February 21, 2012

Background

Legislation currently pending for consideration by the U.S. House of Representatives would make drastic changes to the method by which federal public transportation programs are financed. Provisions included in the Ways and Means tax title (H.R. 3864), adopted as part of H.R. 7, the ‘‘American Energy and Infrastructure Jobs Act of 2012,” would eliminate the Mass Transit Account of the Highway Trust Fund and would terminate the 2.86 cents in dedicated funding from fuels tax receipts that public transit currently receives.

The bill moves those revenues into the Highway Account to support highway investment and replaces the current Mass Transit Account with a new Alternative Transportation Account that is funded with a one-time appropriation of $40 billion. The new Alternative Transportation Account would fund the federal transit program in fiscal years 2013 through 2016, as well as the Congestion Mitigation and Air Quality (CMAQ) program and several smaller highway programs. Upon the expiration of the legislation at the end of Fiscal Year (FY) 2016, there would no longer be any revenue or funding source available for federal public transportation programs, making all future funding subject to annual appropriations or new revenue decisions.

All of the motor fuels tax revenues currently directed to the Highway Trust Fund (including those that now go into the Mass Transit Account) are less than the amount needed to fund authorized programs funded from the Highway Account, thereby requiring supplemental revenues or additional appropriations to fund the highway spending levels approved in H.R. 7. The $40 billion one-time appropriation directed to the Alternative Transportation Account is also inadequate to meet the combined authorization levels for the federal public transportation programs and the additional CMAQ and highway programs.

Amendment to Restore Mass Transit Account and Dedicated Revenues

In an effort to restore the funding of public transportation to the method and structure provided under current law, a bipartisan amendment to restore the Mass Transit Account and return dedicated motor fuels tax revenues to public transportation has been developed by Representatives Nadler (D-NY), LaTourette (R-OH), Blumenauer (D-OR), Gibson (R-NY), Crowley (D-NY), Turner (R-NY), Rangel (D-NY) Grimm (R-NY), Lewis (D-GA), Fitzpatrick (R-PA), Norton (D-DC), Hayworth (R-NY), Lipinski (D-IL), and Dold (R-IL). The amendment would strike all references to the Alternative Transportation Account and restore the Mass Transit Account as a subaccount of the Highway Trust Fund. It would strike provisions of the bill that terminate the 2.86 cents in dedicated funding from fuels tax receipts that public transit now receives, as well as language in the bill that transfers FY2012 receipts to the Highway Account. Further, it would return the CMAQ and other highway programs to their current funding structure under the Highway Account. Finally, the amendment would take the $40 billion one-time appropriation and split it between the Highway Account and the Mass Transit Account in a manner proportional to the current 80-20 percentage split that has governed all new revenues to highways and public transportation since 1983.

It is not yet clear if the Rules Committee will allow a vote on this amendment. APTA is urging a full floor vote on this important amendment prior to final passage. APTA members should ask their Members of Congress to support a rule that permits a vote on the amendment on the House floor and to support this amendment when it comes up on the House floor.

Talking Points

• Public transportation is an important part of the nation’s entire transportation system. Federal investment in public transportation improves the efficiency of the system in communities of all sizes. It reduces congestion, provides access to jobs, and supports private sector jobs in communities across the country.
• Motor fuels tax revenues that are now dedicated to public transportation investment should remain dedicated to public transportation.
• New revenues are needed to finance transit and highway programs authorized in the bill and those revenues can and should be used to supplement current revenues now dedicated to transit and highways.
• The financing proposal to fund public transportation investment with a one-time appropriation would leave transit without any funding source when those funds run out in 2016.
• Reliance on the appropriation of general funds to support public transportation will inject uncertainty and unpredictability into the funding process for transit, inhibiting the ability to finance projects and increasing the cost for transit systems, state, and local governments to bond against federal funding, undertake multi-year transportation projects or leverage private investment.
• Rising gas prices will increase demand for transit--Preserve the Mass Transit Account! Support the Nadler, LaTourette, et. al. amendment to H.R. 7.