Management & Operations

Making the case for public transit

Posted on February 26, 2008 by Frank Di Giacomo, Publisher

As the industry’s leaders gather in Washington, D.C., this month to attest to how transit can contribute to economic growth, staving off climate change, and enhance the environment and livability of cities, there is no shortage of arguments the industry can use in demonstrating a business case for public transportation investment. However, focusing on federal legislation must be balanced with active support for funding at the state and local levels of government. After all, more than 60 percent of all capital funding is provided by non-federal sources.

Arguments resonate at all levels

These business-like arguments for public transportation have a home both nationally and locally, as well as at both ends of the political spectrum. Both Republicans and Democrats have embraced new transit projects as a way of stimulating the economy and improving the nation’s competitiveness in international trade. These are resonating as troubling signs about unemployment and economic growth are appearing in the news these days.

Environmental issues have also become business issues for two reasons. First, cities want to be more liveable so that businesses will relocate there. In turn, companies want to be where workers want to live and where transportation is efficient, as the new economy depends more on attracting talent and just-in-time deliveries than ever before.

Climate change is also a fast-growing business. According to Point Carbon, an industry research organization, $30.4 billion worth of carbon credits, which are the allowances that polluters in the countries that signed the Kyoto climate treaty buy to stay within the law, were traded last year. This is more than double the $13 billion traded in 2005. Europe’s trading system made up about 80 percent of the total value, but companies in Kyoto nations buy credits from all over the world. American organizations, perhaps including transit agencies, are also eligible as sellers, if they can certify to the standards that determine how many credits are earned.

In addition, the new energy bill in Congress proposes a similar cap-and-trade system to create a greenhouse gas credit market in the only major nation that has not signed the Kyoto accord. Transit, too, would be eligible.

States and cities “get it”

These are all rationales for public transportation that have caught on at a much faster rate at the state and local levels, via successful referenda, than at the federal level, even with record levels of federal funding. One of the reasons why the federal share of spending has been declining is that state and local spending on transit has gone up faster. More than 60 percent of the ballot initiatives with public transportation proposals in them have passed, many, if not most with tax increases.

Business leaders can, therefore, help make the case for public transportation in communities and state governments just as they have helped to do so in the halls of Congress. The industry’s supply side might sound self-serving if they came out too strongly in a community. However, if they could reach out to local business leaders through organizations, such as local chapters of the U.S. Chamber of Commerce or business roundtables, they will find that they share bottom-line concerns, such as attracting skilled workers who are choosier about where they live and what communities have to offer them, or managing their supply chain better through more efficient transportation. The result of these business-to-business connections would be even more impressive for public transportation than what we have already seen.

Look for our supply-side leaders to become even more involved like this during this highly political year and beyond.

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