Looming Bus Capital Crisis Fuels Fight for Dedicated Investment

Posted on October 5, 2015 by Scott Bogren

Birmingham, Ala.’s MAX has a bus capital replacement need of $29.4 million over the next four years — double what the entire state of Alabama will receive in Section 5339 funds.
Birmingham, Ala.’s MAX has a bus capital replacement need of $29.4 million over the next four years — double what the entire state of Alabama will receive in Section 5339 funds.

Buses are the backbone of America’s transit network. Each day across the country, more than half of the total transit trips are made on a bus — everything from articulated buses plying the nation’s largest cities to small body-on-chassis vehicles in small town America. In many ways, buses are the transit industry’s workhorses, reliably moving people safely and efficiently. These workhorses, however, are under serious attack.

Congressional action in MAP-21 — which was passed into law in July 2012 and remains in effect today — more than halved dedicated bus capital investment and jeopardized the ability for the nation’s public transit systems to recapitalize their bus fleets. Today, many bus operators around the nation face serious questions about how to replace their aging rolling stock.

As one leader at a large-urban transit operator told me recently on a site visit as we strolled across a parking lot at the agency’s facility: “Those buses parked over there, those are my vehicles that are old enough to vote. Those parked over there, they’re old enough to drink.”

Aging bus fleets
The looming bus capital crisis is far from a laughing matter. Aging bus fleets are less safe, cost significantly more to operate and greatly contribute to the poor community image of many transit systems.

So how did we get here? To understand how the nation’s transit industry arrived at this dedicated bus capital crisis, one must take a look at long-standing federal transit policy, and its sudden turn three years ago.

Investment in the nation’s public transit systems comes from the Highway Trust Fund, which takes in 18.4 cents for every gallon of gas Americans pump into their cars.

Approximately 20% of this total goes to fund public transportation, with the majority targeting capital and operating programs. Urban transit systems — those serving urbanized areas greater than 200,000 population — receive formula funds that are, with few exceptions, restricted to capital purchases, while the small-urban and rural formula program allows for both operating and capital expenditures.

In addition to these formula funding programs, since the early 1980s Congress had set aside investment streams dedicated to transit capital purchases. This funding program — originally known as Section 3 and then, Section 5309 — was divided into three categories: 40% for new rail starts (i.e. light-rail systems); 40% for rail modernization for the nation’s legacy rail transit operators (i.e. the NYC subway and Chicago’s El train); and 20% for bus purchases.

This arrangement survived the coming and going of such federal transportation legislation as ISTEA, TEA-21 and SAFETEA-LU. But the end of SAFETEA-LU in 2009 marked its end. The politicization and turning away from federal earmarks coincided with the end of SAFETEA-LU. That’s important because the Section 5309 program’s dedicated bus capital program — which had grown to $980 million in 2009 — was entirely earmarked by Congress. Three years of SAFETEA-LU extensions saw the Federal Transit Administration (FTA) step in to ensure dedicated federal bus capital funding with a competitive program it called State of Good Repair. But the FTA short-changed the program by one-third, shrinking overall dedicated bus capital by $300 million. Thus began the bus capital crisis.

In the spring of 2012, the Senate’s original proposal for what became MAP-21 included no dedicated bus capital program. Both New Starts and Rail Modernization (curiously renamed State of Good Repair in MAP-21 but not at all investing in buses as it previously had) — the dedicated rail capital programs — grew significantly, but bus operators were left with slight increases in the formula programs (Sections 5307, 5311) that were largely created by the bill’s rescission and re-programming of JARC and New Freedom dollars.

Flint, Mich.’s urban transit operation estimates that it spends between $35,000 and $40,000 monthly just to keep its aging bus fleet operational.
Flint, Mich.’s urban transit operation estimates that it spends between $35,000 and $40,000 monthly just to keep its aging bus fleet operational.

Advocacy collaboration
That’s where advocacy groups, Community Transportation Association of America (CTAA) and the Bus Coalition collaboration entered the picture. Bringing together rural and urban bus operators, CTAA and the Bus Coalition developed an amendment that eventually led to the creation of the Section 5339 formula bus program. It was a hollow victory, however, because the program was eventually funded at just $427 million — a nearly 60% reduction from the dedicated bus capital high-water mark of $980 million in 2009. The funding would follow the Section 5307 formula, with the exception of $1.25 million set aside for each state

Not surprisingly, this low funding level, along with the inability to compete for additional dedicated bus capital when bulk purchases or a facility was needed, posed the industry major challenges. Individual operators and states soon understood the negative impact of MAP-21 on the nation’s bus fleets.

Consider the following:

  • An (as of today) unpublished 2014 report titled, “Estimating the Long Term Impact of MAP-21 on the Nation’s Rural Transit Bus Infrastructure,” by Parsons Brinckerhoff, notes: “maintaining MAP-21 and historic funding levels [Section 5311] results in a significant degradation of the condition of the [rural public transit] infrastructure.” The same report estimates that to erase the deferred capital replacement deficit in the rural transit industry would require a one-time $700 million investment. MAP-21 offers just more than $60 million annually, thus increasing the rural transit capital deficit every year.
  • North Dakota has an estimated bus capital deficit of $9.9 million, yet the entire state receives $1.3 million annually through Section 5339.
  • Birmingham, Ala.’s MAX urban transit operation has a bus capital replacement need of $29.4 million over the next four years — double what the entire state of Alabama will receive in Section 5339 funds.
  • The State of Iowa’s rural and urban transit operators now have a collective bus capital replacement deficit of more than $125 million. Each year, Section 5339 provides the state with $3.3 million in dedicated bus capital investment.
  • Flint, Mich.’s urban transit operation estimates that it spends between $35,000 and $40,000 monthly just to keep its aging bus fleet operational. This highlights how aging rolling stock negatively impacts a transit agency’s operational budget.

A small urban operator in California notes: “We have identified a state of good repair backlog of more than $200 million over the next 10 years — we do not know where these resources will come from and we need Congress to understand the national bus capital crisis and develop funding programs to help small and mid-size transit properties.”

“It’s unconscionable,” says the Bus Coalition’s Ed Redfern. “We’re facing a real public transportation crisis.”

Time and again, since MAP-21’s passage in 2012, rural and urban transit managers have told me they receive a third or a quarter of a bus from the Section 5339 formula bus capital program. They are also quick to note that they have never actually seen nor received the supposed additional Section 5307, 5310, and/or 5311 dollars to make up the difference in lost dedicated bus capital money.

Exacerbating the looming crisis is — of all things — the ARRA (commonly called the Stimulus) program. Stimulus funds were widely used to buy vehicles in 2009-10, which in many ways delayed the bus capital crisis. These funds required no local share and resulted in thousands of new buses across the nation, in all sized communities. Six years later, and many of those buses are reaching the end of the life-cycles simultaneously.


Once again, CTAA and the Bus Coalition recognized that something needed to be done. As Congress began deliberating MAP-21’s successor, both organizations ramped up information and education campaigns designed to ensure that elected officials fully understood the impact of MAP-21 on the bus transit systems in their district. More importantly, these advocacy groups began to work with their respective members to develop palatable solutions that were more realistic than simply asking for significant additional transit investment. This approach paid dividends.

At the end of July, the U.S. Senate passed (by a vote of 65-34) the DRIVE Act — a six-year reauthorization of MAP-21. Throughout the process of passing the bill, CTAA and the Bus Coalition worked the dedicated bus capital issue, going so far as to develop an amendment (originally sponsored by Sens. Moran (R-KS), Donnelly (D-IN) and Blunt (R-MO), with an eventual eight additional co-sponsors) to increase dedicated bus capital. The amendment (along with hundreds of others) was never taken up, but the Senate heard the message.

DRIVE increases both the formula bus capital levels in Section 5339 —including increasing each state’s set aside from $1.25 to $2 million — and creates a competitive bus capital program at $180 million. Neither CTAA nor the Bus Coalition feels these levels are anywhere commensurate with the built-up bus capital replacement need across the nation — particularly in light of the vast underfunding of the program for the past three years — but both are gratified to see the funding levels rising.

Now it’s onto the House of Representatives, where the Transportation & Infrastructure Committee is poised to mark up its version of MAP-21 reauthorization in early September. The current MAP-21 extension expires Oct. 31, 2015, so time is running short. All public transit bus operators are urged to contact their House members and let them know how vital increased dedicated bus capital funding is — and what’s at stake.

Both CTAA and the Bus Coalition recommend the following two key talking points for these vital discussions:

  • The Senate’s DRIVE Act moves in the right direction, but does not solve the dedicated bus capital crisis.
  • The Section 5339 Competitive program in DRIVE needs to both larger and grow throughout the six years of the reauthorization.

“Buses are the nation’s public transportation workhorses. They provide the majority of transit trips across the country every day, in communities large and small,” says CTAA’s Executive Director Dale J. Marsico. “We need Congress to step up, do the right thing, and make sure there are sufficient, dedicated revenues for bus capital replacement.”    

Scott Bogren is communications director for the Community Transportation Association of America.

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