would fit in very nicely with our efforts to get
people back to work.
Administrator Dorn. I agree with that. And our proposal and
our perspective is that every State has a low-income population
that has those needs, and we would like to see those
opportunities spread farther than in only a handful of
communities.
Senator Dodd. Yes. Well, from my point here, that is one
area where I would like to see some increase and some support
for it.
Let me ask you quickly about two programs. First, about the
New Freedom Initiative Program. I commend you for this one.
This is $145 million to improve mobility options for persons
with disabilities. My only concern here is how will the
Department of Transportation eliminate any duplication of
efforts where there may be some in this area? Have you thought
about that?
Administrator Dorn. Definitely. We think that this arena of
providing opportunities for the disabled to get to work is a
new focus area that really needs to be targeted.
And so, that is why we have proposed a separate program.
But the way we have structured it, because it is given to the
State level, we have encouraged cooperation and coordination so
that there need not be duplication. In other words, what we
want to make sure is that the intended purpose of this $145
million for New Freedom is, in fact, accomplished. But the way
that it is administered, it gives a lot of opportunity for
local communities to sit down, as they have done in the JARC
Program, and sort out who does what and how we could eliminate
some of the duplication.
We think that it is a real opportunity to serve this
population and to serve this population with our colleagues in
Health and Human Services, et cetera.
Senator Dodd. And just one last question, on the Clean
Fuels Program, again, you have the President in the State of
the Union, he talks about hydrogen-fueled cars.
Here we have efforts out there being made to eliminate this
program at a time when we may be watching gasoline prices go up
through the ceiling, rates we have never seen before, or
haven't seen in years.
It seems to me, in this one area, given the importance of
the cost of fuel and so forth, here is one way to really save
some money, promote alternative fuels. Environmentally, it
makes a lot more sense. Why would you even be thinking about
eliminating a program that is as potentially beneficial as
this?
Administrator Dorn. Well, I totally agree with the spirit
and the focus of your remarks. And the transit industry has
been very aggressive about trying to be cleaner.
The Clean Fuels Program was recommended 6 years ago. And
since that time, there have been important advances and
requirements in the bus industry which make the program much
less necessary; in fact, not necessary.
Currently, every standard transit bus that is purchased is
either alternative fuel or clean diesel. In addition to the
fact that, as you pointed out, the Congress has decided not to
fund that program, and fold it into the bus discretionary, and
since we are making such significant progress with respect to
all bus purchases being either clean diesel or alternative
fuels, it has just outlived its useful life. However, I totally
accept the spirit and the goal that you have mentioned.
Senator Dodd. I suspect, Mr. Chairman, we will be coming
back to this idea as well to try and promote it a little bit
further. But I appreciate that.
Chairman Shelby. We certainly will.
Senator Dodd. Thank you.
Chairman Shelby. Senator Dole.
Senator Dole. Transit certainly, in my home State of North
Carolina, is a very important issue. I want to applaud the
Administration for recognizing that transit investment is
indeed about serving people. This is certainly the clear
intention of the creation of the performance incentive grants.
Would these incentive grants be awarded for an increase in the
percentage of ridership or would it be based on an overall
number of new riders?
Administrator Dorn. Very good question. The performance
incentive that we have in mind, Senator Dole, is to be based on
a percentage. And also, we would size the awards based on the
size of the agency.
So both of those elements would protect the integrity of
what we are trying to do, which is to increase performance in
every transit agency in terms of increased ridership.
Senator Dole. I continue, Administrator Dorn, to be
concerned about the vulnerabilities of our public transit
system to attack. What do you see as the FTA's role in
transportation security now that the Transportation Security
Administration has been moved to the Department of Homeland
Security?
Administrator Dorn. Thank you for the question. Very
important area that I have worked on with Senator Reed, as
well.
We have a very cooperative and committed working
relationship, with TSA. We are both focused on making transit
safe and secure, and in fact, it is more secure than it has
ever been. We have some work to do, as all sectors of the
economy do with respect to that.
The TSA has been very focused on helping establish the
priorities among transit sectors about threats and
vulnerabilities and what kind of assistance we might be able to
give. They have been helping us leverage the research dollars
from other departments in terms of some of our chem-bio
activities, et cetera. And of course, they are responsible for
setting appropriate standards across the industry, and we have
been working very closely with them in that regard.
FTA has been concentrating on the things that we do best:
Training, making sure that employees are trained as well as
they can be, front-line employees as well as supervisors; we
work very hard to ensure that every community, large or small,
has a good emergency response plan that is hooked in with the
fire, the police, and the emergency responders; and we are
focused on ensuring that public awareness is really at a high.
Those are the kinds of technical assistance efforts that we
have provided. We have provided them at no cost to the transit
agencies because we know how stretched they all are in this
arena.
Senator Dole. Going to the 50/50 cost share that you
propose, according to an April 2002 GAO report, this 50 percent
cap would result in slightly over $1 billion that would be
allocated to other programs. Does FTA agree with this estimate?
Administrator Dorn. We would have to look through the
record to make sure that that is an up-to-date estimate, but it
certainly is hundreds of millions of dollars that could be
utilized for other cost-effective projects that receive full-
funding grant agreements.
Senator Dole. One last question. Under the budget the
Administration proposes, consolidating the myriad of separate
transit programs in order to give States and localities
additional flexibility to meet their mobility needs in their
communities, won't some States be tempted to ignore the needs
of certain user groups if they can shift funds amongst the
various programs they administer?
Administrator Dorn. We are making every effort, and I think
it is a good one and will be a productive one, to ensure that
the intended purpose is accomplished.
That approach has worked well in the elderly and disabled
program that is now administered by the States, and we will
insist that funds for the other programs--New Freedom
Initiative and the JARC Program be utilized for the intended
purpose.
But there are a lot of ways that other agencies and other
local providers might be able to consolidate their efforts, so
that they could provide more service and more riders in that
intended arena.
It is a good question, though.
Senator Dole. Thank you very much.
Administrator Dorn. Thank you.
Chairman Shelby. Senator Reed.
Senator Reed. Thank you, Chairman Shelby, and thank you,
Madam Administrator, for your testimony.
So much of what you are proposing rests on formulas rather
than discretionary funding. Could you provide the Committee
formula runs that compare the Fiscal Year 2003 Appropriations
bill with your proposed 2004?
Administrator Dorn. Absolutely. I would be happy to provide
that for the record.
Senator Reed. Thank you very much.
And in a similar vein, could you provide the Jobs Access
Reverse Commute funding each State would receive under the new
formula approach versus the appropriations approach.
Administrator Dorn. Yes. That may be slightly delayed. The
JARC piece, we are now determining how that formula would be
based. But we will send the first point out and then as soon as
we complete the formula recommendation for the JARC, we will
send that up as well.
Senator Reed. Thank you, Administrator.
Just returning again to an issue that has been discussed,
and that is the 80/20 split. It has been my understanding in
talking to my transit and highway officials in Rhode Island,
that, interestingly enough, a lot of the flexibility in ISTEA
has benefited transit, that money has flowed to transit.
I think, as a starting principle, one reason is because
they will get the same reimbursement from the Federal
Government if they make a transit investment or if they make a
highway investment. And when they look at the needs, they say,
oh, we need transit.
Now, I think the reality, under your budget proposal, is
they are going to look at a highway program and it is 80
percent and they are going to look at a transit program, and it
is 50 percent. And they are going to say, wait a second. It is
a more important program, but we do not have the resources.
And I think also, in the context of what I have been
listening to in terms of State budgets, is that they are just
scraping to come up with any money to keep their programs
going.
Again, it seems to me that this proposal will distort and
inhibit a lot of the progress we have made, not just in transit
funding, but also in overall intermodal transportation
planning.
Administrator Dorn. I respect your view. I tend to
disagree, and that certainly is not the purpose.
We believe that there are a number of cost-effective
projects out there and we are eager for communities to have
transit that makes sense to them.
I think I would probably have to agree to disagree on that
point. But we will make every effort to make sure that there is
a level playing field. And I think with the CMAQ funding and
the STP funding that you mentioned--which is being increasingly
targeted or transferred to FTA or transit programs--that can be
a real help in balancing that alleged inequity.
Senator Reed. Well, I guess my other response would be, do
you have any data or any indication that local transportation
authorities will start moving money from highway to transit if
the ratios change?
Administrator Dorn. The overall Federal match at this point
is about 50 percent. In addition, more and more, we have seen
that successful transit projects have bred other successful
transit projects.
In other words, States and localities have more and more
confidence that, if they plan a project well, a transit project
is a good investment. In fact, we have seen the State and local
contribution growing in proportion to the Federal in that TEA-
21 period.
So there is more and more confidence. Can I absolutely
prove it to be so? No.
Senator Reed. Well, I just recall, and we are both engaging
in some anecdotal evidence at the moment.
Administrator Dorn. Yes.
Senator Reed. I wish Senator Bennett was here because I
recall John English, the General Manager of the Utah Transit
Authority, making the point very explicitly that without the
80/20 match, they would have not been able to begin their first
phase of the light rail, which absolutely duplicates what you
have just described, a successful transit project generating
other transit projects which are supported locally much more
aggressively, which leads to a better transit solution overall.
So let's agree at this point to disagree.
Administrator Dorn. Okay.
Senator Reed. For the record, does the Administration
support maintaining the current level of gas tax receipts that
go to the transit trust fund?
Administrator Dorn. Yes.
Senator Reed. Thank you.
Getting back now to the issue of transit security and
terrorism, I know Senator Dole alluded to it also. The
Transportation Security Administration has, as I understand, no
specific line item for transit security. Are you working with
Secretary Ridge and Secretary England to try to develop a
specific program and specific resources?
I recall just a few weeks ago, one of our colleagues in the
House received some criticism by suggesting that in a major
urban area in the United States, the transit system might be
threatened. That caused a great deal of concern. But it
underscores the fact that these are potential targets. Are you
working with TSA?
Administrator Dorn. Absolutely. On a daily basis, our
staffs are working together.
A specific transit allocation of funding is not in the plan
at this point. One of the key advantages of having TSA as a
part of the President's Homeland Security Department, as
approved by the Congress is that they will now be able to
prioritize the threats and vulnerabilities.
Certainly, the data that we have as a result of doing 37
threat and vulnerability assessments throughout the country has
been shared with TSA. That represents our perspective on where
the threats and vulnerabilities are and where the needs are.
As TSA works through the relative priorities, I hope and
expect that those needs will be adequately considered.
Senator Reed. Thank you, Administrator. Once again, I thank
you for your cooperation, your assistance, and your dedication.
It is a pleasure working with you.
Administrator Dorn. Thank you.
Chairman Shelby. Senator Bennett.
Senator Bennett. Thank you, Mr. Chairman. I will be
unusually brief here because I sit with you not only on this
Committee, but also on the Transportation Subcommittee on
Appropriations. So, I want to be very careful that I am in tune
with you all the way through.
[Laughter.]
Chairman Shelby. Senator Bennett and I have been together
on a lot of these issues.
Senator Bennett. On a lot of these issues.
Chairman Shelby. Especially that Salt Lake City project.
Senator Bennett. That is correct.
Administrator Dorn. Right. Good project.
Chairman Shelby. It was. Funded, I believe, 80/20.
Senator Bennett. Yes.
Chairman Shelby. It might not have been built if it was 50/
50.
[Laughter.]
Senator Bennett. That is correct. And I would note for the
record that, a propos of the Chairman's earlier questions, it
came in under budget and ahead of time. It was opened weeks, if
not a month or so, prior to the anticipation, and it did come
in under budget, both in the primary----
Chairman Shelby. If Senator Bennett would yield. Maybe the
Administrator could use that project comparative to the others
that get in trouble, that some stay in trouble, as an example
of what to do and what not to do.
Senator Bennett. Frankly, I think there is a great deal
that could be learned out of the Utah experience. Not only with
respect to transit, with I-15, where we did a design/build
circumstance on our highway, and again, came in under budget
and ahead of time and surprised everybody. A project that
normally would take 9 years was completed in 4 years.
That is another subject. But as long as we are bragging
about Utah, I will take the opportunity to do that.
You know the appropriators are going to have heartburn
about the discretionary bus circumstance.
Administrator Dorn. I understand.
Senator Bennett. And I won't grill you on that in any
greater degree, except to suggest to you that you be sure your
justification for that is well-prepared and well-presented.
You obviously do that generally. But this one is the one
where most of the bullets are going to be placed, along with
the 80/20, 50/50 controversy.
We will be looking for more justification there perhaps
than you might normally prepare because appropriators do not
like to see these kinds of things get changed along the way.
Administrator Dorn. I understand.
Senator Bennett. So that is my only counsel to you. I am
delighted with your service. Glad you are here.
It is fun to watch a former Secretary of Transportation
deal with transportation issues from this side of the dias.
Thank you again.
Chairman Shelby. Senator Carper.
COMMENTS OF SENATOR THOMAS R. CARPER
Senator Carper. Thank you, Mr. Chairman. And welcome. Thank
you for being with us again today.
Just refresh my memory. What is the Federal gasoline tax?
Is it about 18 cents?
Administrator Dorn. It is 18.4 cents. And transit gets 2.86
cents of that.
Senator Carper. I do not mean to put you on the spot, but
in terms of history of the level of the gas tax and what was
attributed or apportioned to transit, do you have any
recollection of what it has been for the last decade or so?
Administrator Dorn. It was 80/20, 80 highway and 20 transit
has been the division since 1982.
Senator Carper. All right. Thank you. And Senator Reed
asked a question I think about the Administration's position
with respect to resources, I think through the gasoline tax. I
thought I understood you to say that the Administration was
asking for no change. Did I misinterpret that?
Administrator Dorn. That is correct. It was my
understanding that there was some concern whether or not it was
appropriate to fund transit from the gas tax receipts. And I
answered in the affirmative. The Administration believes that
that is an appropriate funding mechanism.
Senator Carper. Are you hearing from anyone in the
Congress, the House or the Senate, that more monies are needed
for highways and for transit? Are you hearing that at all?
Administrator Dorn. Yes.
Senator Carper. Does the Administration have a view on
that?
Administrator Dorn. We believe that given the various and
important challenges of this Administration and this country,
that the level is appropriately set in the President's Budget,
yes, Senator.
Senator Carper. Before I worked here in this job, I used to
be Governor of Delaware. From time to time, we would raise or
talk about raising the gas tax. We actually raised it I think
once in the 8 years I was Governor.
I come from a school that is old-fashioned. I think if
programs are worth having, we should pay for them. If they are
not worth having, we shouldn't have as many of them as we
otherwise might like to have. And we will have an interesting
debate here in the months ahead over what level of resources we
actually need for highways, for bridges, and for transit, and I
hope for rail as well.
There is a program that I think is designed to affect small
cities, maybe transit-intensive cities. I have a question I
want to ask about that. What kind of cities are involved in
that? What kind of city do you have to be in order to fall into
this category?
Administrator Dorn. You have to have a really excellent
transit project. That is the first piece. But what we are
seeking to do in the President's proposal is to expand the
eligibility for the major capital infrastructure piece, the New
Starts piece.
We believe that there are lots of opportunities--
particularly for smaller and growing cities, but not
necessarily only them--to be able to have a cost-effective
transit solution without having a fixed-guideway. In other
words, you do not need a rail in order to have a cost-effective
kind of proposal and project. So, we are expanding the
eligibility and increasing the funds for that pool. It is not
allocated based on a formula. It is based on a good plan and
proposed locally, proposed alternative to build a project that
makes sense for that community.
We have had a number of communities who have come to us
with a proposed light rail, for example, when what they really
want to do perhaps is a bus rapid transit. But they have to
follow the path of the money. And the money says it has to be a
fixed-guideway.
Our proposal suggests that we broaden the eligibility.
Senator Carper. All right. Some of these questions have
already been asked. It is tough when you get here this late.
We have another hearing going on in the Environment and
Public Works Committee that focuses on CMAQ and on conformity.
Administrator Dorn. Yes.
Senator Carper. I apologize for not being here for the rest
of the hearing and to hear what was asked of you and what you
said.
With respect to flatlining of certain programs, I
understand that FTA freezes funding for programs such as the
elderly and disabled, for Job Access and Reverse Commute
Program.
We are very much involved all over the country in welfare
reform. As an old Governor, I got to be the lead Democratic
Governor on welfare reform within the NGA and worked to
implement welfare reform in my own State as our Chief
Executive.
One of the programs--there are really four things that I
always found that you needed in order to help move people from
welfare to work and to stay off of welfare.
One, you need a job. Two, they need a way to get to the
job. Three, they need some help with their child care. And
fourth, if you expect people to leave welfare and lose their
health care, they are not likely to stick with that for long.
In my own State, and I think in other places around the
country, the Job Access and Reverse Commute Program has been
really an important part of welfare reform. I just want to
know, why don't you put more resources into a program like
that, that has a proven track record--we have plenty of people
who are still on welfare and we are trying to help them move
off.
And I think as time goes by, what we are trying to do is
instead of using our Federal tax dollars to give people cash
welfare checks, what we are trying to do is to provide supports
around them so that the work actually pays more than welfare.
Administrator Dorn. You make a very good point, Senator. I
think that the JARC Program has been a very successful
approach. We are eager to expand the opportunity for other
communities throughout the Nation to emulate that approach. And
it is a holistic one, as you mentioned, the job, how to get
there, the child care, the health care, et cetera, all very
important.
In terms of funding levels, it is a matter of priorities
and trade-offs. And yes, this is a current services level
budget.
We believe that our proposal and how we would administer
the program provides a lot more opportunity for coordination
amongst other agencies who have, in effect, mega-bucks to do
transportation, and we haven't always hooked in with them.
So, we have smoothed the way, I believe, for the State-
administered piece of that program to be able to pool some
resources from HHS and from Labor programs, so that we can
provide transportation more efficiently and to more riders.
It is a current services level, but we do provide
opportunities for better coordination so that we can get more
services to more riders. I am hopeful that the JARC model will
be used for a number of other areas, like elderly and disabled,
as well. And you are right, it is a very good program.
Senator Carper. Mr. Chairman, I would just say to my
colleague, Senator Bennett, it used to be in Delaware, people
would show up at the welfare office and say, I would like to
sign up for welfare and get a check. They do not do that much
any more. They come to the welfare office and we say, how would
you like to go to work? The same is probably true in your State
as well. And people say, I do not know how to get to work. I
have a tough time getting to work. This program is actually
quite helpful in enabling people not just to receive and be on
the dole from all of us, but to actually become self-sufficient
and stay there.
Thank you, Madam Administrator.
Chairman Shelby. If there are no further questions, we want
to thank you for your appearance today and thank you for
waiting on us while we had the votes.
Administrator Dorn. Thank you. No problem.
Chairman Shelby. We look forward to working with you where
we can. But we do have some problems, as you notice from the
hearing today, especially that funding formula.
Thank you.
Administrator Dorn. Thank you, sir.
Chairman Shelby. The hearing is adjourned.
[Whereupon, at 11:45 a.m., the hearing was adjourned.]
[Prepared statements, response to written questions, and
additional material supplied for the record follow:]
PREPARED STATEMENT OF SENATOR ELIZABETH DOLE
Thank you, Mr. Chairman. I would like to express my appreciation
for your holding this hearing today. Today, the U.S. transit system
faces tremendous challenges which we must address as we seek to protect
both our citizens and the American freedom of movement. Since the
tragedy of September 11, we have looked to our transit system not only
for transportation but also as an evacuation system and as a highly
vulnerable asset to terrorist attack. We are all in agreement that we
should have the safest, most secure transit system possible since this
system is essential to the proper functioning of our economy.
Our transportation system is the backbone of our communities, one
which we must continually maintain and improve upon so that our
communities can properly function and grow. This budget contains a
number of new initiatives which seek to assist communities which have
not traditionally been served by Federal transit funds. I especially
note the higher priority the Administration has placed on rural public
transportation; an area which I believe has been too long overlooked.
Our rural populations have long been challenged by a real lack of
public transportation. In fact, 40 percent of rural counties have no
public transit today and this is especially true for southern and
western States. This is an area which deserves attention and I applaud
the Administration for taking steps to address this problem.
In addition, I want to complement the ``small start'' initiative in
this budget. This recognizes that there is a difference between large
and small transit projects by
creating an option for smaller projects which may suit a community's
needs better. Unfortunately, I believe that the current program has
inadvertently created an incentive for communities to build transit
based on available funds--not based upon what their needs are. The
proposed less complicated rating process would go far to correct this
problem.
North Carolina is truly an up and coming State in public
transportation. Our communities are taking a fresh look at public
transportation as solutions to problems we face with growing congestion
and mobility issues. With this increased interest from within the State
and my background in transportation, I look forward to working with all
my colleagues as we move to reauthorize the TEA-21 law. In addition, I
especially look forward to working with my old friend Administrator
Dorn and thank her for taking time out of her busy schedule to join us
here today.
Thank you.
----------
PREPARED STATEMENT OF SENATOR JON S. CORZINE
Mr. Chairman, thank you for calling this hearing to discuss the
Administration's proposed budget for the Nation's mass transit needs in
the next fiscal year. I welcome Federal Transit Administrator Dorn
today and look forward to her testimony.
Mr. Chairman, I have strong doubts that the budget that the
Administration has proposed will be sufficient to meet the needs of our
Nation's transportation infrastructure. The challenges posed by
increased traffic congestion, poor air quality, and an aging road,
rail, and bridge network require a strong level of financial commitment
from the Federal Government. Unfortunately, I cannot find that level of
commitment in this proposal.
With regards to the Administration's 2004 transit proposal, I am
equally disturbed by the levels, Mr. Chairman. The Administration has
proposed a Fiscal Year 2004 Mass Transit Budget that is $7.2 billion.
That is the same as the Administration's Fiscal Year 2003 Budget
request and the same as the Fiscal Year 2003 Omnibus Spending bill that
recently passed both Houses of Congress and was signed into law by the
President. When you factor in the 2 percent rate of inflation that the
Administration projects, it means that then the Administration is
proposing a 2 percent cut for transit.
Additionally, there are other aspects of the Administration's
transit proposal that I also find disturbing. For example, the
Administration proposes a 50 percent cap on Federal funding for New
Starts projects. I am afraid that this will have a negative effect on
States and localities that do not have the extra funding to pay for a
New Starts rail projects. And because the Administration does not
propose a similar cap on highway projects, States and localities might
be forced to have to choose highway projects over mass transit
projects.
I am also disturbed that the Administration proposes to end a key
bus program--the Bus Discretionary Program--and use part of the funding
to help pay for New Starts. In these tough economic times, we should be
doing all we can to provide opportunities for bus travel. By using some
bus money for New Starts, we are robbing Peter to pay Paul.
Finally, I would like to take a moment to mention Amtrak. The
Administration proposes $900 million for Amtrak for fiscal year 2004.
Amtrak's President David Gunn has said that if he does not get $1.8
billion for fiscal year 2004, Amtrak will shut down operations. We
narrowly averted a shutdown in the last Congress, Mr. Chairman. It
disturbs me that we are again playing a game of chicken with the fate
of Amtrak in the balance. My State relies on Amtrak more than any other
State. If there is a shutdown, it will result in not only the ending of
Amtrak's operations in New Jersey, but also the ceasing of many of the
operations of New Jersey transit trains that share the same rail
network. Seventy-five percent of all NJ Transit commuters--82,000
people--would have to find another way to get to work.
I understand that the Administration's proposal is subject to
change. Congress will establish different and hopefully higher highway
and mass transit levels for each of the next 6 years. I look forward to
doing this as a Member of the Banking Committee.
Thank you.
----------
PREPARED STATEMENT OF SENATOR TIM JOHNSON
As we work to develop a bill this year on transit funding, I want
to work with the Committee to address the needs of rural States like
South Dakota. While the transit program will and should always have a
considerable focus on big cities, rural transit is an area that needs
more attention.
Transportation is a fundamental concern in rural America. In every
aspect, including highways, public transportation, freight movement,
air service, and other needs, the vitality of rural areas depends on
viable transportation infrastructure.
The focus of transportation in States like South Dakota is centered
correctly on highways and roads. But rural States have unique transit
concerns that are not fully addressed. Rural States do receive funding
guarantees. However, while 32 percent of the Nation's population lives
in rural areas, only 4.2 percent of the Federal Transit
Administration's annual budget is devoted to rural transit.
South Dakotans rely heavily on transit. When the populations of
Sioux Falls and Rapid City are taken out of the equation--about one
quarter of South Dakota's population--2.1 million people use rural
transit in my State annually. For a State with such a small population,
this is an astounding number. When Sioux Falls and Rapid City are added
in, it demonstrates the importance of transit in South Dakota. We have
some very low-density areas in our State and yet they need adequate
transit service, particularly for senior citizens and the disabled.
Currently, all of the longstanding pressures on rural transit are
being compounded by higher fuel and insurance costs. The State of South
Dakota came up with over one-half million dollars to fund rural transit
last year in addition to the one-half million already committed by the
State. With a drought and a slow economy, South Dakota does not have
the resources to do that this year.
An adequate investment is required to provide service to meet
essential needs. In particular, an adequate level of service is
required to provide transit for senior citizens and the disabled to run
errands, go to the doctor, and attend to other daily routines.
Providing sufficient transit needs would allow residents to live in
their homes, remain independent, and not feel forced to go into
assisted living. To address this, I am interested in providing each
State with a specified minimum level of funding for key programs. It
should be considered in a transit reauthorization bill, so that the
unique needs of rural areas are met.
Last year, I cosponsored S. 2884, which provided a reasonable floor
per State under the funding level for the rural program, for the
elderly and disabled program, and for small metro areas. Senators
Allard, Crapo, Hagel, and Enzi are Members of this Committee who also
cosponsored that measure. That bill also clarified the ability to use
elderly and disabled program funds for operating assistance and would
increase the Federal match for operating costs in the rural program.
Western States do not have transit match parity with highways, as the
highway match in western States is over 80/20 due to the Federal lands
adjustment in the highway program. This adjustment should also apply to
the transit program, at least for the rural program, the elderly/
disabled program, and small metro areas like Sioux Falls and Rapid
City.
S. 2884 did not address overall funding levels or how funds should
be divided between urban and rural areas. I want to work with Chairman
and Ranking Member on this matter. I believe that the key concepts I
and others advanced last year should and can be accommodated into our
work this year, including: Creating
reasonable per State minimums for the rural, elderly and disabled, and
small urban area programs; and modernizing the transit matching ratios
to address operating and Federal lands issues.
I look forward to working with all my colleagues to improve rural
transit as part of this important legislation.
----------
PREPARED STATEMENT OF JENNIFER L. DORN
Administrator, Federal Transit Administration
U.S. Department of Transportation
March 13, 2003
Mr. Chairman and Members of the Committee, thank you for the
opportunity to testify today in support of the President's Fiscal Year
2004 Budget proposal for the Federal Transit Administration (FTA). We
are looking forward to working with this Committee and with Congress to
achieve the goals outlined in our budget request. This budget request
reflects a number of important elements of the Administration's
reauthorization proposal for surface transportation programs, and I am
pleased to be able to discuss those with you today.
The President's Budget is good news for all of us who care about
public transportation. In the face of enormous and costly national
challenges--fighting terrorism, protecting our homeland, and promoting
economic growth--the Fiscal Year 2004 Budget signals the high priority
that President Bush and Secretary Mineta place on our national
transportation system. I am especially proud that they support
sustaining the record $7.2 billion in Federal investment in public
transportation proposed by the President and enacted in the Fiscal Year
2003 Budget.
Public transportation offers a variety of benefits to communities
and to the Nation. It contributes to a healthy economy, ensures
community mobility, reduces congestion, helps conserve energy, and
helps protect the environment. I believe that this budget proposal,
particularly when combined with other reauthorization proposals, can
position transit to achieve tremendous success in 2004 and beyond.
Furthermore, as illustrated in the recently released Conditions and
Performance
Report, this budget, with equal participation from States and local
communities, will keep America on track not only to maintain our
transit infrastructure at its current ``good'' average rating, but to
improve it as well.
Predictable Funding
Last April, I testified before this Committee regarding the success
of TEA-21 and the opportunities we envision to build upon that success.
Foremost among these was providing stable, dependable funding streams
for transit. Dependable formula funds and full funding grant agreements
have significantly improved the ability of transit agencies to finance,
to plan, and to execute projects that produce real results for the
transit-riding public. As I indicated in my testimony last April,
stable formula funds help agencies do more with limited resources
because they give financial markets the confidence to support transit
investments; give communities an incentive to commit long-term
resources; and give community developers the confidence that the
transit commitments necessary to support new development will be
honored.
It should come as no surprise to this Committee, therefore, that
our budget reflects a significant shift away from the uncertainty of
discretionary grant programs to more predictable formula-based and
multiyear funding programs. In particular, when compared to the
recently enacted Fiscal Year 2003 Budget, the President's Proposed
Fiscal Year 2004 Budget would:
Increase by nearly 20 percent (up $55 million) formula-based
transportation funding for rural communities to help address
transportation needs in the 40 percent of rural counties that
currently have no public transportation services.
Fund the transportation component of the President's New
Freedom Initiative ($145 million) as a formula program to States in
order to provide increased transportation services to better meet
the needs of persons with disabilities.
Increase by 21 percent (up $263 million) transportation
funding for an expanded New Starts Program so that current full-
funding grant agreements can be honored, meritorious projects in
the pipeline can be funded, and a broader spectrum of cost-
effective transportation projects can be accommodated.
Increase by 22 percent (up $16 million) formula funding for
State and metropolitan planning, technical assistance and training
in order to help States and
communities take full advantage of recent advances in
transportation planning technology.
Through these formulae and multiyear merit-based programs, we will
put Federal public transportation dollars to work equitably throughout
the Nation, rather than in only half of our States and urban
communities who receive bus and bus-related discretionary funds by
earmark each year.
Reauthorization Concepts Reflected in the Fiscal Year 2004 Budget
Predictable funding is but one of the important goals of the
programmatic changes proposed in the President's Fiscal Year 2004
Budget. As we developed the budget proposal, we were mindful of the
fact that it represents what will be the first year of the reauthorized
surface transportation act. In anticipation of this, the 2004 Budget
requests reflects the budgetary foundation for the new legislation that
will authorize these programs for the next several years. While the
final details of the reauthorization proposal are still being cleared
within the Administration, there are a number of concepts reflected in
our budget that I am pleased to be able to share with the Committee
today.
First and foremost, we are proud that this budget proposal
promotes common sense transit solutions. We know that this is what
American taxpayers want and expect of public transportation, and we
want to help every community deliver on this promise. To accomplish
this goal, we propose to reduce the number of different program
``silos'' and formularize all programs except New Starts, so that
States and localities have the flexibility they need to fund local
priorities. Instead of trying to match projects to specific pots of
money, we want States and localities to be able to base their transit
decisions on maximizing mobility and creating seamless community
transportation networks.
Second, consistent with the President's call for customer-focused,
outcome-oriented Government, our budget proposal includes a new
ridership-based performance incentive program to encourage A-plus
performance in transit. The program will be relatively small the first
year--$35 million in urbanized areas and approximately $3 million in
rural areas. Nevertheless, it will encourage States and urban areas to
institute the data collection necessary to measure performance, and
focus attention on the issues that matter most to riders and potential
riders.
Third, this budget reflects the President's and FTA's determination
to keep our commitments, especially to the people who most depend on
public transportation for basic mobility. By sustaining Federal funding
at the TEA-21 record-high levels, we will be able to continue to
provide stable, predictable formula funds to urbanized areas, increase
funding for underserved rural communities, honor our multiyear funding
commitments under the New Starts Program, and, perhaps most
importantly, improve services to the elderly, low-income, and persons
with disabilities through coordinated planning and predictable funding.
Finally, this budget supports the President's efforts to champion
independence and opportunity for all Americans. It proposes the
creation of a new formula program as part of the President's New
Freedom Initiative, providing $145 million for new transportation
services to help persons with disabilities have the opportunity to
become more fully integrated into American communities. Further, our
proposed 20 percent increase in funding for rural communities
represents a ``downpayment'' on our commitment to basic mobility for
all Americans.
Sustaining the Mass Transit Account of the Highway Trust Fund
Before I review the specifics of FTA's budget proposal, I would
like to briefly comment on the issue of split-funding transit programs
from the Mass Transit Account and the General Fund. Historically,
approximately 80 percent of the funding for transit programs has been
provided from the Mass Transit Account, with the
remaining 20 percent coming from the General Fund of the Treasury. This
80/20 funding split was carried through each FTA program.
Under current accounting practice, FTA's split-funded accounts are
drawn-down (or outlayed) immediately and placed in the General Fund.
This results in the premature draw-down of the Mass Transit Account,
and would, if left unaddressed,
result in the depletion of the account by 2007.
The President's Fiscal Year 2004 Budget proposal addresses this
issue by funding as many programs as possible from a single source,
while maintaining the overall approximate proportion (80/20 percent) of
funding between the Mass Transit Account and the General Fund. In
particular, we propose to fund formula programs and research activities
entirely from the Mass Transit Account; to fund the FTA Administrative
account entirely from the General Fund; and to split-fund only the New
Starts Program. By minimizing the number of split-funded accounts, we
significantly reduce the premature draw-down of the Mass Transit
Account, thus avoiding the depletion of that account.
Urbanized Area Formula Programs
Under the President's Budget proposal, urbanized areas will have
increased flexibility and more predictable funding. By folding a
portion of the former Bus Discretionary Program into the formula
program, we propose to ensure that every community can count on a share
of these funds each year.
You will note that we propose to move the Fixed Guideway
Modernization Program from the Capital Investment Grant Account to the
new Formula Grants and Research Account. In doing so, we do not propose
to change either the funding level for this program or the formula used
to distribute these funds. However, we will accomplish the important
goal of increasing local flexibility and administrative ease in the use
of these funds from year-to-year. As you may be aware, some communities
find that their need for Fixed Guideway Modernization funds can vary
substantially from year to year, and the priority they give to other
investments also varies. We propose to give communities the flexibility
to merge Fixed Guideway Modernization funds with their regular
urbanized area formula grant, so that they can make more prudent, cost-
effective investment decisions each year. In 1 year, for example, they
may choose to invest more in buses; while the following year, they may
require a larger expenditure on rail modernization projects. We believe
that local decisionmakers should have the flexibility to make long-term
investment plans that are not driven by the old programmatic silos.
Furthermore, by funding these programs from the same account, a grantee
can submit a single application for bus or rail ongoing capital needs
and preventive maintenance.
Finally, with regard to urbanized area programs, I would like to
highlight our proposal to create a new performance incentive program
that will reward those communities that focus on the customer and prove
their success in increasing ridership. Participation in this program
will be voluntary, and a portion of the Fiscal Year 2004 funds will be
available to establish data collection efforts and baseline
measurements of ridership among the elderly, persons with disabilities,
and low-income individuals. Our intent is to ensure that the ridership
incentives do not adversely affect service to these important
constituencies.
New Starts /Major Capital Investments
The President's Budget proposes to increase the New Starts Program
by 21 percent ($263 million) over the recently enacted Fiscal Year 2003
amount. This growth is important for two reasons. First, it ensures
that we will be able to meet the commitments made under existing full-
funding grant agreements and fund the most meritorious projects in the
New Starts pipeline. Second, it is critical to achieving our goal of
promoting common sense transit solutions. This increase will permit us
to fund cost-effective nonfixed guideway transportation corridor
solutions, as well as the fixed guideway projects authorized under
current law. With today's technology--particularly bus rapid transit--a
fixed guideway is not always necessary to create a cost-effective major
new or expanded corridor system. Currently, however, by making the
inclusion of a fixed guideway a fundamental requirement for a New
Starts grant, we encourage communities to consider only these more
expensive alternatives. Further, some small and medium-sized
communities that would benefit enormously from the creation of new
transit options simply cannot generate enough new riders or travel-time
savings to justify a more expensive fixed guideway system. I also want
to assure the Committee that we will work closely with you and with all
of our stakeholders to ensure that, as we make room for these cost-
effective nonfixed guideway transit solutions, we do not compromise the
intent of the New Starts Program.
In the context of this change, I would also note that we are
proposing two additional modifications to the New Starts Program. As
you know, under current law, any project requesting less than $25
million in New Starts funds is exempt from the rigorous New Starts
evaluation and ratings process. Unfortunately, experience has
demonstrated that early project estimates can be inaccurate. On
numerous occasions, project sponsors who intend to seek funds without
participating in the project evaluation process suffer serious setbacks
when they determine that they do, in fact, require more than $25
million in New Starts funds. Moreover, small projects that proceed
without adequate attention to ridership and financial projections may
find themselves in financial difficulty. Therefore, we propose to
eliminate the $25 million exemption in the New Starts Program. Under
our proposal, any project that seeks Federal New Starts funds will be
required to participate in the New Starts evaluation and rating
process. At the same time, we recognize that the complexity of New
Starts projects can vary considerably. Therefore, we are proposing that
projects
requesting less than $75 million be subject to a simplified evaluation
and ratings process. We would utilize the same evaluation criteria
established by Congress for projects seeking more New Starts funds, but
develop a less complicated measurement and ratings system for these
``small Starts.''
As we enter the next reauthorization period, there are more active
New Starts projects than ever before. This undoubtedly reflects the
value that communities place on major transit investments to address
mobility and congestion issues, and our budget proposal is responsive
to this dynamic.
State-Administered Programs
This year, you will find a new line item in the FTA budget--State-
administered programs. Like the urbanized area programs, we are
proposing to allocate the nonurbanized area share of the bus program by
formula instead of unpredictable discretionary grants. We believe the
increased stability and predictability of funding that this change
produces will make it easier for States to plan for public
transportation investments and to leverage Federal dollars. The
uncertainty of continued funding for a program has turned away many
private funding partners and human service agencies who seek some level
of certainty of funding from year to year.
In addition, we are proposing to allocate by formula to States all
of the funds for transit programs that should be closely coordinated
with human service programs in a State. Our proposal will continue the
Elderly and Persons with Disabilities Program that is currently
administered as a formula program to States, and it will create a
similar formula allocation of funds for the President's New Freedom
Initiative. In addition, it will make the Job Access and Reverse
Commute (JARC) Program a State-level formula program. Currently, JARC
is administered as a national competitive discretionary grant program,
and, typically, many projects are earmarked in appropriations
conference committee reports. The Job Access Program has proven its
effectiveness, and should now be made more widely available.
We believe it just makes common sense:
To give States predictable levels of funding for all three of
these programs.
To give States the tools to leverage their human services
transportation funds with their public transportation funds.
To let each State work with its urban and rural communities to
establish funding priorities. The key role of the State in
selecting projects would remain as it is today, but State decisions
would be based on local community priorities.
Non-Urbanized (Rural) Formula Program
Over the last year and a half, you have heard me say a number of
times that I hoped to increase funding for rural public transportation.
The Fiscal Year 2004 Budget makes good on that promise. This budget
proposes a nearly 20 percent increase, or $55 million, in funding for
the rural formula program. This is over and above the rural share of
bus money and RTAP funds that have historically gone to rural areas. It
is a real increase in the funds available to rural areas in the formula
program. It is needed, and it will be well-utilized, particularly if
Congress accepts important program changes reflected in the President's
Fiscal Year 2004 Budget.
In addition, as we have proposed in the Urbanized Area Program, we
are proposing the creation of a performance incentive program for rural
areas. The program will be voluntary, but we believe that it will not
only generate a new focus on transit customers and their needs, but
also spur the development of a more rigorous transit database for rural
areas.
And, finally, like the urbanized areas, States can now count on
predictable levels of formula funding for rural areas from what used to
be the Bus Discretionary Program. We believe this will help every
community by allowing them to make common sense decisions about longer-
term transit investments, and not skew those decisions because of the
uncertainty of funding.
Other State-Administered Programs
Similarly, we have proposed programs for persons with disabilities
and for low-income individuals that will provide predictable formula
funds to be administered by States, as the Elderly and Disabled Program
is now. Specifically, we propose to provide $145 million for new
transportation services to help persons with disabilities access
opportunities and services in their communities--a critical component
in achieving the President's goal of fully integrating persons with
disabilities into American life.
With this additional program, along with the formularization of the
JARC Program, we will not only keep our commitment to, but also will
improve services for the elderly, low-income individuals, and persons
with disabilities. The absence of predictable funding has frustrated
many States that want to leverage other transportation resources
provided at the State level through such health and human service
programs as Medicaid. In one Northeastern State, for example, the State
Department of Transportation knew it had a solution to helping
thousands of welfare recipients who could work, if they could just get
to work. The State could make its program funds go twice as far if they
could get a Job Access grant from FTA, matching it with State Temporary
Assistance to Needy Family (TANF) funds for transportation services.
But could they assure their State Human Services colleagues that the
Job Access funds were really coming? In fiscal year 2002, JARC projects
were earmarked in law, and this particular State project was not among
them. As a result, the State Department of Human Services obligated its
funds to other services.
Even with predictable funding for these important services, we know
that finding solutions that work is not always easy. So to help ensure
that communities can make informed decisions about priorities and
needs, we are also increasing the funds available for planning,
administration, and technical assistance. We want the coordinated
health, human service, and transportation planning that has been so
successful in the Job Access Program to become a common practice in
every community. So, we are also proposing that communities establish
community-wide funding priorities and a coordinated plan for services
to the elderly, persons with disabilities, and low-income populations.
These plans will give each community more control over its transit
planning--and also make it easier to avoid the creation of costly,
duplicate transportation systems. And, as long as the funds are used to
serve the intended populations, we intend to ensure that the
flexibility to leverage the funding for all of these programs exists.
The bottom line is that we want to promote common sense solutions--
solutions that will save money, and will result in more and better
service to more riders.
State and Metropolitan Planning
Good planning is critical to every transit program. That is why
the President's Budget proposes a 22 percent increase in planning funds
for State and Metropolitan Planning Programs in this budget. Not only
do we increase funding for basic planning activities, but we are also
creating, in conjunction with the Federal Highway Administration, a new
Planning Capacity Building Program to provide funds for improving State
and local planning methods and technical capacity. Over the last
several years, there have been a number of advances in transportation
planning--new modeling techniques, technology-based forecasting, and a
variety of new planning tools. We want to help all communities take
advantage of these important advances.
Conclusion
Mr. Chairman, in summary, the President's Fiscal Year 2004 Budget
proposal lays the groundwork for a reauthorization plan that will build
upon the success of ISTEA and TEA-21. There are, of course, many
details and additional proposals that are not directly related to the
budget, and we look forward to a full discussion of those proposals
with you and Members of this Committee when the Administration releases
its legislative package. In the meantime, I would be pleased to answer
any questions the Committee may have with regard to the Fiscal Year
2004 Budget.
RESPONSE TO WRITTEN QUESTIONS OF SENATOR SHELBY
FROM JENNIFER L. DORN
Performance Incentives
Q.1. The President's Budget includes a recommendation for a new
performance incentive program. How will the program work? Would
you distribute these awards on a percentage basis or on overall
ridership gains?
A.1. The performance incentive funds in the Urbanized Area
Formula Program (Section 5307) will be apportioned using an
administrative formula based on the percentage increase in
ridership and accounting for the size of the community. The
formula may also take into consideration the efficiency of
service provision in the urbanized area. In order to qualify
for the incentive, transit systems must ensure that levels of
ridership among elderly individuals, individuals with
disabilities, or low-income persons are not negatively
affected. Because not all systems currently collect data on
ridership by these specific populations, a portion of the
incentive funds will be made available for enhanced data
collection in the initial years of the authorization period.
Because rural transit systems tend to focus their services
largely on these ``transit dependent'' populations and have
less administrative capacity, the incentive funds for the
Nonurbanized Area Formula Program (Section 5311) will be
distributed based on increases in overall ridership. The
incentive formula may take into consideration efficiency of
service in the nonurbanized areas in the State, as well. The
entire amount available for incentives in fiscal year 2004, and
a portion of the funds in the next 2 years of the authorization
period, will be made available to the States to establish data
collection systems, since rural ridership data is not currently
reported to the National Transit Database.
The FTA plans to consult broadly and seek public comment on
options and plans to implement the performance incentive
program prior to implementation.
New Starts
Q.2. You have testified on numerous occasions that the New
Starts Program is oversubscribed. Why not attack the problem of
over-subscription by only funding those projects that get a
``highly recommended'' rating or tighten the requirements for
awarding an FFGA?
A.2. While I have indicated that there are more projects in the
New Starts ``pipeline'' than ever before, I would not
characterize the New Starts Program as ``oversubscribed.''
Projects that receive a ``recommended'' rating in the FTA's
rigorous New Starts evaluation process have shown themselves to
be meritorious. A ``highly recommended'' rating merely
distinguishes certain projects as exceeding the standard for a
``recommended'' rating. Rather than simply funding only
``highly recommended'' projects, we believe it is more
appropriate to continue to refine the New Starts evaluation
process to more fully capture and measure the transportation
and economic benefits of proposed projects. In doing so, the
FTA and Congress will be able to distinguish among projects and
choose the most meritorious.
Q.3. What additional measures in your budget or upcoming
reauthorization proposal would inject more private capital
participation and more public-private partnerships in
developing new rail or bus rapid transit projects?
A.3. The FTA continues to encourage project sponsors to request
a Federal New Starts funding share that is as low as possible
and is seeking legislation in this year's budget and
reauthorization to limit the Federal New Starts share to no
more than 50 percent beginning in fiscal year 2004. This limit
and fiscal year 2004 effective date was first proposed in April
2001, as part of the President's Fiscal Year 2002 Budget
proposal. We believe this requirement will provide an incentive
for project sponsors to seek greater private sector
participation in their New Starts projects. Additional
information concerning reauthorization proposals to encourage
additional private capital participation and public-private
partnerships will be available when the Administration's
reauthorization proposal is officially released.
Q.4. The Fiscal Year 2004 Budget again proposes to reduce the
maximum Federal share for New Starts projects to 50 percent.
Doesn't the existing rating process already sufficiently reward
local funding participation? Why statutorily disadvantage
transit projects when compared with highway projects, which can
still get 80 percent from the Federal Government? What will the
impact be in southern and western States where local project
sponsors may not have the fiscal capacity to match the higher
level?
A.4. We do not believe that reducing the maximum Federal share
for New Starts projects to 50 percent will have a significant
effect on the ability of transit projects to compete
effectively with highway projects. The overall Federal New
Starts share for the 21 projects that have been awarded a full
funding grant agreement under TEA-21 is 56 percent.
Furthermore, projects would be able to continue to utilize
other Federal funds, including highway funds that are
``flexed'' to transit, to cover up to 80 percent of the total
project cost. In fact, between 1998 and 2002, $7.1 billion was
transferred from highway programs to transit projects, an
average of $1.4 billion per year.
Twenty New Starts projects located in southern or western
States were rated in the Fiscal Year 2004 Annual New Starts
Report. Of these, 13 have proposed a Federal New Starts share
of 50 percent or less; 5 have proposed a Federal New Starts
share between 51 percent and 60 percent; and 2 have proposed a
Federal New Starts share over 60 percent. The FTA will continue
to work with these project sponsors to identify ways to reduce
project costs, ``flex'' other Federal funds to the project,
and/or secure additional State or local funds, as necessary, to
lower the Federal New Starts share.
New Freedom Initiative
Q.5. Why is it necessary to create a new program in the ``New
Freedom Initiative'' for persons with disabilities when the
Elderly and Disability Program already serves that population?
A.5. The New Freedom Initiative Program is intended to provide
new transportation services for individuals with disabilities
to meet a wide variety of the unmet transportation needs not
being addressed by current services, including those provided
under the Section 5310 Program. Unemployment among persons with
disabilities is nearly 70 percent, and this population is three
times more likely than individuals without disabilities to need
public transportation services. The New Freedom Initiative will
provide transportation solutions and transportation
alternatives that go beyond the Americans with Disabilities
Act, including access to employment and employment related
services, as well as health and community services.
Bus Discretionary Program
Q.6. Aren't you proposing to reduce the amount of funding
available for bus needs by taking half of the Bus Discretionary
Program funding and moving it over to the New Starts Program?
A.6. We propose to eliminate the Bus Discretionary Program.
These funds that had been available only to selected
communities through Congressional earmarks will be used to
increase predictable formula funding and funding for the New
Starts Program. At the same time, we propose to expand
eligibility under the New Starts Program to include major
nonfixed guideway corridor-based transit improvements. This
would provide support for Bus Rapid Transit or other major new
bus systems that do not require a fixed guideway. Communities
could then consider the entire range of appropriate
transportation solutions, including corridor-based bus systems,
and become eligible for New Starts project funding.
Q.7. By ``formularizing'' these funds, aren't you implying that
there are no longer extraordinary needs requiring Congressional
action, such as responding to September 11, replacing over-age
buses, encouraging purchase of clean fuel buses, and targeting
investment to severe nonattainment areas?
A.7. The FTA believes that including the bus capital resource
in the formula programs is the best way to integrate capital
funding with the planning process and to promote sound
decisionmaking at the local level. The replacement of over-age
buses, the purchase of clean fuel buses, and the provision of
adequate maintenance facilities are routine capital needs that
every transit operator must address on an ongoing basis.
Incorporation of the bus capital funds into the formula
programs will allow every transit operator systematically plan
for and meet these major capital investment needs, without
having to rely on the uncertainties of Congressional earmarks.
With the certainty of predictable formula funds as collateral,
transit providers can not only plan their major investments,
but acquire financing to support them, as well.
An analysis of the Bus Allocations in recent years does not
support the assumption that they address extraordinary needs.
Almost half of the bus capital program has been used to
purchase buses, and 85 percent of those were replacement buses;
these are not extraordinary expenses or ones that cannot be
planned for. Only 11 percent of the program funding was used
for bus maintenance
facilities. The remaining 41 percent went to miscellaneous
other projects, including park and ride lots, terminals and
waiting facilities, bus shelters, transfer facilities, and
intermodal centers. These projects did not always represent the
highest capital priorities identified by the transit operator
in the area; in fact, some operators were unaware that funds
had been appropriated for the purpose identified.
For areas with under 200,000 population, there are
statutory provisions that permit funds to be transferred among
programs to address one-time needs. For example, a State can
reallocate funds among the small urbanized areas within the
Governor's apportionment. The funds can also be transferred
between the Governor's apportionment and the State's
Nonurbanized Area Program apportionment. Major capital needs
can also be addressed by transfers from STP or CMAQ funds to
transit use.
Bus Standardization
Q.8. Given the need to make every dollar of Federal assistance
do more in the current fiscal climate, would it make sense to
encourage greater use of standardized, performance
specifications in rolling stock purchases?
A.8. FTA's overall objective with respect to the acquisition of
new vehicles is to allow the grantee to determine the most
cost-effective solution to meet its minimum requirements. FTA
has been supportive of industry efforts to reduce vehicle unit
costs through the development of standardized bus commercial
terms and technical specifications. For rail vehicles, this
type of standardization has primarily occurred at the
subsystems and component level, such as communications
protocols, event recorders, passenger information, network
hardware and software. In addition, the FTA encourages the use
of multiple grantee rolling stock procurements, which can
reduce the cost per vehicle for participating grantees.
We believe it would be impractical to impose standards on
all transit systems or manufacturers, due to the significant
physical differences among transit systems (such as the width
of tunnels or the existence of hills), significant differences
in operational requirements between the larger urban systems
and the smaller urban and rural operators, and differing local/
State laws and regulations regarding procurements. In addition,
we are concerned that the
existence of Federal specifications could dampen innovation in
the transit industry in important areas like crash-worthiness,
brake reliability, or fuel efficiency. Furthermore, the cost of
establishing, maintaining, and enforcing Federal standards
could outweigh any cost-savings that such standards might
achieve.
Private Sector Involvement
Q.9. What in the Fiscal Year 2004 Budget provides an improved
opportunity to utilize the private sector in the provision of
transit service?
A.9. There were no specific provisions in FTA's Fiscal Year
2004 Budget proposal intended to improve private sector
opportunities in the provision of transit service; such
provisions will be part of our reauthorization proposal.
Small Transit Intensive Cities
Q.10. The September 2000 study by FTA on small transit
intensive cities required by Section 3033 of TEA-21 stated that
``sufficient issues exist to suggest that changes to the
existing Urbanized Area Formula Grants Program should be
considered to address the needs of transit agencies which
provide greater-than-average levels of transit in areas under
200,000 population. Will the Administration's reauthorization
proposal contain any proposals to deal with this issue?
A.10. The FTA has not recommended any changes to the formula by
which urbanized area funds are allocated.
Labor Protection
Q.11. Please provide an update on the status of your efforts
with the Department of Labor to work cooperatively to ensure
Section 5333(b) is not a barrier to efficient and effective
service provision.
A.11. The FTA continues to work closely with the U.S.
Department of Labor (DOL) to ensure that the labor protections
mandated by 49 U.S.C. Sec. 5333(b) are not a barrier to our
grantees' delivery of efficient and
effective public transportation services.
Since 1996, when DOL's current guidelines took effect, we
have seen a steady improvement in the administration of the
Section 5333(b) requirements. Moreover, FTA has trained DOL
personnel in the use of FTA's electronic award and grants
system, ``TEAM Web,'' which is now the primary mechanism for
FTA grantees to submit grant applications to DOL. The use of
``TEAM Web'' has enabled DOL to expedite its certifications of
grant applications. As specified in DOL's guidelines, FTA
provides technical advice and assistance to DOL with respect to
the validity of any objections to certification terms submitted
by representatives of either transit labor or transit
management. This technical assistance is also contributing to
the more efficient delivery of Federal grant funds.
In fiscal year 2002, DOL certified a total of 1,319
grant applications or amendments.
All but one of the 1,319 were certified within the 60
days contemplated by DOL's guidelines.
The average certification time was 16 days, including
those certified following referral and without referral.
The average certification time for projects referred
was 19 days from the date of referral.
The one certification that exceeded the 60-day
requirement took 63 days to permit conclusion of
negotiations by the applicant and affected unions.
A small number of applications (61) submitted to DOL did
not provide adequate information, thus DOL put them in an
``incomplete'' status until the grantees provided the necessary
information.
RESPONSE TO WRITTEN QUESTION OF SENATOR CHAFEE
FROM JENNIFER L. DORN
Q.1. How will the changes to the Urbanized Area Formula Program
affect transit funding in the State of Rhode Island, in
particular funding for new and existing bus programs?
A.1. The State of Rhode Island would receive $8,945,016 in
Urbanized Area Formula resources in fiscal year 2004 under the
Administration's proposal. This is a $101,663, or 1 percent
increase over the fiscal year 2003 enacted level. Funding for
Nonurbanized Areas in Rhode Island would increase from $320,432
in fiscal year 2003 to $466,716 in fiscal year 2004, a 46
percent increase. We believe these increases in predictable
formula funds will make an important difference in the ability
of both urban and rural operators to maintain existing services
and plan for new bus services in the State of Rhode Island.
RESPONSE TO WRITTEN QUESTIONS OF SENATOR REED
FROM JENNIFER L. DORN
Resources /Budget
Q.1. While there may be some potential for FTA to do more with
less by streamlining its procedures and the like, how do you
conform your proposed budget with the fact that the U.S. DOT
reports that it will cost $19.5 billion to maintain current
conditions and
improve transit performance and State officials believe the
same amount would be required simply to maintain conditions?
A.1. The Conditions and Performance Report makes long-term
projections of investment needs and reports a single ``average
annual'' investment requirement from all sources for the entire
20-year period. The 2002 Report estimates that the average
capital investment needed to maintain transit conditions and
performance is $14.8 billion annually. Due to a variety of
factors, including the fact that the amount of transit
infrastructure to be maintained will grow as new investments
are made, the estimated investment needs in the near-term are,
as one would expect, measurably lower than the projected
investment needs in the out-years. The model projects that, in
2004, $12.1 billion in capital expenditures would maintain
current conditions and performance.
Between 1990 and 2000, total transit capital investment
spending from all sources doubled, from $4.5 billion to $9.1
billion. The considerably faster pace of growth in local
spending drove down the Federal share of capital investment
substantially over the decade, from 58.1 percent in 1990 to
47.2 percent in 2000. FTA's Proposed Budget for Fiscal Year
2004 requests Federal capital investment funding of
approximately $7 billion. This level of Federal funding,
combined with projected State and local funds, is projected to
be sufficient to not only maintain conditions and performance,
but to begin to improve transit conditions and performance, as
well.
Q.2. The President's Budget assumes an inflation factor of 2
percent. Does your budget keep pace with that? Does it keep
pace with the demands of your projected ridership increase of
1.5 percent?
A.2. The Fiscal Year 2004 Budget for FTA sustains the record
$7.2 billion funding level authorized for fiscal year 2003 by
TEA-21. We believe that the program streamlining and
consolidation we are proposing will make Federal funding go
further to help meet the growing demand. In addition, over the
6-year life of the next authorization, the President's Budget
proposes a 26 percent increase in FTA funding over the TEA-21
guaranteed level of $36.3 billion for that authorization
period. For rural areas, our program restructuring and proposed
20 percent increase in funding from fiscal year 2003 to fiscal
year 2004 is designed to focus more resources on areas with
unmet transit needs.
The estimated average annual capital cost for the 20-year
period from 2001 to 2021 to maintain transit conditions and
performance is $14.84 billion per year (expressed in year 2000
dollars). This figure represents the investment required from
all sources--Federal, State, and local governments. This
estimated funding level would allow transit to keep the
conditions and service quality at current levels, while growing
ridership at the modest 1.6 percent per year average rate
included in the Metropolitan Planning Organizations' long-range
plans.
Q.3. During your testimony and response to questions you
mentioned that over the life of the Administration's TEA-21
reauthorization proposal that transit resources would increase
26 percent. Is that for transit alone or all transportation
activities?
A.3. The President's Fiscal Year 2004 Budget proposes transit
funding over the next authorization period (fiscal year 2004
through fiscal year 2009) of $45.8 billion. This is a 26
percent increase over the TEA-21 guaranteed level of $36.3
billion.
Transit Security and Terrorism
Q.4. It is my understanding that prior to the transfer of the
Transportation Security Administration from the Department of
Transportation to the Department of Homeland Security that the
FTA and the TSA were supposed to sign a Memorandum of
Understanding on transit security. Has the memorandum been
finalized? If not, what is delaying this agreement?
A.4. Before the transfer of TSA to the Department of Homeland
Security, FTA and the other modal administrations worked with
TSA to draft Memorandum of Understanding (MOU) that were
intended to more formally define the working relationships
between TSA and other DOT modal administrations. The Department
of Transportation is committed to maintaining a close
partnership with TSA on transit matters, and believes that
consistent collaboration and cooperation will avoid both
overlaps and gaps in our security efforts. Given the practical
working relationship that has emerged, it is no longer clear
that a Memorandum of Understanding is necessary.
Fuel Cell and Hydrogen Powered Buses
Q.5. Is there anything in the FTA's budget request for a
hydrogen fuel cell bus program?
A.5. The FTA would anticipate funding research related to
hydrogen fuel cell buses under the National Research and
Technology Program. Among the important undertakings in this
area, the FTA is working with the Department of Energy to
ensure that the research and infrastructure necessary for
fueling and maintaining fuel-cell-powered buses will help
support and augment the research and infrastructure necessary
for fuel-cell-powered automobiles and light trucks.
Rural
Q.6. Why do 40 percent of rural areas lack transit? Why don't
these States flex their Federal highway dollars to meet this
demand for transit?
A.6. Many small cities and rural counties now have viable
transit systems that provide essential mobility for riders who
are primarily elderly, persons with disabilities, and low-
income individuals. These systems also provide essential access
to medical and social services, and to jobs. The remaining
areas that do not yet have transit service include some of the
most difficult areas in which to provide service. Low
population density, far-flung regional facilities, rugged
terrain, and difficulty in securing local matching funds are
some of the difficulties that these rural transit markets face.
In addition, in the heavily auto-dependent rural culture, local
political leaders may not always be aware of the need for
transit and the benefits to the community.
States have also used flexible funds to pay for rural
transit. Since flexible funds became available in fiscal year
1992, a total of 30 States have transferred $229.1 million to
the Nonurbanized Formula Program. And flex funds accounted for
10.5 percent of FTA obligations under the Nonurbanized Formula
Program during the period 1992-2002. In fiscal year 2002, 21
States transferred a record high $42.2 million for rural
transit. Flex fund transfers continued to increase at the same
time that the guaranteed funding level for rural transit under
TEA-21 increased. These increases in funding have resulted in
making transit service more effective and more widely available
in rural areas. This success has, in turn, demonstrated the
benefits of rural transit and laid the foundation for
introduction of service in many of the remaining markets.
RESPONSE TO WRITTEN QUESTIONS OF SENATOR CARPER
FROM JENNIFER L. DORN
Budget Level
Q.1. The flat budget request submitted by the FTA for 2004
defers the necessary investment needed to meet the system
preservation requirements identified in the DOT's own
``Conditions and Performance Report.'' Won't deferring these
expenses simply add to the cost of maintaining and improving
our transit services in the years to come? As someone with
experience in dealing with Amtrak and their needs, I know the
outcome of deferring Federal support for capital investments
and I certainly hope that we would not follow a similar path.
A.1. The Conditions and Performance Report makes long-term
projections of investment needs and reports a single ``average
annual'' investment requirement from all sources for the entire
20-year period. The 2002 Report estimates that the average
capital investment needed to maintain transit conditions and
performance is $14.8 billion annually. Due to a variety of
factors, including the fact that the amount of transit
infrastructure to be maintained will grow as new investments
are made, the estimated investment needs in the near-term are,
as one would expect, measurably lower than the projected
investment needs in the out-years. The model projects that, in
2004, $12.1 billion in capital expenditures would maintain
current conditions and performance.
Between 1990 and 2000, total transit capital investment
spending from all sources doubled, from $4.5 billion to $9.1
billion. The considerably faster pace of growth in local
spending drove down the Federal share of capital investment
substantially over the decade, from 58.1 percent in 1990 to
47.2 percent in 2000. FTA's proposed budget for fiscal year
2004 requests Federal capital investment funding of
approximately $7 billion. This level of Federal funding,
combined with projected State and local funds, is projected to
be sufficient to not only maintain conditions and performance,
but to begin to improve transit conditions and performance, as
well.
Q.2. Where needs significantly exceed available funding as in
our current transit program, the ability to shift money from
one need to another is no substitute for additional resources
into the program. While I am supportive of State flexibility, I
think it needs to be accompanied by adequate resources. Could
eliminating specific program funding categories and pitting
competing programs against one another without adding more
resources lead to lower funding for important, but perhaps less
popular or glamorous, programs? How would we prevent this?
A.2. There seems to be some confusion about whether the FTA is
proposing to ``consolidate'' or ``combine'' programs for older
adults, persons with disabilities, and low-income persons. We
are not proposing a program consolidation; FTA proposes to
maintain separate programs for the Job Access and Reverse
Commute, New Freedom Initiative, and Elderly and Disabled
grants. Funding for each of these programs will be allocated to
every State by formula that includes a minimum allocation for
each program. States will allocate these funds to urban and
rural transit providers throughout the States. The funding for
each program must be used for its intended purpose.
We believe that State administration of these grant
programs will foster greater collaboration and greater
coordination with other transportation-related programs
administered at the State level, including transportation
services funded through Medicaid and the Temporary Assistance
for Needy Families Program, and result in increased
transportation services at lower cost.
Q.3. Why is the Administration allocating additional resources
in its 2004 request to the highway program, yet only
maintaining the current transit program funding levels (which
is in essence, a decrease including inflation) when we see
equally high demand for both programs? Shouldn't we grow both
programs? Or perhaps subject the highway programs to a 50
percent non-Federal match to spread Federal highway funding to
more beneficiaries in the face of such high demand? If that
makes sense for transit, why not highways?
A.3. In the face of enormous and costly national challenges--
fighting terrorism, protecting our homeland, and promoting
economic growth--the Fiscal Year 2004 Budget signals the high
priority the President places on our national transportation
system. Our Fiscal Year 2004 Budget sustains the record $7.2
billion in Federal investment in public transportation provided
in fiscal year 2003, and draws upon both the Mass Transit
Account of the Highway Trust Fund and the General Fund. Highway
funding, in contrast, is drawn solely from the Highway Trust
Fund, which can support additional spending in fiscal year
2004.
With respect to the Federal matching share, the New Starts
Program is a discretionary grant program, and as such FTA is
required by law to consider the level of local funding when
rating New Starts projects. In contrast, the Federal-Aid
Highway Program is a formula program. No Federal decisionmaking
criteria are required or applied to the distribution of these
funds. This is similar to FTA's formula grant programs that
have a statutory match of 80 percent Federal and 20 percent
local funds.
Flatlining of Certain Programs
Q.4. FTA freezes funding for programs such as the Elderly and
Persons with Disabilities and Job Access and Reverse Commute
Programs that are generally regarded as highly successful. In
my State and across the Nation, the Job Access and Reverse
Commute Program has been an essential part of welfare reform.
Without transportation, a job, health care, and child care,
welfare recipients face tremendous barriers to entering the
workforce. Why does FTA not put more resources into programs
with a record of success?
A.4. The level of funding requested in the President's Budget
for fiscal year 2004 remains at the fiscal year 2003 funding
level for the Elderly and Persons with Disabilities Program;
however, the President's proposed budget would provide $25
million more than Congress appropriated in fiscal year 2003 for
the Job Access and Reverse Commute (JARC) Program. In addition,
the President has proposed a new program, the New Freedom
Initiative, to be funded at $145 million that will provide
additional transportation services to persons with
disabilities. Furthermore, the budget proposal includes a
number of provisions that will enhance services to populations
served by these programs. FTA is proposing to distribute funds
for all of these programs by formula in order to provide an
equitable and predictable stream of funds to each State for
these purposes. States will suballocate funds for all three of
these programs based on coordinated community planning and
project proposals to ensure a collaborative approach to meeting
the needs of the populations served by these program.
We have also proposed to allow other Federal funds, such as
Medicaid and Temporary Assistance to Needy Families, to be used
to match FTA funds under each of these programs, just as the
JARC Program currently permits. We believe that this will
foster partnerships at the State and local level to plan, to
fund, and to operate services that meet the transportation
needs of the elderly, persons with disabilities, and low-income
individuals. In addition, up to 15 percent of each State's
annual apportionment can be used for planning, technical
assistance, and administrative costs to further enhance
collaboration and coordination among all relevant stakeholders.
Finally, we are proposing a funding increase of 20 percent
for the Nonurbanized Area Program. While services under this
program are for the general public in nonurbanized areas, 32
percent of the riders in rural areas are older adults, low-
income, or persons with disabilities.
Transportation Spending Creates Jobs
Q.5. It is my understanding that an investment of $23,810 in
transportation creates one job, in addition to the
infrastructure improvements that the project is creating. Using
the Administration's own inflation estimate, the cost of simply
increasing the transit program at the rate of inflation is $144
million. That $144 million would create 4,788 jobs. Why does
the Administration not support at least keeping this program
constant with the rate of inflation and in the process creating
nearly 5,000 jobs?
A.5. The current level of Federal investment in public
transportation is $7.2 billion, which represents a 56 percent
increase over 1998 funding levels. Between 1998 and 2003 the
inflation rate has been less than 1.9 percent per year, as
reflected by the Implicit Price Deflator of the U.S. Gross
Domestic Product. Over the past 6 years, public transportation
funding has increased at a much faster pace than inflation.
The President has proposed to maintain this record level of
funding for public transportation in fiscal year 2004. Given
the vast and costly challenges we face as a Nation--
particularly the fight against terrorism and protection of our
homeland--we believe that the Fiscal Year 2004 Budget signals
the high priority President Bush and Secretary Mineta place on
our national transportation system.
Small Transit-Intensive Cities
Q.6. The FTA study on the Urbanized Area Formula Program and
the Needs of Small Transit Intensive Cities that was mandated
by Section 3033 of TEA-21 identified 75 communities in 30
States between 50,000 and 200,000 population that would be
considered ``transit-intensive.'' The American Public
Transportation Association has proposed a $35 million ``tier''
within the Section 5307 Formula Program that would distribute
funds to these communities using a formula that would reward
their levels of transit intensity, as indicated in the FTA
study, compared with the average transit intensity of their
larger counterparts. Do you consider this a reasonable and
equitable solution to the significant and unique capital needs
of these communities?
A.6. FTA does not advocate a change in the formula by which
urbanized area funds are distributed. We believe current
provisions of the law provide States with the flexibility to
address any unique needs in these communities. For areas under
200,000 population, the law permits funds to be transferred
among programs to address one-time needs. For example, a State
can reallocate funds among the small urbanized areas within the
Governor's apportionment. Funds can also be transferred between
the Governor's apportionment and the State's nonurbanized area
program apportionment. Major capital needs can also be
addressed by transfers from STP or CMAQ funds to transit use.
Furthermore, changes proposed by the Administration can
provide additional flexibility and resources to meet unique
needs in these areas. Under the Administration's proposal,
States will administer not only the Elderly and Disabled
Program, but also the Job Access and Reverse Commute Program,
and the New Freedom Initiative. These funds are to be
suballocated to local areas based on need and local funding
priorities. Additionally, the Administration will be proposing
a number of changes that will simplify the administrative and
grant requirements for small urbanized and for nonurbanized
areas.
Q.7. Administrator Dorn, you have indicated your support for
program changes that would reward transit agencies that
demonstrate significant ridership increases. Is the Bush
Administration also considering ways in which to reward
communities with high levels of current service that might not
have the capacity or resources to absorb higher ridership,
particularly in areas under 200,000?
A.7. The relatively modest proposed incentive program is
intended to focus attention on the key transit outcome--
increased ridership. There are a variety of ways that
communities can improve ridership without investing in
additional capital equipment, including improvements to routes,
customer relations, route information, and reliability. While
we appreciate that some communities have higher ridership
levels than average, our goal is to encourage efforts to
improve ridership in every community. We believe current
formulas and provisions that permit the transfer of funds among
programs appropriately recognize those communities that have
higher than average transit use.
Q.8. The current FTA capital grants formula for transit
agencies serving populations over 200,000 includes incentives
for high levels of service, but the formula for urbanized areas
under 200,000 only distributes funds according to population
and population density. In the absence of Federal recognition
of the funding needs of small transit intensive communities,
how would you suggest these areas meet their current transit
needs in the face of declining revenues, and increasing rider
demand and responsibilities in areas such as handicapped
accessibility and air quality?
A.8. The Administration does not propose a change in the
funding formula for urbanized areas under 200,000. However, we
will be making proposals to streamline administrative
requirements for smaller areas to allow transit operators to
spend less time and money on administration and more on the
service provision. Our reauthorization proposal will also
include provisions to enhance coordination with human service
transportation programs and provide new sources of matching
funds, thus increasing the resources available for services to
persons with disabilities, older adults, and low-income
populations.
A number of provisions under current law provide the States
with the flexibility to balance the needs of the smaller
urbanized areas by transferring. For example, funds can be
transferred within the Governor's apportionment for cities
under 200,000 population and between the Nonurbanized Formula
Program and the Governor's apportionment. Furthermore, there is
no limit on the amount of FTA funds that can be used for
operating assistance in the small urbanized areas.
One source of funding for small urbanized areas that has
not been tapped as fully as it might be is CMAQ and STP funds
that can be transferred to transit programs. While $8.5 billion
was transferred to transit between fiscal years 1992 and 2002,
only $273.1 million of that was for cities between 50,000 and
200,000 population. In contrast, the States transferred $682.9
million for use in areas under 50,000 and $737.7 million for
cities between 200,000 and 1,000,000 population. All but three
States have made some use of flexible funding to support
transit programs.
Oversight Tools
Q.9. I am aware of the thorough rating system and other
oversight tools the FTA uses to ensure we make sound and
efficient investments in our transit system. As we look to ways
to focus our dollars on the best transportation projects
through reauthorizations of TEA-21, can these tools be applied
to help oversee spending and projects in other modes, such as
highways?
A.9. The FTA is proud of its New Starts project rating process
and its financial and project management oversight programs to
effectively manage our capital transit investments. These
activities have proven to be invaluable tools in both the
evaluation of potential funding candidates and in the ongoing
monitoring of current capital projects. An assessment of the
applicability of a similar system to the highway program would
be best made by the Federal Highway Administration.