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As President Biden’s American Jobs Plan nears its first votes in Congress, the transit sector waits with bated breath to see what the infrastructure plan will mean for it. With figures changing seemingly by the day, present estimates put the dollars designated for public transit projects at approximately $66 billion. It is important to note, however, that of that figure, the vast majority (about 64%, in fact) is to be used on transit maintenance, not new projects. Less than 30% of the total transit investment is anticipated to go to new or expanded transit projects. Presently, approximately 17% of federal transportation dollars go to public transit spending. By some estimates, the infrastructure plan may increase as much as double that percentage. While increased investment is certainly welcomed and appreciated, those in the public transit business know all too well that even this money, spread out over eight years, will still fall woefully short of America’s actual public transit needs. So, what should we be doing?

First, it is important to highlight, both to our elected officials and the general public, the importance of public transit. Public transit has long been known to ease congestion, reduce pollution, and lower our energy consumption — all stated goals of the President’s Plan. In fact, public transit is at the intersection (no pun intended) of the American Jobs Plan. The White House has touted in its “Fact Sheet” that the Plan, while characterized by most as an infrastructure plan, seeks to address many societal issues such as the lack of affordable housing and jobs. Many believe, and those in the public transit sector know, that public transit is a key to addressing many of these issues. For example, transit‐oriented development can provide accessible and affordable housing options along key transit corridors as well as convenient and reliable transportation for workers. Understanding and appreciating the interconnectivity between public transit and these stated societal goals must be stressed too and recognized by those ultimately responsible for making the final funding decisions.

Second, initial federal funding for transportation prioritized “shovel‐ready” projects. Whether the American Jobs Plan will do the same is yet to be seen, but we can certainly expect there to be a race to be first in line for what will still be limited federal transit dollars. Evaluating current transit needs, anticipating future transit needs, and preparing the most important projects for immediate development may be instrumental to successfully obtaining new transit dollars. As previously mentioned, the majority of the transit dollars seem to be earmarked for transit maintenance. What we do not yet know is how “maintenance” will ultimately be defined. Public transit authorities will be well served to prepare both maintenance projects as well as new or expanded projects for submission and consideration.

Finally, it seems clear that even the expanded federal dollars will be insufficient to cover the costs of needed and necessary public transit projects, making alternative and/or supplemental funding sources a must. Most state and local tax sources are already limited or otherwise committed. Many public transit authorities are turning their attention to public‐private partnerships, otherwise known as P3’s, as an alternative funding mechanism. While P3 programs can take different forms, the general idea is that government agencies shift some control and ownership to private companies in exchange for significant amounts of capital from the private sector to pay for needed public projects. P3s typically have a competitive procurement aspect, although many allow for unsolicited proposals. These arrangements are typically controlled by a comprehensive agreement whereby the private entity provides the capital or financing for a project that serves a public purpose and may also include such items as design, construction, upgrading, operating, and/or ownership of the project for some period, and possible revenue splitting. Regardless of the ultimate form of the deal, the option of P3s offers more creativity and opportunity and can vastly expand the universe of viable public transit projects for many communities.

Advocacy, preparedness, and creativity are all attributes with which those in the public transit industry are familiar and practiced. Regardless of its ultimate form, it is clear that public transit stands to gain from the passage of the American Jobs Plan — not just in terms of increased financial investment and opportunity, but also in elevating its importance to fulfilling a wide array of societal needs. The infrastructure plan is a long‐awaited, much needed, and well‐deserved federal commitment to the importance of public transit.

About the author
Dawn Meyers

Dawn Meyers

partner at Berger Singerman and team manager of the firm's Government and Regulatory Team

Dawn Meyers is partner at Berger Singerman and team manager of the firm's Government and Regulatory Team.

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