LaHood Reaches Out to Transit Industry, Lamenting ‘Lousy Economy’

Transportation Secretary Ray LaHood sought to commiserate with the cash-strapped transit industry today, declaring the Obama administration an ally of local rail and bus agencies even as the "lousy economy" clouds prospects for passage of a new long-term federal transportation bill.

Transportation Secretary Ray LaHood (Photo: Getty Images)

In an address to the American Public Transportation Association's (APTA) annual conference, LaHood highlighted the $787 billion stimulus law's contribution to transit and high-speed rail and extended a hand to local officials who have been forced to pursue service cuts and fare increases.

"If we didn't have a lousy economy, a lot of these issues would bubble up more quickly," LaHood told transit planners who lamented the lack of progress on new federal legislation and the tough budget choices brought on by the recession.

"Part of the solution," LaHood added, "will be when the economy comes back" and the White House is more open to discussing tax increases as part of the financing mix for long-term transport funding.

But in the meantime, LaHood's remarks served as a friendly warning to the transit industry that, given the capital's current political reality, its $8.4 billion haul from the stimulus should be considered a victory.

One exchange in particular epitomized the state of play between the administration and transit agencies: When an APTA conference attendee from Grand Rapids, Michigan, asked the packed audience of local officials to raise their hands if they had raised fares or cut service during the past year, a sizable number of hands rose into the air. Minutes later, Federal Transit Administrator Peter Rogoff leapt up to ask how many officials would be cutting more or laying off more workers if not for the stimulus.

Even more hands went up in response to Rogoff's query.

"The big sticking point of all of this is money," LaHood said. "That money [to pay for a new federal bill] just doesn't exist right now."

Despite that grim news and the long line of transit planners who shared their fiscal woes with LaHood during a question-and-answer session, one opening emerged for the industry to make headway on its Washington agenda. The U.S. DOT chief signaled openness to expanding urban transit agencies' ability to use federal capital grants to cover operating costs.

That capital-to-operating flexibility now sits at 10 percent, a level set soon after the stimulus law's passage. "Maybe that's not the right percentage," LaHood said. "Maybe we need to work with Congress to allow you to do more when the economy is bad." He floated the idea of a "sliding scale" for federal operating aid that would vary based on economic growth.

On two other big-ticket federal transit issues, however, the federal outlook appeared hazy following LaHood's appearance.

Asked about the so-called "CLEAN TEA" plan to give transit a dedicated share of the revenue from climate change legislation, LaHood touted his work in the president's Green Cabinet before admitting, "I can't say [CLEAN TEA] has been part of our discussions. But it possibly could be in the future."

Another questioner brought up the stimulus law's provision increasing the monthly pre-tax transit benefit for commuters to $230 -- equalizing the tax-free funding for transit and parking -- which is set to expire at the end of 2010. LaHood replied that he had not the "slightest idea" of the issue's status, though Rogoff explained that the tax question is under the Treasury Department's purview.

"We intend to talk to our partners at Treasury" about the value of keeping the pre-tax transit benefit equal to that for employee parking, Rogoff said.