Statement of Leslie White
American Public Transit Association
ISTEA Reauthorization
March 13, 1997

The American Public Transit Association (APTA) appreciates the opportunity to testify on the subject of Intermodal Surface Transportation Efficiency Act (ISTEA) funding flexibility and program eligibility. Mr. Chairman, at the outset we want to commend you and the Subcommittee for the strong leadership role you played in securing passage of ISTEA in 1991.

Overview

APTA believes that continuation of a strong federal role is needed to provide an efficient, balanced transportation system for all Americans. Toward this end, APTA has adopted a comprehensive ISTEA reauthorization working proposal, which has been submitted for the record, that would preserve the ISTEA and transit program structures, expand opportunities for flexible funding -- both highway to transit and transit to highway -- and support ISTEA's planning provisions and transit research and development.

The APTA proposal is based on the premise that additional investment in the nation's surface transportation network is needed to provide a solid foundation for economic growth. It would fund the annual transit and highway core programs at $6.25 billion and $25.4 billion respectively, and also authorize some $3.6 billion annually for an increased Surface Transportation Program. These funding levels can be supported with existing trust fund revenues, balances, and interest, and with revenues from the 4.3 cents federal fuels tax that now goes to deficit reduction. It assumes that commitments from the Mass Transit Account (MTA) would be subject to the same spending limitations that are applied to the Highway Account.

Mr. Chairman, we oppose efforts to repeal federal gas taxes that support investment in the nation's transportation infrastructure, or to eliminate the existing federal partnership with state and local governments. On the other hand, we are not opposed to efforts to modify the highway funding formula, but we believe that a fair distribution of highway funds can be accomplished within the current ISTEA program structure. We also strongly support the "level playing field" provisions between highway and transit investments established under ISTEA, including the roughly four to one funding ratio. Without these provisions modal balance -- an important ISTEA hallmark -- will be jeopardized.

APTA'S ISTEA REAUTHORIZATION PROPOSAL

ISTEA established a sensible program to carry out post-interstate federal highway and transit policy, which should be retained in the next authorization act. It recognized that federal interests are best served by a balanced transportation system. ISTEA achieves balance by allowing federal, state, and local resources to be used a range of transportation alternatives and it allows state and local authorities to choose the alternative that best meets their particular objectives. ISTEA's flexible funding and intermodal emphasis allow transportation policy to address national and local needs while recognizing that transportation is linked to other factors that effect each community's economy and quality of life. In short, ISTEA works, and its reauthorization is critically important in the face of significant surface transportation infrastructure needs.

Maintain ISTEA's Flexible Funding Provisions

ISTEA's flexible funding provisions under the Congestion Mitigation and Air Quality Improvement program (CMAQ) and Surface Transportation Program (STP) have been successful and should be maintained. APTA supports metropolitan suballocations, the equal 80% federal matching shares for highway and transit projects, and the use of local "soft match" for transit projects. The flexible funding provisions allow communities to identify those transportation solutions that best support or otherwise affect their goals for economic development, community revitalization, and other priorities. They have also created new incentives to manage federal resources more efficiently and strengthened the partnership among federal, state, and local governments. Flexible funding transfers to transit have risen from $304 million in FY 1992 to $780 in million FY 1996. This is a clear indication that ISTEA's flexible funding provisions have been successful and that transit is a priority at the state and local level.

The CMAQ Program

Nearly fifty-five percent of the $3 billion in surface transportation funds "flexed" to transit in the first five years of ISTEA have come from the CMAQ program. CMAQ recognizes the connection between transportation improvements and air quality. The ability to fund innovative projects that improve the overall transportation system's effectiveness is one of CMAQ's most significant contributions to a balanced transportation system. CMAQ funds have been used to purchase alternative fuel buses, expand parking at rapid transit stations, and to construct intermodal facilities that connect local bus service with intercity bus, train, and airline service.

APTA's proposal supports adjustments to the CMAQ program that would keep "maintenance areas" eligible for CMAQ funding, because these areas remain subject to EPA requirements and should have access to federal funds that can help them to keep their air clean.

Our proposal does not support the changes to CMAQ envisioned in the "STEP-21" reauthorization plan, which would fold the CMAQ program into a streamlined Surface Transportation Program. While our proposal to use CMAQ funds in maintenance areas would have the effect of distributing CMAQ funds more broadly, we do not feel that CMAQ program goals should or need to be diluted to address the allocation of funding among the states. Although the Step 21 proposal would make CMAQ purposes eligible under the new STP, there is no guarantee that any of these funds would be used to advance national goals relating to congestion mitigation or improved air quality. By enacting the STEP-21 proposal, the commitment to funding Clean Air Act mandates could be reduced greatly.

Expand Opportunities for Flexible Funding

APTA supports an increase in the authorized funding level for the Surface Transportation Program using resources from the Highway Trust Funds's Highway Account (HA) and Mass Transit Account (MTA). After the transit core program has been funded at our recommended level of $6.25 billion in FY 1998, additional MTA funds would go to a new STP-transit program. For each $1.00 of MTA funds that go to the STP-transit program, an additional $2.00 in Highway Account funds would go to the STP-highway program. Funding for each program would be apportioned in the same manner as the existing STP program, and would include metropolitan area suballocations, and would be subject to the same planning standards.

4.3 Cents/Gallon Revenue

Additional resources for the expanded STP program would be provided by depositing revenue from the 4.3 cents per gallon "deficit reduction" motor fuels tax into the Highway Trust Fund and by applying the Byrd rule solvency test to the Mass Transit Account of the Highway Trust Fund. APTA's proposal would allocate one-half-cent of the 4.3 cents per gallon gas tax revenue for a new intercity passenger rail account and the revenue from 20 percent of the remaining 3.8 cents to the Mass Transit Account.

Intercity Passenger Rail Capital Investments

In addition, to ensure that governors and state DOTs have the broadest flexibility to meet transportation needs, APTA recommends that, under the current program, states be authorized to use the state share of flexible funds for intercity passenger rail investments.

Preserve the Federal Transit Program Structure

The federal transit program is an essential element of the federal surface transportation program. It supports transit services that fill critical gaps in a comprehensive national transportation system. It helps to create transportation choices that allow the existing infrastructure to move people and goods more efficiently and reduce ever more costly congestion. A recent study by the Federal Transit Administration (FTA) indicates that transit saves at least $15 billion per year in traffic congestion costs. Transit also carries millions of Americans to jobs each day and is vital to the success of welfare reform.

In this regard, the existing transit program structure should be retained because it has been successful. It does a good job of meeting a large number of basic needs. The major capital investment programs for new start, fixed guideway modernization, and bus/bus facilities; the urban, rural, and elderly/disabled formula programs; and the planning, research, and administrative functions, all support essential needs and encourage innovative projects and management practices in various regions of the country.

Expanded Definition of Capital Expenditures

Within the transit program we also propose to expand the definition of allowable capital expenditures to include the maintenance of capital assets and to help cover the costs of federal mandates; these changes would allow elimination of operating assistance in areas of 200,000 or more in population. This change would help to create a more level playing field between the highway and transit programs, since highway funds can now be spent on maintenance.

Public Highway/Rail Grade Crossing Safety Improvements

In addition, the Federal Highway Administration's Section 130 Highway/Rail Grade Crossing Safety Program should be maintained to protect the motoring public who use highways that cross over commuter, light and freight rail tracks throughout the United States.

Support ISTEA's Planning Provisions

ISTEA's planning provisions are fundamentally sound, including current authority for Metropolitan Planning Organizations, public participation requirements, transportation and land use linkages, and multi-modal corridor analysis through the Major Investment Study (MIS) criteria. APTA recommends changes to ensure that the planning process fully accounts for often-ignored benefits of transit investments and to provide sufficient resources so that planning does not become another "unfunded mandate."

THE ADMINISTRATION'S PROPOSAL

We applaud provisions in the President's FY 1998 budget proposal that retain a strong federal role in the nation's surface transportation network. We are pleased that the proposal generally maintains the transit program structure created under ISTEA, and that it proposes greater flexibility in the way transit systems can use federal funds. This sets the stage for a renewed, reaffirmed ISTEA later this year.

However, the proposed funding for both transit and highway investment falls short of meeting the growing needs of America's transit riders and highway users. A bright economic future requires a world-class, intermodal transportation system. The efficient movement of people and goods by bus, rail, truck, and automobile is critical to our economy.

The funding recommended in the proposal for surface transportation programs does not meet the Administration's own estimates of the investment required just to maintain our transit and highway infrastructure. The U.S. Department of Transportation (DOT) has estimated that nearly $13 billion should be invested in capital projects each year, just to maintain existing transit services and provide modest improvement to meet a variety of needs. The current federal investment of $4 billion per year is simply not enough. That is why we support the use of gas tax revenues, including the 4.3 cents per gallon gas tax that now goes to non-transportation purposes, for investment in transportation.

CONCLUSION

Mr. Chairman, APTA strongly supports a continued federal role in transportation and continuation of ISTEA and its flexible funding provisions. A greater investment in surface transportation must me made. Building on ISTEA's innovations and emphasis on intermodalism, we can improve the nation's transportation system and ready our economy for global competition in the next century.