Transit Funding, Elections Loom Large Over the Industry

Posted on June 16, 2011 by Alex Roman, Managing Editor

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Elizabeth Rao
Chair, transit services

What can the consultant industry do to help struggling public transportation agencies?

The industry can provide transit agencies with solutions that help stretch their public dollars. For capital projects, this includes a focus on the most efficient ways to deliver projects that save time and dollars. Also, suggest and develop efficient project designs that lower future operating and maintenance expenses after a capital project is completed. Since operating and maintenance and state of good repair expenditures comprise a large portion of transit agency budgets, improvements should be proposed that extend the useful life of current assets while reducing operating and maintenance expenditures. Providing public transportation agencies with these types of strategies can help bridge revenue shortfalls while keeping systems in good repair.

What is your company's greatest challenge?

Our greatest challenge is continuing to assess and evaluate what it will take for HNTB to support its clients successfully in the future. This requires careful planning to be able to respond to the rapidly changing needs of our clients. Whether it is developing cost-effective designs, efficient project delivery methods or implementing new technology applications, our clients are interested in saving time, reducing expenses and getting a bigger bang for their dollar. Also, it is essential in this cost constrained environment that we help our transportation partners develop innovative funding and financing strategies to enhance their transportation revenue streams. HNTB is responding to this challenge by continuing to recruit and build a sophisticated team of transportation managers that understand this full service approach.

How has the lack of a new authorization bill impacted projects/consultant industry?

Lack of a new authorization bill has caused uncertainty in the transportation marketplace, placed some projects on hold and delayed project implementation. The longer this uncertainty continues and projects are delayed, it will result in more expensive projects. A year-to-year continuing authorization makes it difficult for agencies to plan for the future and develop not just projects but their transportation programs cost-effectively. Adding to this uncertainty is the inability to predict future federal funding levels, due to the current economic challenges facing this country and decisions that must be made on how our country's critical transportation needs are funded as part of the overall federal budget. At HNTB, we are continuing to help our clients move their projects forward, but at a slower pace, helping them conserve resources and develop more effective delivery methods.

Holland & Knight LLP
Jeff Boothe

How has the Obama Administration impacted public transportation?

Certainly the Obama Administration is probably the most pro-transit administration we have seen during the 30 plus years I have been in Washington, D.C. The Administration certainly has demonstrated its commitment to transit through the American Recovery and Reinvestment Act (ARRA) funding as well as initiatives to promote transit in connection with housing and economic development through the livability and sustainability programs. Further, we see a commitment to transit through the proposed authorization bill, which provides a substantial increase in investment in transit in Fiscal Year 2012 and beyond. The Administration surface transportation bill proposes substantial increases in funding for transit that would both address the need for state of good repair as well as investment in new systems and high-speed rail.

How will the upcoming elections impact public transportation?

Looking back at the 2010 elections, the change from Democrat to Republican control in the House had a substantial impact. The Democratic chairs of the appropriations and authorization subcommittees and full committees were very pro-transit. There appears to be less support for transit among the newly elected Republican members in both the House and Senate. Although Chairman Mica is a strong transit supporter, his committee is substantially comprised of new Republican members who have, to date, not demonstrated a huge commitment to transit. If the proposed changes to the Fiscal Year 2011 Continuing Resolution and the House-passed Fiscal Year 2012 budget are any indication, we see a waning of the historic commitment to surface transportation and to transit in those actions. In the Senate it continues to be about securing 60 votes on any issue. Even when there were 60 Democratic Senators in the 111th Congress, there was not a filibuster-proof majority. Thus, it's about getting the 60 votes regardless of who controls the chambers. We still have a challenge in finding some consensus in the Senate between the Republicans and Democrats to move forward an annual funding bill as well as move forward a surface transportation authorization bill.

Are there any practical ideas for solving funding issues down the road?

Certainly, the gasoline tax is the funding mechanism of which we're most familiar, however, that familiarity appears to have bred opposition from the public resulting in a reluctance to increase it despite not being raised for nearly 20 years. Therefore, we are forced to consider other alternatives in the face of that apparent unanimous opposition to the gasoline tax. Trial balloons have been floated, such as the vehicle mileage tax, and quickly shot down due to opposition. I'm not hearing of any option that has generated consensus in the House and Senate. I would just simply say that none of the parties — the House, Senate, Democrats, Republicans or the administration — are necessarily showing their cards at this point regarding what sources of funding they might be willing to consider.

At some point in time, though, delay does have implications for the program. We will be confronted with declining revenues in the Highway Trust Fund and Mass Transit Account and have to confront that reality toward the end of calendar year 2012 and early 2013. My concern is that rather than to be proactive and address that in advance of facing substantial reduction in funding, we may face a period of time in which the substantial impacts of an underfunded surface transportation program will be realized at the state and local level. Perhaps, that will compel members of Congress to act in response to that impact. I can only hope, because the alternative is not a pleasant one.

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