Now is the time for transit to be bold!
So, how do we pay for it?
STUDIO SIX GUEST AUTHOR: NOAH BERGER
TRACI JONES
Principal
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Obtaining Essential Funding
for our Essential Systems
Foreword: by Traci Jones, Principal of Studio Six
The High Cost of a Pandemic
When the U.S. began to comprehend the severity of the pandemic back in March and governors across the country began issuing stay at home orders, life and the economy came to a grinding halt. Riders were encouraged, for perhaps the first time in history, not to ride transit in an effort to prevent the spread of the deadly virus. Ridership in cities around the country plunged. Consequently service and frequencies were reduced to bare minimum levels for systems of all sizes. But transit kept moving, continuing to provide essential service for those who didn’t have the luxury of staying home—frontline workers in hospitals, grocery stores, post offices and countless other places.
With the high cost of operating systems, exacerbated by new costs associated with hygienic measures and retrofits for buses, coupled with the loss of fare revenue, transit systems around the nation are now facing crippling financial deficits. “Transit leaders in cities including Seattle, Los Angeles and Miami warn they need billions of dollars more in aid, otherwise their systems could collapse.” 1 New York City Transit is facing a mindboggling loss of $16.2 billion over the next four years. Transit agencies across the country are projected to rack up close to $40 billion in budget shortfalls, dwarfing the $2 billion loss inflicted by the 2008 financial crisis.” 2
But this is not new news to any transit provider or city transit system. Public transit agencies face an uphill battle due to budgetary concerns and potential behavioral shifts away from mass transit.
Noah S. Berger
Studio Six Guest Author
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Now is the Time for Transit to Be Bold!
So, How Do We Pay for it?
Guest author Noah Berger, Deputy Administrator at Cape Cod Regional Transit Authority and a former director at the Federal Transit Administration, is a passionate transit leader with expertise on funding transit initiatives. He joins Studio Six with his creative insights on identifying strategies to fund transit initiatives and recent COVID funding information.
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.
\\ Federal Sources of Funding
Most competitive programs will solicit applications through a Notice of Funding Opportunity (NOFO) that will be published in the Federal Register. Following is a real time listing of all current open FTA NOFOs.
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.
\\ Don’t Underestimate Formula Funding
Enclosed is a list of unit values for each transit data point, showing exactly how new service will increase your area’s FTA formula apportionment.
Multimodal and Interdisciplanary Flexible Funding Programs:
Look Beyond FTA
This is a fertile time to pursue multimodal flexible funding programs housed at the US 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.
\\ Flexible Funding Programs
Enclosed is a summary of USDOT flexible funding programs that can be applied to either transit or highway projects.
Keep in mind that while the grant programs are designated as ‘formula’ in that the amounts given to each state or region are predictable, how your state or local area programs the funds and to which mode is discretionary and will require you to make a compelling case for your project.
Rail-Volution keeps a regularly updated listing of all federal funding programs for all agencies, including non-DOT, for which transit initiatives are an eligible use.
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!
\\ State and Local Funding Resources
Local State and community resources vary among states and regions. Here is a list of State opportunities in Massachusetts (Check with your state DOT for relevant opportunities in your area).
Each state has different environmental and local permitting regulations. Here is a link to summary of environmental policy act laws by state. Keep in mind that local permitting is mostly controlled by municipal jurisdictions.
As with your federal representatives, be sure to also let your state and local officials know how important state and local funding is to support transit!
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.
\\ Private Sector Possibilities
Reach out to your local chamber of commerce to help identify potential businesses to partner with. The U.S. Chamber of Commerce maintains a searchable list of local chambers
To identify large new developments in your area, keep an eye on your local media for what has been proposed or might be controversial—if a project is controversial, that could be an opportunity to work with the developer to identify transit mitigations that the sponsor could use to win community support. In addition to housing, look at large recreational centers, stadiums, casinos or shopping centers.
Look at the docket of your local Zoning Boards of Appeals for large projects seeking zoning waivers or variances for potential private sector funders in your area.
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 pilot 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.
Source: https://www.artplaceamerica.org
\\ Foundations and Charities Resources
You probably know local charitable organizations in your area the best. GuideStar publishes a comprehensive national directory
The Chronical of Philanthropy publishes an exhaustive listing of Foundations
Colleges and Universities: An Education in Transit
One final potential funding partnership to examine is with area colleges and universities. In mutually beneficial symbiosis, college students and employees provide transit with high demand, while transit saves the institution from having to fund a separate campus operation or manage vast parking lots. At minimum, many colleges build the cost of a U-Pass, allowing unlimited rides for all students, into student fees on behalf of the transit agency. In the area around Amherst in western Massachusetts, the Five College Consortium pays for PVTA to connect all member institutions as part of its route network, even supplying student labor to drive some of the buses. Finally, as is well known to Studio Six stans, the City of Boulder secured funding from the University of Colorado Boulder to help fund and sustain the trailblazing HOP bus.
\\ Find Your Partner in Education
You certainly know the colleges and universities, including 2-year colleges, in your area. If they don’t work with you already, reach out to them about forging a mutually beneficial partnership.
USDOT funds University Transportation Centers (UTC) across the country, which support academic transit research. Here is a listing of local UTCs. Reach out to UTCs that share geography or focus area with your project about being a partner or acting as a go-between in facilitating a partnership with an area college or university.
LET’S BE BOLDER
Speaking of Boulder—it’s time to be bolder! Rather than allowing funding to temper our proactivity, we need be creative in identifying and securing new revenue. Transit has served as the proverbial canary in the coal mine during the pandemic; however, it is also what literally will drive regional economies to the other side of this nightmare. It’s on us to rebuild, both physically and psychologically, by reimagining transit and by staying vital while ensuring that our systems are valued. We need to be proactive in creating new and innovative outreach campaigns. Although recent research suggests that COVID-19 transmission is not linked to riding public transit, we need to help ameliorate concerns and provide reassurance, without defensiveness. We will need to get the service right to maximize feelings of security and joy, and, in parallel, impact how transit is experienced, depicted, and branded.
Funding is available at every order of magnitude and scale, from 62 cents per mile to tens of millions of dollars—we just have to look for it. Our communities are depending on us.
1 Pranshu Verma, “Public Transit Officials Fear Virus Could Send Systems Into ‘Death Spiral,’ (New York Times, July 19, 2020
2Pranshu Verma, “Public Transit Officials Fear Virus Could Send Systems Into ‘Death Spiral,’ (New York Times, July 19, 2020)
\\ About the Author
