February 20th, 2009
America in Gridlock
[REPORT] Infrastructure of the stimulus plan: $8.4 billion in Mass Transit spending

Tom McNamara, Blueprint America

A breakdown of provisions and funding requirements for mass transit in The American Recovery and Reinvestment Act.
[Transit Capital Assistance] [Fixed Guideway (Rail) Infrastructure Investment] [Capital Investment Grants] [Federal Transit Administration Formulas]

$8.4 billion total in stimulus spending for mass transit

Funding breakdown for Metropolitan Transit Authority operating budget (2008)

$6.9 billion The stimulus bill provides $6,900,000,000 instead of $8,400,000,000 as proposed by the Senate and $7,500,000,000 as proposed by the House.

In addition, mass transit funding in the stimulus bill provides 2.5 percent of the rural funds for tribal transit needs and includes $100,000,000 (instead of $200,000,000 as proposed by the Senate) for discretionary grants to public transit agencies for capital investments that will assist in reducing the energy consumption or greenhouse gas emissions of their public transit agencies.

$750 million The stimulus bill provides $750,000,000 instead of $2,000,000,000 as proposed by the House. The Senate did not include a similar provision.

  • The funds will be distributed to capital projects to modernize or improve existing rail lines, including purchase and rehabilitation of rolling stock, track, equipment and facilities. The estimated cost of the state-of-good-repair backlog for existing fixed guideway systems is nearly $50 billion.
  • This money also has a 180 day use-it or lose-it provision.
$750 million The stimulus bill provides $750,000,000 instead of $2,500,000,000 as
proposed by the House. The Senate did not include a similar provision.

  • The funds will be distributed on a discretionary basis for New Starts and Small Starts projects that are already in construction or are nearly ready to begin construction.
  • Priority is for projects already under construction or able to comply within 150 days. The funds are available through Sept. 30, 2012.
Urbanized Formula the formula: Primarily, the urbanized formula is based on population and population density. An urbanized area, accordingly, is an incorporated area with a population of 50,000 or more.For areas of 50,000 to 199,999 in population, the formula is based solely on population and population density. The funds are apportioned to the Governor of each state for distribution.For areas with populations of 200,000 or more, the formula is based on not just population and population density but also a combination of bus revenue vehicle miles, bus passenger miles, fixed guideway revenue vehicle miles, and fixed guideway route miles. Funds are not apportioned to a Governor but rather go directly to a designated recipient selected locally (most often, a responsible local official or operator of a public transit service) to apply for and receive federal funds.

A few areas under 200,000 in population have been designated as transportation management areas and receive funding directly.

eligible purposes: Federal funding according to the Urbanized Formula can be used for planning, engineering design and evaluation of transit projects and other technical transportation-related studies; capital investments in bus and bus-related activities such as replacement of buses, overhaul of buses, rebuilding of buses, crime prevention and security equipment and construction of maintenance and passenger facilities; and capital investments in new and existing fixed guideway systems including rolling stock, overhaul and rebuilding of vehicles, track, signals, communications, and computer hardware and software. All preventive maintenance and some Americans with Disabilities Act complementary paratransit service costs are considered capital costs.
For urbanized areas with populations of 200,000 or more, operating assistance is not an eligible expense. Additionally, in these areas, at least one percent of the funding must be used for transit enhancement activities such as historic preservation, landscaping, public art, pedestrian access, bicycle access, and enhanced access for persons with disabilities.

the match: The federal share of a mass transit project cannot exceed 80 percent of the net project cost. Exceptions: The federal share may be 90 percent for the cost of vehicle-related equipment needed to comply with the Americans With Disabilities Act and the Clean Air Act; The federal share may be 90 percent for projects related to bicycles.

The federal share cannot exceed 50 percent of the net project cost of operating assistance.

funding availability: Year appropriated plus three years (total of four years).

Rural Formula the formula: Only for areas less than 50,000 in population, the Rural Formula is based on nonurbanized population and land area. The breakdown: 80 percent of the formula is determined by the nonurbanized population of a state; 20 percent of the formula is based on land area – no State can receive more than 5 percent of the amount apportioned for land area.

The FTA also adds amounts based on the nonurbanized population according to the Growing States Formula.

Eligible recipients are state and local governments, Indian tribes, non-profit organizations and public transit operators.

eligible purposes: Funds may be used for capital, operating, and administrative purposes. The amount that a state can use for administration, planning, and technical assistance is limited to 15 percent of the annual apportionment. States must spend 15 percent of the apportionment to support rural intercity bus service unless the Governor certifies, after consultation with affected intercity bus providers, that the intercity bus needs of the state are sufficient.

the match: The federal share for capital and project administration is 80 percent. Exceptions: The federal share may be 90 percent only if it is needed to comply with the Americans with Disabilities Act, the Clean Air Act or bicycle access projects.

The maximum federal share for operating assistance is 50 percent of the net operating costs.

funding availability: Year appropriated plus two years (total of three years).

Growing States and High Density Formula The formula establishes new factors to distribute funds to the urbanized area formula and rural formula programs.One-half of the funds that are made available under the Growing States factors are apportioned by a formula based on state population forecasts for 15 years beyond the most recent census; amounts apportioned for each state are then distributed between urbanized areas and rural areas based on the ratio of urban/rural population within each state.

The High Density States factors distribute the other half of the funds to states with population densities over 370 persons per square mile. These funds are apportioned only to urbanized areas within those states.

Sources: Congressional Budget Office, Department of Transportation – Federal Transit Administration, House Committee on Transportation and Infrastructure, House Committee on Rules, Joint Committee on Taxation

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