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President-elect Barack Obama this week renewed his call for a large economic stimulus package that would provide record-breaking levels of investment in U.S. transportation infrastructure.  While the 110th Congress plans to continue its "lame duck" session this week to consider aid for domestic automakers, the House and Senate are not expected to move on a new stimulus bill this month.  Democratic leaders will likely wait until the 111th Congress convenes in January to present a new stimulus package or a series of stimulus bills to spur economic activity.   With the health of the U.S. economy deteriorating significantly in the past two months, both Congressional leaders and President-elect Obama have called for a much higher level of overall spending in any new stimulus bills than the $61 billion package passed by the U.S. House of Representatives earlier this year.  The previously House-passed stimulus bill would have provided $4.6 billion for new public transportation investment and a smaller bill considered in the Senate would have provided $2 billion for transit. 

Earlier today, APTA President William Millar sent letters to President-elect Obama and key Members of Congress urging them to provide no less than $47.8 billion for public transportation in any forthcoming stimulus legislation.  A newly updated survey of APTA members has identified $12.2 billion of "ready-to-go" transit projects that could be advanced within 90 days, and a recent transit needs estimate shows that $47.8 billion in supplemental transit capital projects could be initiated within the next 2 years.  If $47.8 billion were invested in public transportation immediately, more than 1.3 million new green jobs could be created.  To ensure that new capital investment can be utilized quickly, APTA has urged Congress to waive any local match requirements. 

APTA has also urged the President-elect and Congress to include funding to transit systems which are trying to cope with dramatic reductions in state and local tax revenues for transit related to the economic slowdown at the same time that they are trying to serve record-breaking growth in ridership on U.S. transit systems.  APTA announced this week that more than 2.8 billion trips were taken on public transportation in the third quarter of 2008 -- an increase of 6.5 percent over the third quarter of 2007 and the largest quarterly increase in public transportation ridership in 25 years.  Transit agencies want to provide good service to these new customers and do not want to discourage them from using transit with service cuts or increased fares that are needed to meet operating costs.  To view the letter, click here.

While the details of forthcoming stimulus bill or bills are not available, it is likely that some or all new transit funding will be distributed under existing SAFETEA-LU formulas, such as the urban and rural formula programs.  Examples of "ready-to-go" projects such as the APTA Economic Stimulus survey have been very valuable in demonstrating the ability of transit investment to quickly spur economic activity, but it is unlikely that stimulus legislation will fund individual projects, with the possible exception of projects currently under evaluation in the New Starts/Small Starts program.  

APTA members need to contact their Members of Congress immediately and urge support for transit investment in stimulus legislation.  APTA staff will continue to discuss stimulus proposals with Congressional staff and transition officials for the incoming Administration in the coming weeks. More details will be provided as they become available. 

Congress Acts on Transit SILO/LILO Problem

As the 110th Congress winds down this week and soon adjourns sine die, the last legislative issue likely to be considered is the auto bailout bill.  The bill that was approved by the House last night includes language that would direct the president's designee – likely the U.S. Treasury Department – to serve as guarantor for SILO/LILO transactions approved by the Federal Transit Administration (FTA) prior to January 1, 2006.  The language specifies that any payments made by the federal government as a result of such guarantees must be recouped from transit agencies.  This language was added to ensure that there would be no cost to taxpayers or the federal government as a result of the federal guarantees, which is consistent with APTA's effort on this issue.  The Senate is expected to act on this measure within the next day, and it is important that APTA members contact Senators on this issue.

The guarantees are simply being used to replace the loss of triple A ratings on securities used to make lease payments – mostly treasury bills – which are not in danger of default.  No one has asserted that these securities are in danger of failing to meet lease payments under the transactions, but the loss of the triple A ratings has put numerous large transit agencies that entered into such transactions in danger of being forced to pay banks and investors more than $2 billion in payments.  Having to make such large payments could result in transit agencies being forced to cut service or raise fares to cover potential costs, at the very time that transit ridership is growing dramatically.  APTA has also sought to modify language in the bill to ensure that it covers all such transit agency transactions, including those that were approved by states and not just the FTA.  APTA has also discussed with congressional staff the possibility of imposing a 100 percent excise tax on proceeds that transit agencies would have to pay to investors, over and above the amounts in defeasance accounts, but that proposal is not included in the current version of the auto bailout bill.  The bill also includes separate provisions that would direct auto manufacturers that receive assistance to analyze the potential use of excess capacity to make vehicles for public transportation. 

The FTA has indicated that it plans to release partial year apportionments that will make 42 percent of fiscal year 2009 funds available to transit agencies, at FY 2008 levels.  These funds were made available by Congress prior to the end of fiscal year 2008 in September through the Consolidated Security, Disaster Assistance, and Continuing Appropriations Act for 2009 (PL 110-329).  This continuing resolution funds the federal government at FY 2008 levels through March 6, 2009.  The 42 percent of the FY 2009 funds year funds (at FY 2008 levels) will be available for immediate obligation.  The FTA has indicated that if Congress acts on a full FY 2009 Transportation Appropriations Bill in January, then the next apportionment would be ready in February, if the new Administration is willing to make the funds available without significant review. 

APTA will send out a subsequent notice as soon as the apportionments are made available.

If you have questions or want more information, please contact Homer Carlisle at (202) 496-4810 or hcarlisle@apta.com.