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American Public Transportation Association

 Dr. Beverly Scott, Ph.D., General Manager/CEO, MARTA, and Chair, APTA - On Surface Transportation Investment Needs (Joint Hearing of the House Ways and Means Subcommittees on Oversight and Select Revenue Measures)

6/25/2009
Testimony Of
Dr. Beverly Scott, Ph.D.
General Manager And Ceo
Metropolitan Atlanta Rapid Transit Authority
And
Chair
American Public Transportation Association
Before The
Subcommittee On Oversight
And The
Subcommittee On Select Revenue Measures
Of The House Committee On Ways And Means
Hearing on Surface Transportation Investment Needs

Chairman Lewis, Chairman Neal, and Members of the Subcommittees, thank you for this opportunity to present testimony regarding the next surface transportation authorization bill.  I truly appreciate your interest in improving public transportation service in the United States, and I look forward to working with you as this next authorization legislation moves forward, hopefully in the very near future.

About APTA

The American Public Transportation Association (APTA) is a nonprofit international association of nearly 1,500 public and private member organizations, including transit systems and commuter rail operators; planning, design, construction, and finance firms; product and service providers; academic institutions; transit associations and state departments of transportation. APTA members serve the public interest by providing safe, efficient, and economical transit services and products. More than ninety percent of the people using public transportation in the United States and Canada are served by APTA member systems.

Overview

Earlier this year, we were very pleased to report that, despite falling gas prices and an economic recession, increasing numbers of Americans took 10.7 billion trips on public transportation in 2008, the highest level of ridership in 52 years and a modern ridership record. This news comes at a particularly encouraging time for me and my colleagues within APTA in light of the recent commitment to public transportation investment demonstrated by President Obama and the Congress under the American Recovery and Reinvestment Act.   We are encouraged by what we see as a renewed commitment at the federal level to public transportation and passenger rail investment.

This commitment is important for a variety of reasons. As the members of this committee know, America's population is growing faster than most industrialized nations.  A 2006 cover story in USA Today that asks: “Where will everybody live?” noted that while the U.S. population grew by 100 million people in the past 39 years, it will grow by another 100 million by 2040, producing a population of more than 400 million Americans.  As APTA proceeded through a lengthy industry discussion of its recommendations for the next authorization bill, we also conducted a parallel “visioning” effort, known as TransitVision 2050, in which we projected our industry view of the American transportation infrastructure in the year 2050.  Our vision is that in 2050 America's energy efficient, multi-modal, environmentally sustainable transportation system powers the greatest nation on earth.

The challenge we face in fulfilling that vision rests on our willingness as a nation to commit adequate resources to the task and to provide a predictable mechanism to finance America’s transportation infrastructure.  It is not hard to recognize the many benefits of investment in public transportation. Public transportation provides mobility that contributes to national goals and policies to increase global economic competitiveness, energy independence, environmental sustainability, congestion mitigation and emergency preparedness.

For an individual user, public transportation saves money, reduces carbon emissions and provides people with choice, freedom, and opportunity.  To realize public transportation's many contributions at the national and local levels, to facilitate a doubling of public transportation ridership over the next twenty years, and to address the aforementioned national goals and policies, the American Public Transportation Association (APTA) recommends a federal public transportation program of $123 billion over the next six-year authorization period.  We also support the development of a viable high-speed intercity passenger rail program, either as a title of this authorization bill, or a separate law.

Record Ridership and Growing Public Demand

Nationally, public transportation ridership continues to set record levels. One only needs to ride a train or bus during the morning commute to recognize the growing demand, and to experience firsthand the strains which that demand is placing on existing transit systems. The demand and support for public transportation is also obvious at the ballot box.  Last year, 79 percent of ballot initiatives seeking taxpayer support for transit investment were approved by voters. Clearly, citizens are willing to pay for improved transit service.

People have experienced the high cost of driving, and they have come to realize what an important and valuable alternative public transportation service can be. 

>Earlier this year, APTA announced the results of its 2008 annual ridership report, and the news is both exciting and sobering.  In 2008, public transportation ridership reached 10.7 billion trips and grew 4.0% compared to the same period in 2007. This represents the highest level of public transportation ridership in 52 years, or since 1956. Transit ridership increased while vehicle miles traveled on the nation’s highways actually declined by 3.6%.

We will be challenged to maintain this pace of growth as fare increases, service cuts, rising unemployment and a declining economy begin to affect transit ridership.  As state and local revenues have declined due to the current economy, many systems have had to raise fares or cut service, both of which undermine transit’s ability to attract and serve increased ridership. APTA recently surveyed its members and found that more than 80 percent of public transit systems have experienced flat or decreased funding from local, regional, and state sources.  Among transit systems facing this decreased funding, nine out of ten transit systems (89 percent) were forced to raise fares or cut service, including my own system, MARTA.

Our hope is that given the national priorities to promote energy independence, mitigate climate change, and strengthen the economy, we as a nation will be able to identify resources that allow public transportation systems to continue to carry more passengers. We should not turn our back on the years of progress we have made in rebuilding a quality public transportation system.

These ridership gains force us to look for ways to meet the increased demands on the existing system and to also expand service to meet the growing needs for transit service in communities across the nation.

Transit Investment – State of Good Repair

The maintenance of transit capital assets to ensure a “state-of-good-repair” is critical. Deteriorating systems and equipment simply do not attract new riders, and if allowed to deteriorate long enough, can decrease safety.  Both the National Surface Transportation and Revenue Study Commission, and the more recent report of the National Surface Transportation Infrastructure Financing Commission, highlighted the growing gap between our infrastructure needs and our present level of investment.

The Federal government has long been a strong partner with state and local governments, and public transportation agencies in maintaining its considerable investment in the existing transit infrastructure and also expanding that infrastructure to meet public demand for new service.

Mr. Chairman, when it comes down to it, the real issue before us all is one of investment. Each of the Commission reports contains strong recommendations to the Congress about the investment levels needed to maintain and improve the nation’s public transportation and highway systems.  APTA’s estimate of the total annual resources needed to maintain and improve our public transportation systems, from all sources, is $59.2 billion.  This level of investment assumes ridership growth of just over 3.5 percent annually.  In its “Bottom Line Report for Transportation – 2009,” the American Associations of State Highway Transportation Officials agrees with APTA’s estimate, stating that “if transit ridership growth grows to 3.5%, the level that would double transit ridership over the next 20 years, which would be helpful in reducing greenhouse gas emissions, investment in public transportation would have to grow to $59 billion.”

Separately, the FTA recently released its Rail Modernization Study, prepared in response to the FY2008 Transportation-HUD Appropriations bill conference report.  The report assesses the level of capital investment required to attain and maintain a state of good repair (SGR) for the Nation’s seven largest rail transit operators.  According to this study:

…more than one-third of agencies’ assets are either in marginal or poor condition, indicating that these assets are near or have already exceeded their expected useful life. Assuming assets are permitted to remain in service beyond their expected useful life for a limited time (a realistic assumption based on current agency practices), there is an estimated SGR backlog of roughly $50 billion (2008 dollars) for the agencies under consideration.

We would note that the FTA study is illustrative of the higher costs associated with bringing all of the nation’s rail transit systems up to a state of good repair.  For example, my own system, MARTA—which began heavy rail service 30 years ago—has now reached middle-age.  And, as our infrastructure ages, it is becoming increasingly costly to maintain in a state of good repair.

Following testimony I provided earlier this year in the Senate Banking Committee, I was asked to address a perceived conflict between public transportation system expansion and the responsibility to focus on maintenance of a “state of good repair.”  I emphasized the point that we must balance both the growth of transit systems aimed at meeting the increased population, economic, mobility and environmental needs of our communities, as well as address critical issues of maintaining a state of good repair.  I tell people all the time, the best marketing that I do is the quality of the service that I put out the day before.  The bottom line is that, we must acknowledge the three areas necessary to keep a transit system viable: day-to-day operation and maintenance; system preservation and state of good repair; and then expansion.

All levels of government—federal, state, regional, and local—must increase their financial investment in transportation to address capital needs not met by current investment levels, and the federal government must take a strong role in the process. One of the proposals in APTA’s authorization recommendations is the creation of incentives to increase state and local investment in public transportation. Only through a cooperative and coordinated effort among all levels of government to invest in transit assets and services can we fully address the needs of our communities and your constituents.


The Case for Investment

Mr. Chairman, we are pleased that the framework presented by Chairman Oberstar and the House Transportation and Infrastructure Committee presents us with a terrific opportunity to meet the many state, regional, and local needs across this country, but to also address numerous public policy challenges facing the nation as a whole.  APTA strongly urges the Ways & Means and Transportation & Infrastructure Committees to work together to fund a strong public transportation program.

Energy and Environment

APTA has urged Congress to use public transportation in the effort to ensure clean air and the health of our residents.  Reduced air pollutants and better personal health and fitness are core American goals -- and public transportation is a good way to make these goals a reality.  Twenty eight percent of all greenhouse gas emissions in the U.S. are produced from the transportation sector, and more public transportation investment is needed to reduce these emissions.  APTA research prepared by Science Applications International Corporation (SAIC) found that it takes just one commuter switching from daily driving to using public transportation to reduce the household carbon footprint by 10 percent.  If that household driver gives up the second car and switches to public transportation for all solo travel, the household can reduce its carbon emissions up to 30 percent, which is a greater reduction than if the household gave up use of all electricity.  If quality transit service is available, public transportation is the single most effective way an individual can reduce his/her carbon footprint.  However, we need to give more Americans access to public transportation so they can make that choice.  The latest census showed that only 53% of U.S. households have access to any public transportation.  Increased investment in our public transportation system will give them that choice.

As we have cited here in Congress on numerous occasions, transit use results in a significant net reduction in greenhouse-gas emissions and fuel consumption, and increased transit use must be a central strategy in federal climate and energy legislation.  Existing public transportation usage in the U.S. saves 37 million metric tons of carbon dioxide annually — equivalent to the emissions from the electricity generated for the use of 4.9 million households or every household in Washington DC; New York City; Atlanta; Denver; and Los Angeles combined. Public transportation use saves the U.S. the equivalent of 4.2 billion gallons of gasoline annually — and more than 11 million gallons of gasoline per day. That amount of savings is equivalent to more than three times the amount of oil we import from Kuwait each year. Mr. Chairman, it is for these reasons that APTA is calling for legislative efforts to ensure that future revenue from any climate change legislation will be reinvested in transportation infrastructure and operations that reduce greenhouse gases and fuel consumption.

Mobility and Congestion Mitigation

Congestion in our large metropolitan areas continues to be a problem, and will only get worse as most of the future population growth is projected to occur in the largest metropolitan areas.  Public transportation use is a critical component of reducing congestion.  According to the most recent Urban Mobility Report from the Texas Transportation Institute (TTI), Americans living in areas served by public transportation saved 541 million hours in travel time and 340 million of gallons of gasoline annually, at a cost of $67.6 billion.  Without public transportation, congestion costs would have been $10.2 billion more that year.

Quality of Life

Critical issues such as housing and transit-oriented development demonstrate how public transportation promotes the practices and principles of livable communities and sustainable development. As our urban areas continue to grow it is important to realize that public transportation acts as a catalyst for promoting compact, connected and mixed-use development. These things make the provision of all transportation, and public services and facilities more efficient and effective while simultaneously helping achieve energy and environmental goals.

And as I know that issues of seniors and health care are of particular interest to this Committee, it is paramount that your investment decisions consider the related benefits of public transportation.

Transit-friendly, walkable communities reduce reliance on motor vehicles and promote higher levels of physical activity. As a result, the role of community design in promoting more active lifestyles and alternatives to motor vehicle use has become much more significant in the effort to improve the health of all Americans.

For many Americans, inadequate transportation severely limits access to essential medical care.  Limited access is a particular problem among low-income and minority households.  Too many low-income families miss essential doctor appointments because of inadequate transportation.  The role of public transportation and transit agencies in providing access to essential healthcare is growing.

It is also becoming more important to our aging population.  Over the next two decades, America's baby boomers will reach retirement age, with the U.S. Census Bureau projecting the number of Americans age 65 or older to double to more than 70 million by 2030.  In a 2005 White House Conference on Aging, mobility for older Americans was ranked the third most important issue on a 73-item list -- ahead of Medicare reform.   More than 50 percent of non-drivers age 65 and older stay home on any given day partially because they lack public transportation options.  Older non-drivers have a decreased ability to participate in the community and the economy, making 15 percent fewer trips to the doctor, 59 percent fewer shopping trips and restaurant visits, and 65 percent fewer trips for social, family and religious activities.  Public transportation can give these citizens a way to participate in society and enable individuals to age in place, thus allowing them the prolonged fulfillment and satisfaction of living in their own homes while at the same time requiring only one-fourth as many resources than if they were living in an institution.

APTA Proposal

As stated previously, APTA’s proposal recommends an investment of $123 billion over six years.  This proposed increase in the program is offered with a goal of meeting at least 50% of the estimated $60 billion in current annual capital needs by the end of the authorization period and to support a projected doubling of transit ridership over the next 20 years.

We are also urging that the transportation funding guarantees should be strengthened to ensure that authorized funds are appropriated each year to allow for the long-range planning, financing, and leveraging needed to advance necessary investment in public transportation capital projects and preserve and maintain the existing public transportation infrastructure.

We recognize, however, that the guarantees can only be as strong as the revenues backing them up, and APTA recommends that Congress take the necessary steps to restore, maintain and increase the purchasing power of the federal motor fuels user fee to support a significant increase in the federal investment for the public transportation program. In order to meet the full range of needs, we will have to employ multiple financing strategies.

First and foremost, funding must be sufficient to address the capital investment needs called for by the nation’s population growth, economic and personal mobility needs (including the reduction of traffic congestion), environmental and sustainability needs, and of our aging population.  While meeting our capital expansion needs, funding must also be sufficient to address issues of state of good repair across so many of our aging public transportation systems nationwide.

Second, it is imperative that the funding for transportation investment be stable and reliable, whether they be from federal, state, or local sources, or from public transportation-generated revenues or public-private partnerships.  Major transit capital investments often require advance planning and multi-year construction programs.

Third, it is critical that the transportation finance legislation developed by this Committee recognize that not all financing mechanisms and revenue generators work at the same level of efficiency and effectiveness for all modes.  Our proposal recommends legislation that would promote the development of revenue generated from innovative financing mechanisms, such as public private partnerships, tolling and congestion pricing to supplement current revenue streams.  However, infrastructure banks, private activity bonds, and loan programs such as Transportation Infrastructure and Finance Act program (TIFIA) and the Railroad Innovation and Improvement Financing Program (RRIIF) that require payback will not sustain an ongoing transit program.  They can help public-private partnerships work, but transit PPPs are not a revenue source but rather a management tool.

We want to emphasize that the certainty and predictability of the dedicated funding within the Mass Transit Account of the Highway Trust Fund, and channeled through the Federal Transit Program, has truly served the needs of the public transportation industry, and allowed agency finance professionals to take advantage of and leverage a multitude of financing arrangements. 

For many years the federal gas tax has served supported the national program and served effectively as a user fee.  While trends and market forces suggest that the gas tax is not the surrogate for use that it once was, it is certain to continue to be a viable source in the short run.  The most sustainable, forward-looking and outcome-oriented approach is the VMT fee, the solution strongly endorsed by both commissions.   Because the systems, methods and infrastructure to implement a national system are years away, the augmented gas tax/refinery fee needs to be the bridge to an ongoing national VMT fee.

We hope that the Committee and the Congress will review our full list of authorization recommendations as you prepare to deal with this critical legislation.

CONCLUSION

In summary, we thank you very much for actively soliciting our input as you move forward on this next authorization of surface transportation programs and urge the Committee to support the Federal Transit Program with a six-year investment level of at least $123 billion. The next program will absolutely require a wide range of financing options, but for the immediate future, we feel strongly that the base program must restore and increase the purchasing power of the Federal Motor Fuels User Tax while we concurrently move with a true sense of urgency to develop and implement a national transportation future funding model that is both economically and environmentally sustainable. We also need to have funding predictability, both for our agencies and our private sector partners.

Chairman Lewis and Chairman Neal, we thank you and the Committee for allowing us to provide testimony on these critical issues. We look forward to working with you and the members of the Committee as you work to develop this next critical authorization bill.

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