Oversight Hearing on "Perspectives on America's Transit Needs."

Mr. Chairman and Members of the Committee, thank you for the opportunity to testify today on the conditions and performance of our Nation’s transit infrastructure.  

As you may be aware, Federal Transit Administration Deputy Administrator, Robert Jamison, testified on this topic before the House Subcommittee on Highways and Transit on September 26, 2002.  Like his statement, my testimony today draws upon the findings of the 2002 Conditions and Performance Report, which is in final clearance.  A summary of the major findings of the report with respect to transit is attached to this statement. 

I am pleased to report that record levels of investment in transit by Federal, State, and local governments have improved transit conditions and increased transit capacity and utilization in America.  Between 1990 and 2000, total transit capital investment spending doubled, from $4.5 billion to $9.1 billion.  The pace of growth in State and local spending increased the State and local share considerably, from 41.9 percent in 1990 to 52.8 percent in 2000.

These increased investments reflect growing recognition of the important benefits that public transportation provides to our communities and our Nation.  Public transportation is an essential thread in the fabric of America, resulting in greater personal freedom, enhancing the economic vitality of our communities, and making our Nation safer and healthier. 

Whether to reduce travel time, ease the stress of a daily commute, or contribute to a healthier environment, more and more Americans are choosing to ride transit.  Public transportation provides people with mobility and access to employment, community resources, medical care, and recreational opportunities in communities across America.  It benefits those who choose to ride, as well as those who have no other choice:  over 90 percent of public assistance recipients do not own a car and must rely on public transportation.  Public transit provides a basic mobility service to these persons and to all others without access to a car.  Greater accessibility to public transportation and the development of paratransit services has significantly increased mobility for people with disabilities.

The incorporation of public transportation options and considerations into broader economic and land use planning also helps communities expand business opportunities, reduce sprawl, and create a sense of community through transit-oriented development.  By creating a locus for public activities, such development contributes to a sense of community and can enhance neighborhood safety and security.  For these reasons, areas with good public transit systems are economically thriving communities and offer location advantages to businesses and individuals choosing to work or live in them.  And, in times of emergency, public transportation is critical to safe and efficient evacuation, providing the resiliency America needs in its emergency transportation network.

In addition, every trip on public transportation helps to reduce road congestion and automotive emissions, and contributes to meeting local air quality goals.  Public transit agencies are also contributing to a cleaner environment by using clean natural gas and other alternatively fueled buses, and high occupancy transit vehicles that move more people at lower energy cost.  The Intermodal Surface Transportation Efficiency Act of 1991 (ISTEA) and Transportation Equity Act for the 21^st Century (TEA-21) have played an important role maintaining and improving the condition and performance of America’s transit systems.  This, in turn, has played an important role in attracting passengers to transit.  Providing communities with the continued resources to make investments that will attract new riders and encourage even more regular ridership could help America achieve significant reductions in energy consumption and improve air quality without imposing new burdens on industry.  

Finally, public transportation is an important component of our Nation’s emergency response and evacuation plans in the event of natural disasters or terrorist incidents.  Transit vehicles often serve not only as a means of moving people away from affected areas, but also as an important means to transport emergency workers to the site or as a temporary shelter for both workers and victims.

Mr. Chairman, we believe that giving State and local governments additional flexibility to choose the best means of dealing with local transportation problems from among the variety of potential solutions will help the Nation meet the growing demand for improved transportation.

The Conditions and Performance Report provides detailed statistical information.  Rather than repeat that detail, I would like to provide an overview of the state of transit assets and operations, and then discuss some additional perspectives on the following two key issues:  1) short-term investment needs, and 2) the implications of increased investments in transit.   

Overview

Infrastructure and Ridership Growth.  The growth in capital investment under ISTEA and TEA-21 has resulted in a significant expansion of the Nation’s transit infrastructure, particularly rail.  New and modernized transit vehicles and facilities have prompted dramatic increases in transit use, reflected in an increase in the number of passenger miles traveled, which grew by 12.2 percent between 1997 and 2000.  Growth in ridership on rail grew at twice the rate of growth in non-rail transit ridership.  At the same time, vehicle occupancy rates reached a new high in 2000 as a result of increased occupancy rates on rail vehicles.  Vehicle occupancy rates for buses, on the other hand, have declined since the last report, suggesting that the public is looking for the higher quality and reliability that rail has been able to provide.  FTA is encouraging local transit systems to consider the introduction of a variety of improvements to bus service that will begin to improve quality of this lower-cost transportation alternative, including exclusive bus lanes, traffic signal preference, and limited stops.  While these features are common to some of the most successful bus rapid transit systems, they can often be effectively applied to regular bus service, as well, to improve ridership.    

            Vehicle and Facility Conditions.   Increased capital investments have also reversed the decline in the physical condition of transit vehicles and slowed the deterioration of bus and rail facilities.  Vehicle conditions remained relatively constant between 1997 and 2000, indicating that recent investments were sufficient to maintain conditions.  Changes in the condition of various types of rail and bus facilities have varied.  Station conditions, for example, have improved significantly, and track conditions have remained constant.  The condition of power systems and structures has improved somewhat, but it is estimated that 20 percent of such structures are in substandard conditions. Yard facility conditions, which have been impacted by increases in the size of transit fleets, have declined slightly, but all remain in adequate or better condition.

Estimated Long-Term Investment Requirements.  The Cost to Maintain Transit is estimated at $14.84 billion per year.  This represents the estimated average annual capital cost for the 20-year period from 2001 to 2021 to maintain transit conditions and performance expressed in year 2000 dollars from all sources – Federal, State, and local governments.    This investment would allow transit to keep conditions and service quality at current levels, while growing ridership at the modest 1.6 percent per year average rate included in Metropolitan Planning Organizations’ long-range plans.  The Cost to Improve Transit is estimated at $20.62 billion per year.  This figure represents the estimated average annual capital cost to raise conditions and performance to “good,” again expressed in year 2000 dollars. 

Short-Term Investment Needs

The Conditions and Performance Report makes long-term projections of investment needs and reports a single “average annual” investment requirement for the entire 20-year period.  Due to a variety of factors, including the fact that the amount of transit infrastructure to be maintained will grow as new investments are made, the estimated investment needs in the near-term are, as one would expect, measurably lower than the projected investment needs in the out-years.

As shown in Table 1, below, estimated expenditures are projected to be sufficient to not only maintain conditions and performance through 2003, but to begin to tackle the backlog of investment needs[1], and improve transit conditions and performance, as well.  The model projects that, in 2004, $12.1 billion in capital expenditures would maintain current conditions and performance, and $20 billion would be needed to improve transit conditions and performance to “good.”

Implications of Increasing Investment in Transit

In 2000, Federal funds accounted for 17 percent of all (capital and operating) transit funding.  State and local funds represented 51 percent of transit funding, and system-generated revenue accounted for 32 percent of funding. 

Between 1990 and 2000, total transit capital investment spending doubled, from $4.5 billion to $9.1 billion.  While Federal investment in transit capital increased by an impressive 62 percent between 1990 and 2000, local spending increased even more dramatically, more than tripling over the decade to $3.8 billion in 2000.  By 2000, combined State and local funding capital investments in transit represented over half of the Nation’s total capital spending on transit.  The growth in local capital investment is particularly impressive in light of the fact that beginning in 1998, Federal formula funds could not be used for operating expenses in areas with populations over 200,000. 

The dramatic increase investment signals a significant shift in America’s perception of the value of investing in transit.  Communities throughout America recognize that their investment in transit is more than paid back through economic growth, increased mobility, and an enhanced quality of life.  

As you know, one important source of funds for new transit capital investment projects is the Section 5309 “New Starts” program.  In 2000, $0.98 billion was invested by the Federal Government through this program.  In 2003, the President has proposed spending $1.21 billion on New Starts.  The President has also proposed a 50 percent cap on the Federal match for such projects.  This proposal reflects not only the willingness of communities to share equally in transit investments, but also the hard reality that more and more communities will be seeking such funds in the future.  We believe that this proposal will not only permit scarce Federal resources to help more communities, but will also recognize and reward communities that embrace transit as a vital part of their community.

Conclusion

Mr. Chairman, I am pleased to report that America’s investment in public transportation is reaping substantial benefits and we continue to make progress in the conditions and performance of our transit assets.