Encourage State Transit Investment


ATU Supports

The Flexibility Incentive Grant Program, which would encourage States to increase their level of spending on public transportation projects and services

Despite record levels of federal investment and the undeniable will of local jurisdictions to tax themselves for the purposes of increasing the level and quality of public transportation services, State funding for public transportation has been grossly inadequate in recent years. As a result of this and other factors, we are currently experiencing widespread fare increases, service cuts, and layoffs in the transit industry. State Legislatures, facing huge deficits, have little choice but to freeze or cut funding for many important programs, including transit services.

ATU supports the creation of a new federal program that would provide incentives to encourage States to establish new sources of revenue for transit projects and services and to reward States for creating more flexibility in the use of their existing transportation funds.

The Flexibility Incentive Grant (FIG) Program is designed to encourage States to think twice before they cut transit funding by providing "bonus" federal transportation dollars to those States that increase public transportation funding or take steps to increase funding. Significantly, States could use funds derived under the FIG Program for any highway or transit projects eligible for assistance under Title 23 or Chapter 53 of Title 49.


FIG Program

Under the proposed FIG Program, the Secretary of Transportation would be authorized to allocate funds on an annual basis to States that increase transit expenditures by a certain percentage. In addition, States would be eligible for grants on the condition that they create new dedicated sources of revenue for public transportation. Such sources may include the dedication of new State motor fuels taxes, sales taxes, interest on existing highway funds, motor vehicle excise taxes, tolls, loans to be made out of highway funds, or other sources of funding.

Finally, in order to encourage flexibility in the spirit of 1991's Intermodal Surface Transportation Efficiency Act (ISTEA), under the FIG Program, the Secretary of Transportation would be authorized to award States for amending their existing statutes or constitutions to allow funds that are currently solely designated for highway purposes to be eligible for transit projects as well.

The FIG Program would not affect existing formulas under which States receive transportation funds through Title 23 or Chapter 53 of Title 49; it would be a "bonus" program to be awarded in addition to any funds received through those sources.

ATU believes the idea has a great deal of merit because it seeks to unlock billions of dollars in State resources, each year, for public transportation, community transportation, and ADA services. When combined with federal dollars, perhaps the U.S. could finally approach the more than $40 billion annual level that is needed for our nation’s transit systems.


Flexibility Incentive Grant Program News:

Cong. Matsui Introduces ATU-Drafted FIG Bill - March 26, 2007


Other ATU Federal Legislative Priorities: