TESTIMONY
OF WILLIAM W. MILLAR
PRESIDENT
AMERICAN
PUBLIC TRANSPORTATION ASSOCIATION
BEFORE
THE
HOUSE COMMITTEE ON GOVERNMENT
REFORM
ON THE PERFORMANCE AND
FUNDING
OF THE WASHINGTON METROPOLITAN AREA
TRANSIT
AUTHORITY’S METRO SYSTEM
(Download
in Adobe PDF format)
*******
February
18, 2005
SUBMITTED BY
American
Public Transportation Association
1666 K Street, N.W.
Washington,
DC 20006
Tel: (202) 496-4800
Fax:
(202) 496-4324
Mr.
Chairman and members of the Committee, on behalf of the American Public Transportation
Association (APTA), thank you for this opportunity to testify on the investment
needs and other issues relating to the Washington Metropolitan Area Transit Authority’s
(WMATA) Metro system. In your invitation you presented three specific questions
on these topics, which are addressed below.
ABOUT
APTA
APTA is a nonprofit international
association of over 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. Over
ninety percent of persons using public transportation in the United States and
Canada are served by APTA member systems.
OVERVIEW
At
the outset, Mr. Chairman, it is clear that Metro provides a vitally important
service to the people of the Washington metropolitan area, and it is equally clear
from an industry perspective that Metro does so in a very capable, professional
and effective manner. Both literally and figuratively, Metro helps tie this vital
metropolitan region together, and as the region grows Metro must be able to grow
along with it to be able to continue to provide critical mobility services to
all its citizens.
PERFORMANCE
MEASUREMENT
The Committee asked
that I address how transit systems measure their performance, and whether there
are benchmarks against which Metro’s performance could be evaluated. APTA does
not evaluate nor rate the performance of transit agencies. Transit systems around
the country and the communities they serve vary significantly in size, operating
characteristics, and even in the types of services they provide making such comparisons
difficult at best. But APTA does encourage and support information sharing and
peer review among our transit agency members as an effective way to continue to
improve their practices, provide better customer service, and earn the public’s
trust in the use of their tax dollars. We learn important lessons from these activities.
In
this regard, just last month a Blue Ribbon Panel sponsored by the Metropolitan
Washington Council of Governments (COG), the Federal City Council, and the Greater
Washington Board of Trade followed up on the work of a Brookings Institution study
published in June 2004 and issued a report on Metro’s funding future. Mr. Chairman,
I have worked in the transit industry for 33 years, and I support the conclusions
of both reports. There is no question that WMATA is an effective and efficient
provider of public transportation given the constraints under which it must work,
just as there is no question that the system faces enormous demand pressures and
lacks critically needed revenues to successfully carry out its mission.
The
Blue Ribbon Panel used data from the Congressionally mandated National Transit
Database to compare Metro’s productivity with two dozen other large metropolitan
transit agencies. The Panel reviewed information that would allow a benchmarking
of how well WMATA performs in the use of available resources and productivity
in achieving results from those resources. It found that Metro is an industry
leader in using its resources effectively.
In
June, 2004, the Brookings Institution’s Center on Urban and Metropolitan Policy
examined Metro’s financial structure in a report titled Washington’s Metro:
Deficits by Design. The report noted that GAO in 2001 found Metro to provide
"sound policies, programs, and practices," despite ongoing funding challenges;
and that its operations are fiscally sound. For instance, the Brookings study
reported that of all rail systems only the New York City subway recovers more
of its operating costs through fare revenues. For bus systems, only two of similar
size recover as much through the fare box.
The
conclusion of the Brookings Institution’s report, which led to its pessimistic
title, is that the system faces an "extraordinary" lack of dedicated
funding sources that has left it vulnerable to recurring financial crises. To
avoid these crises and put Metro on a sound financial footing, the report recommends
the creation of a dedicated funding source, such as a regional sales tax.
In
short, both reports echo common themes: while Metro is effectively managed and
operated it needs a dedicated source of funding to address the inevitable future
growth of operating expenses and capital needs.
Mr.
Chairman, let me also address a related issue – labor costs. One of APTA’s private
sector members, John A. Dash and Associates, recently released its annual "Transit
Labor Update" in which it compiles and analyzes a large amount of data concerning
labor costs in the public transportation industry. While the report contains much
information, two items are particularly relevant to this hearing:
In reviewing real wage changes in the U.S. private industry
sector and comparing them with real wage change among major U.S. public transit
systems, it found that since 1996, real wages in the public transit industry have
grown more slowly than those in the private sector.
-
In reviewing multi-year labor contracts negotiated at 57 transit agencies including
WMATA in 2004, the study shows that Metro top hourly wage rate increase for bus
operators was the 12th lowest of the 57 agencies in the group and that
Metro’s rate of increase was only 57 percent of the average increase among the
group. Clearly, Metro is doing its part to hold the line on labor costs which
is by far the largest component of Metro’s operating expenses.
BEST
PRACTICES FOR FUNDING AND IMPLEMENTATION OF CAPITAL IMPROVEMENT PROGRAMS
Let
me turn now to the committee’s second question regarding the best practices used
by transit systems for the funding and implementation of capital improvement programs.
My experience is that growing, dedicated funding sources for operating and capital
budgets represent the best solution for effective public transportation system
funding. This is true at the federal, state, and local levels. At the federal
level it is proven by the success of the federal surface transportation programs
authorized by TEA 21. That historic 1998 federal transportation legislation continued
the longstanding dedicated funding stream for highways and transit in the form
of the federal gasoline tax, but for the first time guaranteed that the funds
authorized in that legislation would be made available each year through the appropriations
process. With that dedicated and guaranteed funding in place, transit systems
and state departments of transportation have been able to make long range transportation
decisions and function much more effectively. Indeed, transit service and ridership
have expanded nationwide. We look forward to working with Congress in getting
TEA 21 reauthorized this year with sufficient resources to address critical transit
and highway investment needs, and with a continuation of the guaranteed funding
mechanisms.
In terms of transit funding
at the state and local level, let me bring to the Committee’s attention the U.S.
Department of Transportation’s Bureau of Transportation Statistics report, 2003
Survey of State Funding for Public Transportation, which describes how each
of the 50 states and the District of Columbia fund transit. Mr. Chairman, I would
be pleased to submit the report for the record. It shows that many states, including
those that have large systems like Metro, provide a dedicated funding source for
transit operations. Of the different sources for dedicated funding streams, 15
states use a gasoline tax, 10 states use motor vehicle or rental car sales taxes,
eight states use registration, title, or license fees, eight states use bond proceeds,
and seven states use a sales tax.
Both
the Brookings Institution report and the COG Blue Ribbon Panel report cited above
recommend that the Washington metropolitan area adopt dedicated funding sources
for Metro. The Brookings Institution report specifically points out how Metro
is unique in its lack of such a program among transit agencies of similar size.
Among other things, the report noted that while other transit systems around the
country derive an average of 34.7 percent of their combined operating and capital
budgets from dedicated sources, Metro receives only 1.6 percent from such sources.
Because of Metro’s rising costs, the report states, state and local governments
are finding it necessary to raise local taxes or cut services to provide for operations
and capital needs. A dedicated funding source would provide financial stability
not only for Metro, but will also allow state and local governments to better
plan for future Metro services.
The
stability of guarantees is important, especially to capital funding, because capital
projects are built and paid for over long periods of time. Guaranteed funding
sources ensure that capital projects will receive the resources they need to be
completed efficiently; the alternative is completing projects on a piecemeal basis
as annual appropriations are approved, the situation currently faced by Metro.
The Brookings Institution report notes Moody’s financial rating service calls
Metro "vulnerable" to multiple, annual appropriations processes; a label
that makes it more difficult to attract private funds and more costly to finance
major capital projects through bonding.
The
improvements that would come from a dedicated funding source for Metro are important
for the future of the region. The Washington, D.C. metropolitan area has the fourth
worst congestion in the United States. The COG estimates the metro area’s population
will increase by 36 percent by 2030, meaning congestion is only going to increase
if nothing is done. According to the Texas Transportation Institute, without Metro
traffic congestion would be worse by 50 percent and cost existing rush hour motorists
$1.2 billion more per year in time and fuel. Noted conservative Paul Weyrich of
the Free Congress Foundation demonstrates in his study How Transit Benefits
People Who Do Not Ride It that transit benefits not just those who use it
but benefits as much or even more those who do not use it - from reduced congestion,
increased property values, and as an alternative form of transportation. Mr. Chairman,
I would also be pleased to submit this report for the record. In short, public
transportation is a good public value.
Metro’s
success in alleviating congestion in Washington, D.C. is obviously important to
the federal government, as the COG panel notes that its employees are the "mainstay"
of Metro’s ridership. Clearly, the citizens of Virginia, Maryland, and the District
of Columbia benefit from Metro’s service, as does the federal government. A dedicated
funding source would put Metro on the right track for the future.
PARATRANSIT
SERVICES
Finally, the Committee
has asked me to discuss the issue of increasing paratransit costs, and what lessons
our members have learned to address those rising costs. Mr. Chairman, APTA’s membership
is dedicated to providing mobility options for all persons, especially those with
disabilities. They are among our most important customers. APTA has committees
that meet regularly to examine mobility services, best-practices, and facilitate
information sharing. We have been working cooperatively with human service organizations,
the federal government, and persons in the disability community in futherance
of Americans with Disabilities Act (ADA) goals.
Our
members have been making their vehicles, facilities, and services accessible and
providing complementary paratransit services. Despite increased accessibility
of fixed-route services, demand for paratransit services has skyrocketed in the
last 15 years. For example, over the period from 1993 to 2003, the number of paratransit
passengers served nationwide rose by 37 percent, and vehicle miles traveled to
serve them has increased by 113 percent. While this increase in mobility has been
extremely beneficial to many persons with disabilities and the communities in
which they travel, it has had an obvious impact on transit agencies’ budgets as
capital costs for paratransit services rose by 163 percent, and operating costs
increased nearly 200 percent in the same time period. In 2003, transit agencies
spent $2.36 billion (8.8 percent of their operating budgets) on paratransit services
for 110.8 million riders.
Many transit
systems around the country are facing the prospect of having to reduce fixed route
services to help defray the added costs of paratransit service, while others are
exploring a range of options to try to manage these rising costs while not compromising
needed mobility. Mr. Chairman, it is important to recall that the ADA was meant
to make fixed route service accessible to persons with disabilities, with complementary
paratransit service available for those unable to use the fixed route system.
Our industry is focusing on this intent of the ADA and improving fixed-route accessibility
to encourage greater use of fixed route systems by persons with disabilities,
but paratransit use and attendant costs are continuing to rise on many systems.
There is a related area where much
can be done to improve mobility options for persons with disabilities and improve
service efficiency and effectiveness. We believe the federal government can help
Metro and transit agencies nationwide by better coordinating transportation services
provided under federally-funded human service programs with local transportation
providers. A 1999 GAO report on the subject found that 62 different federal human
service programs provide transportation assistance to public and private transportation
providers. The estimates for total spending on these programs by the federal government
ranges from $4 to $7 billion annually - close to the total annual federal investment
in public transportation alone. Better coordination of these services could benefit
those being served, and could help public transportation providers defray some
of the growing costs of these services. We applaud the Federal Transit Administration
and other federal agencies for their efforts in this regard through the "United
We Ride" effort and pledge to assist them as they proceed with this important
work.
Conclusion
Mr.
Chairman, from my perspective of 33 years in public transportation, including
the last eight as head of the industry’s trade association, and as a regular Metro
customer, Metro is a well-run transit system that provides clear benefits to the
citizens of the Washington, D.C. metropolitan area whether they use it or not.
It is difficult to imagine what this area would look like if Metro’s 1.4 million
daily riders including hundreds of thousands of federal employees drove instead
of using Metro. Anticipated population growth makes it even more important that
Metro be able to meet its rising capital and operating costs. As the region grows,
so too must Metro grow - and transit industry experience shows that a dedicated
and growing source of revenue is the best way to address transportation planning
needs of metropolitan regions such as ours.
Thank
you for holding this hearing and your long time support of public transportation.
I would be pleased to answer any questions you may have or supplement my testimony
with additional information as you might desire.
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