Management & Operations

Transit's post-election outlook

Posted on December 6, 2006 by Frank Di Giacomo, Publisher

The change in the political landscape in Washington could spell a friendlier climate to transit interests in the nation’s capital. However, the bigger changes are at the local level and spell even better news for the industry.

The more things change…
As anyone who hasn’t been asleep or in exile somewhere knows by now, complete control of the Congress will pass into Democrats’ hands for the first time since 1994. With it, every chairmanship of every key committee will also be occupied by a Democrat (or in the case of Senate Homeland Security Committee, by an independent caucusing with the new majority). APTA’s Website (www.apta.com) has a good rundown of the expected new committee and leadership posts, so I won’t go into it here.

The new leadership is likely to remain more or less committed to transit at the same levels, however. This is not to say that today’s Democrats are more hostile to their predecessors either in their own party or the other. In many cases, with their expected greater interest in having a stronger energy policy that will encourage more efficient travel alternatives like transit, they will smile on the industry more.

It is important to remember three things, though. First, the GOP-led Congress enacted the largest public transportation investments in history — for their entire majority run — so you can’t get much better than that. Second, with the budget deficit war to fight (or as some are saying, finish) and homeland security priorities, there is not much wiggle room in discretionary domestic spending. Finally, any short-term enthusiasm will likely not address the real long-term problem with transportation funding: how to pay for it. That will require a bipartisan approach. So, in this Congress, look for annual transit appropriations to be at about the record authorized levels.

…the more they stay the same
The real dramatic news is not in Washington, however — and hasn’t been for a while now, even at those record levels of spending. While voters were throwing Republicans out of power, they also approved more than 70% of all transit-related initiatives across the country. And those that were not approved still had more votes for than against, but failed only because they just fell short of the needed supermajority. These local ballot measures added up to another $40 billion in transportation funding for the next several decades.

This continues a quiet revolution that has been going on for more than a decade: local funding for the industry has been growing at a faster rate than federal funding. Today, only about 40% of all capital spending is paid for by the feds — in other words, only half the rate allowed by federal law. Operating funding shared by the federal level has been ticking upward, but it is still far less than this share, especially in larger cities.

If this trend continues, it has huge implications for transportation policy and regulations, including Buy America and local preferences disallowed by federal rules. Many cities already buy buses with local funds so that Buy America, Altoona testing and other rules do not apply. Similarly, some cities purchase railcars with stipulations to create local jobs. These policies will become much more widespread if federal money is less important than it used to be. In response, the industry might have to adjust its advocacy strategies, and the supply side might need to adjust its marketing and sales strategies.

The real change may not be what the government will look like in Washington. Instead, you might want to get out your voter’s pamphlet and back issues of your local newspapers. That’s where you find out the details of the real changes: the fine print of what your neighbors just passed.

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