Now is the Time for Transit to Be Bold...So, How Do We Pay for it?

Now is the time for transit to be bold — both in what we put on the roads and rails and in aggressive pursuit of funding to support this vision. Although COVID-19 has certainly presented the transit industry with significant challenges, it also offers opportunities. As popularized by former Chicago Mayor Rahm Emanuel, “Never let a good crisis go to waste!” Crises offer an unfreezing, a unique circumstance to revise “business as usual” and to reshape market views of transit.

In some communities, we are already seeing portions of suddenly less-congested streets being repurposed for pedestrians, bikes, and buses. Prior to the pandemic, there has been a growing recognition that there is a correlation between walkable transit-oriented land uses and good health. Now, with the potently urgent importance of good health policy, we have an opportunity to remind people of the fitness and medicinal benefits of living and working near transit. The timing of introducing new transit initiatives during the pandemic and its aftermath might actually be advantageous, tempering unrealistic expectations for success. After all, building and sustaining new ridership frequently takes longer than the time we are given to make the case. With ridership resetting across the board, we may have more time to demonstrate viability. In fact, the current environment just might better allow us to reimagine our entire route networks. With everything seemingly in flux, there is a greater willingness to wipe the slate clean and embrace change.

Of course, novel proactive transit initiatives or even sustenance of current service won’t be possible without revenue to support implementation. It is important to do a deeper evaluation of funding options.

Federal Funding Options: Where the Money Is

When funding is tight, federal dollars are particularly critical — unlike states, municipalities, and the private sector, the feds print the money! In response to COVID-19, Congress passed the CARES (Coronavirus Aid, Relief, and Economic Security) Act in March, which included $25 billion for transit. For large systems with heavy reliance on farebox revenue, much of the added CARES Act funding will go to recoup the significant fare losses experienced. (As an aside, this is another argument for transition away from farebox revenue as a major source of transit funding). However, it is important to recognize that the CARES Act is not just emergency relief — it is also stimulus funding, inviting innovation. The cash infusion added three times the annual federal apportionment to transit. This provides an opportunity for smaller and midsized systems, like my own, to invest in a reimagined network.

If CARES Act funding has already been exhausted in your area, stay alert. The House of Representatives passed an additional coronavirus relief bill back in May, the HEROES (Health and Economic Recovery Omnibus Emergency Solutions) Act, which includes an additional $15.75 billion for transit. While the Senate’s bill, currently under contentious debate, does not appear to be following suit, we will need to keep an eye on what, if anything, emerges from the conference committee. A long-promised infrastructure bill — with money allocated to transit — may also finally be on the horizon, presenting additional opportunities for intrepid innovation. We may have to wait until after the election in November for this bill.

Inside the Black Box: Innovations that Maximize Formula Funding

Even without one-off COVID-19-reactive funding, there are other opportunities to maximize annual funding programs. Adding service generates increased traditional formula funding down the road, and this fact is often overlooked. A key factor included in the calculation of the amount apportioned by the Federal Transit Administration (FTA) to each local area is the amount of vehicle revenue miles (VRM) provided, as reported to the National Transit Database. For FTA’s FY20 apportionment, urbanized areas over one million people received an extra 50 cents for every mile of service provided in FY18 (combined §5307 Urban Formula and §5339 Bus Formula funds); for ­areas under one million it was 62 cents. Awareness of this formulation can alter the equation of whether a given initiative is fiscally sustainable. Here at the Cape Cod RTA, we created a new express route, branded as the Patriot Limited, between our Hyannis hub and the Patriot Square shopping center in South Dennis, which is adjacent to our maintenance facility. The route is composed entirely of previous deadhead runs to and from the yard. Thus, while the marginal cost to us was zero, we will gain an extra 62 cents for each mile converted to revenue service in the next year’s apportionment.

Multimodal and Interdisciplinary Flexible Funding Programs: Look Beyond FTA

This is a fertile time to pursue multimodal flexible funding programs housed at the U.S. Department of Transportation (USDOT). In particular, the Congestion Mitigation and Air Quality (CMAQ) and Surface Transportation Program (STP) funds are often considered highway programs. In reality, they are designed to be awarded competitively to either highway or transit projects by individual states. USDOT and FTA are certainly the largest but not the sole sources of federal transit dollars. In the mid-1990s, I utilized Department of Housing and Urban Development (HUD) funding sources — the Enterprise Community (EC) and Community Development Block Grant (CDBG) programs — to initiate two transit initiatives in Vermont, the Williston Road Runner and the Night Owl.

State and Local Funding Options: Maximizing Leverage

State and local funding may currently be trickier, given the pandemic-induced paucity in funding across the board. The good news about CARES Act funding is that it is 100% federal, meaning a state or local match is not required. This is a double-edged sword, however, as it makes it too easy for governors, mayors and select boards to renege on funding commitments. Unlike the American Recovery and Reinvestment Act (ARRA), the federal recession response in the previous decade, CARES Act funding does not have a maintenance of effort requirement, meaning states could reallocate already programmed transit funding to other needs. This would be a regressive mistake and we must forcefully advocate for our local partners to think long term, especially if next year’s funding is based on a set percentage increase over this year’s funding.

An area in which state and regional partners can exercise particular proactivity in transit assistance is through leverage of mitigations in the development process. Here on Cape Cod, my agency secured funding for more frequent service on our Sandwich Line through the state and local planning commission requiring that the proposed Canal Street Crossing development fund it as a condition for permitting under the Massachusetts Environmental Policy Act. It’s a rule of nature that people get much more creative when it’s not their money!

Private Partners: Enlightened Self-Interest

The private sector may be in a position to assist and support, even when funding transit may not be an explicit permitting requirement, if the transit investment is viewed as favorable for land use, access, or marketing reasons. In recent years, private developers in the Boston area have paid for large capital construction projects at their doorsteps, resulting in shrewd business investments. Examples include the new Assembly Square infill station on the Orange Line supported by the developers of Assembly Row, and the Boston Landing and Lansdowne Street infill Commuter Rail stations, supported by New Balance and the developers of Fenway Center, respectively. On the operations side, the new Encore Casino bankrolled greater off-peak subway service on the Orange Line while the New England Patriots paid for new Commuter Rail service to Foxboro. We must be careful with this approach, mindful of the old adage “He who pays the piper chooses the tune.” Using private sector dollars to fund transit initiatives is only as good as its benefit to the public good. We never want to be in a position where we limit transit initiatives only to areas with billion-dollar benefactors.

Foundations and Charities: All About the Mission

Private foundations and mission-oriented charities can serve as funding sources for community-centered partnerships. I worked with the Boston Foundation to support conversion of the MBTA Commuter Rail Fairmount Line, a branch running exclusively through inner-city minority Boston neighborhoods, into a rapid transit-like service rebranded as the Indigo Line. Another Boston-based philanthropic organization, the Barr Foundation, has funded a pilot for exclusive bus lanes that have successfully reduced rider travel times in the communities of Arlington, Everett, Cambridge and Watertown. Faith-adjacent, if not faith-based, charities can also play a role. I was able to expand the service levels of the Williston Road Runner (referenced earlier) with grants from Easter Seals Project Action and Lutheran Social Services of New England.

Some of my favorite examples of community-based funding are the transit investments supported by ArtPlace America. These grants foster creative placemaking, using art to make community spaces more engaging, open, sustainable, and equitable. In Baltimore, an ArtPlace America project supported an artistic reimagining of the lowly bus stop into a creative, playful, and interactive environment.