As Minneapolis Joins NACTO, Oberstar Backs Shift on Transit Operating Aid

At an event in Minneapolis today, House transportation committee chairman Jim Oberstar (D-MN) announced his support for giving urban transit agencies more flexibility to spend federal transportation formula money on operating — a change in the current law that has already won the backing of Transportation Secretary Ray LaHood but has split the transit industry.

transit_oberstar_3_30_10.jpgOberstar (center) joined New York City transport chief Janette Sadik-Khan (right) at today’s event. (Photo: B.Clements, Finance & Commerce)

Oberstar appeared at an event marking Minneapolis’ move to join the National Association of City Transportation Officials (NACTO), founded 14 years ago by then-New York City Transportation Commissioner Elliot Sander to counterbalance the influence of state DOTs’ voice in D.C., the American Association of State Highway and Transportation Officials (AASHTO).

Oberstar’s specific remarks on transit operating aid were unavailable as of press time. But transport committee spokesman Jim Berard said the Minnesotan supported “in principle” the concept of allowing transit agencies from areas with populations greater than 200,000 to use their federal transportation formula grants on operating expenses.

Under current law, urban transit agencies are restricted to spending federal formula money on capital expenses, such as purchasing new rail cars or laying track for an expanded line.

Congress agreed last year to give transit officials the freedom to redirect 10 percent of their federal stimulus aid to operating budgets, underscoring that the change was a temporary response to the recession.

The American Public Transportation Association (APTA), the transit industry’s chief lobbying group for more than a century, has opposed the use of formula grants for transit operating, preferring that already-scarce highway trust fund dollars be reserved for capital spending on rail and buses. APTA did not return a request for comment by press time on the growing support for changing the existing rules governing transit operating funds.

It’s worth noting that the change Oberstar and LaHood have endorsed would not come until lawmakers take up a new long-term federal transportation bill, which may not occur until next year. Also left undetermined is the share of formula funds that would be made available for transit operating costs if the proposal becomes law; legislation offered by Sen. Sherrod Brown (D-OH) and Rep. Russ Carnahan (D-MO) would okay the use of between 30 percent and one-half of federal formula grants.

(ed. note: The post above has been edited to clarify the distinction between capital and operating expenses.)

6 thoughts on As Minneapolis Joins NACTO, Oberstar Backs Shift on Transit Operating Aid

  1. Ooh! I hope JDK saw the Minneapolis Scenic Byway system and saw what a parkway system could be!

  2. Too bad there wasn’t anybody from NPS there, to see how separate bike and ped paths can work (MVT, anyone?)…

    In the meantime, I find myself taking the APTA’s position…save the Federal dollars for capital expenses. In DC, it’s not like Metro has a shortage of needed capital projects…

  3. “…capital expenses, such as purchasing new rail cars or paying salaries for bus drivers”? Salaries are a capital expense?

  4. From now on. Next stop, 100 percent for operating.

    It will save money. Because in 15 years, there won’t be any transit systems to fund.

  5. Mike – Thanks for the catch; you’re right on the capital-operating distinction. That phrase was inserted in error and has since been corrected.

  6. i can’t say i know enough to make a definitive statement about using funding for operating vs. capital, but my gut feeling is that it would be a serious mistake. there isn’t going to be any ‘downward/death spiral’ of transit — that world is over — no longer a possibility, so let’s just take that possibility right off the table.

    after that we’re left with two options:
    a) keep our pathetic transit systems running in some form, or
    b) try to continue building a system that might resemble a real transit system in the hopes of getting real political support for real, continuing, long-term investment.

    i say go with option b).

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