PUBLIC TRANSIT

OVERVIEW

Roughly 80% of Americans live in cities or nearby suburban neighborhoods. Even the traditionally rural Midwest and South are catching up, with 76% of their respective populations now living in urban areas.¹ These communities face higher traffic congestion, which results in longer commutes, lost economic opportunities, more pollution, and heightened public health problems. Increasing public transit could help reduce traffic in many of these areas, but federal transportation policy currently focuses overwhelmingly on highway development, often at the expense of other programs.² As a result, almost half of Americans lack access to public transit.³ The federal government should rethink how public transit is financed, and adjust the policies that currently favor more roads over all other options.

ANALYSIS

Spanning 47,000 miles of roadway, the interstate highway system is one of the Nation’s great post-war accomplishments.⁴ But rapid increases in the number of miles driven each year have led to highway congestion and required transportation planners to regularly choose between expanding capacity and properly maintaining existing roads.⁵ Americans now waste 5.5 billion hours, 2.9 billion gallons of gasoline, and $121 billion while stuck in traffic each year.⁷ Despite efficiency improvements, passenger vehicles remain a major source of pollution, emitting 31,000 tons of SO₂, 3.5 million tons of NO_x,⁸ and over a gigaton of CO₂ equivalent⁹ —a full 15% of total U.S. greenhouse gas emissions.¹⁰

As more Americans move to cities and inner suburbs, expanding public transit options would reduce congestion, save commuters money, and help the U.S. become more energy independent.¹¹ Expansion of transit systems¹² already has helped open new communities to business opportunities, boosted property values,¹³ and added over $300 billion to GDP in the last decade.¹⁴ Today’s public transportation systems reduce CO₂ by 37 megatons and avoid 4.2 billion gallons of gasoline use each year,¹⁵ which would otherwise cost travelers nearly $15 billion.¹⁶

IMPLEMENTATION

To expand transit in the U.S., the federal government should help local governments access private funding sources and use data-driven methods to prioritize limited budgets.

Help Local Governments Unlock Financing Options

 The Federal Transit Administration (FTA) should offer on-site assistance for local governments exploring funding options for transit projects. Having access to transit finance specialists could encourage local governments to take advantage of complex but effective financing methods¹⁷ like “value capture”,¹⁸ public-private partnerships,¹⁹ and bond issuance.²⁰ With a relatively small increase in funding for personnel, the FTA could offer full-time consulting to help interested parties compare available financing options and negotiate the most rewarding contracts possible for transit development.

Use Economic Analysis to Make Smarter Funding Decisions

 A large number of state departments of transportation make little use of economic analysis to judge the merits of a project or where its benefits will be enjoyed.²¹ The U.S. Department of Transportation (DOT) should develop a standardized model for this purpose and provide assistance to states, municipalities, and local planning organizations in operating the model. Once it has been distributed, Congress should make the use of this DOT model a requirement in all applications for funding from competitive transportation programs.

Incorporate Economic Analysis When Determining Federal Cost Share

Federal funds generally provide 80% of the total cost of highway projects but only 50% of transit projects, with the remainder paid by state and/or local governments. This practice encourages states to spend their limited transportation dollars on highway projects.²² Instead of using an arbitrary 80% or 50% formula, the federal government should use standardized economic analysis to determine the regional benefits of a project and, subsequently, what the appropriate federal cost share of that project should be.