March 9, 2004
The Honorable William M. Thomas
Chairman
House Committee on Ways and Means
1102 Longworth House Office Building
Washington, DC 20515-6348
Dear Mr. Chairman:
We are writing to register our opposition to proposed legislation that would
end a long-standing and effective financing tool for transit agencies.
Actions by the Senate Finance Committee and the Treasury Department have
effectively halted tax-advantaged leasing transactions that transit agencies
have utilized over the past ten years to generate net returns of approximately
$1 billion. Additionally, in response to a letter from the Treasury Department
to Department of Transportation (DOT) Secretary Mineta, the Federal Transit
Administration (FTA) has suspended review of such transactions. With respect
to the FTA, the pending transactions are no different from the many transactions
the FTA has reviewed and approved in the past. It has been estimated that
the pending transactions, if approved, would provide up to $250 million in
critically needed new revenues. FTA and DOT for two decades have urged public
transit agencies to use innovative financing mechanisms such as leasing transactions
to generate additional revenue.
Revenues from these leasing transactions create and support local jobs, help
agencies address capital investment needs that benefit transit riders, and
deliver other tangible economic benefits. These transactions have been a mainstream
financing vehicle for almost every major transit agency in the United States
over the past ten years. In a recent research note, Standard & Poor's
wrote, "…the elimination of sales-in-lease-out transactions stands
to reduce the ability of municipal entities, especially transit agencies,
to effectively implement their capital plans or to fund operating needs."
The renowned financial market analyst further warned, "If this proposal
is enacted, Standard and Poor's will monitor, on a case by case basis, the
effect it has on municipal entities, particularly transportation agencies."
With respect to the FTA, the pending transactions are no different from the
many transactions the FTA has reviewed and approved in the past. It has been
estimated that the pending transactions, if approved, would provide up to
$250 million in critically needed new revenues. FTA and DOT for two decades
have urged public transit agencies to use innovative financing mechanisms
such as leasing transactions to generate additional revenue. The sudden suspension
by FTA of its approval and encouragement of these transactions without any
process for comment or hearings seems to be fundamentally unfair if not arbitrary.
The public transportation industry strongly supports the continuance of U.S.
federal tax policy's encouragement of investing in the nation's transit infrastructure.
The preservation of this financing mechanism is critical to our industry.
Accordingly, APTA opposes any legislation that would adversely affect transit
agencies' access to this innovative mechanism, and urges you to support efforts
to get DOT to reconsider the decision to suspend review of transit lease transactions
that are currently pending.
Thank you for your support of public transportation.
Sincerely yours,
| |
Sincerely yours,
|
| |
William W. Millar
President |
WWM/cbo
Alameda-Contra Costa Transit District
_______/s/________________
Rick Fernandez
General Manager
Bi-State Development Agency
_________________________
Larry E. Salci
President/CEO
California Transit Association
_________________________
Josh Shaw
Executive Director
Connecticut Department of Transportation
_________________________
Harry P. Harris
Bureau Chief - Public Transportation
Chicago Transit Authority
_______/s/________________
Frank Kruesi
President
Greater Cleveland Regional Transit Authority
_________________________
Joseph A. Calabrese
General Manager
Los Angeles County Metropolitan Authority
_______/s/________________
Roger Snoble
Chief Executive Officer
Metropolitan Atlanta Rapid Transit Authority
_________________________
Nathaniel P. Ford, Sr.
General Manger/CEO
Metropolitan Transit Authority of Harris County, Texas
_________________________
Shirley A. DeLibero
President/CEO
NJ Transit
_________________________
George D. Warrington
Executive Director
Northeast Illinois Regional Commuter Railroad Corporation (METRA)
_________________________
Philip A. Pagano
Executive Director
Pace Suburban Bus Service
_______/s/________________
Dominick Cuomo
Chief Financial Officer
Peninsula Corridor Joint Powers Board (Cal Train)
_________________________
Michael J. Scanlon
Executive Director
Port Authority of Allegheny County
_________________________
Paul P. Skoutelas
Chief Executive Officer
Sacramento Regional Transit District
_________________________
Beverly A. Scott, Ph.D.
General Manager / CEO
San Diego Metropolitan Transit System
_________________________
Paul C. Jablonski
General Manager
San Francisco Bay Area Rapid Transit
_______/s/________________
Thomas E. Margro
General Manager
San Francisco Municipal Railway
_________________________
Michael T. Burns
Executive Director
San Mateo County Transit District
_________________________
Michael J. Scanlon
General Manager/CEO
Santa Clara Valley Transportation Authority
_________________________
Peter M. Cipolla
General Manager
Sound Transit
_________________________
Joni Earl
Chief Executive Officer
Southeastern Pennsylvania Transportation Authority
_________________________
Faye Moore
General Manager
Southern California Regional Rail Authority
_________________________
David R. Solow
Chief Executive Officer
Tri-County Metropolitan District of Oregon
_______/s/________________
Fred Hansen
General Manager
Washington Metropolitan Area Transit Authority
_________________________
Richard A. White
General Manager/Chief Executive Officer
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