Federal Funding for Rail Transit Projects
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A large amount of funding for streetcar and light rail projects in the US has traditionally come from the federal government from a variety of existing programs. Many of these programs are administered by the Federal Transit Administration (FTA), which is an agency of the US Department of Transportation (USDOT) that is in charge of providing financial and technical assistance to local authorities on issues relating to transportation.
Recent ideological gridlock in Washington and a lack of consensus on the direction and value of these types of programs suggests that new grant programs will be scarce and that funding will, at best, remain at its present levels (Transportation for America 2012, 6; Morris 2012). Still, there has been a recent expansion of low interest federal loan programs geared towards building and maintaining transportation infrastructure. However, unlike grant programs, loans need to be repaid by the government entities that accept them over time.
The following is a list of key present and past federal programs that have provided funding for local streetcar and light rail projects in particular:
Recent ideological gridlock in Washington and a lack of consensus on the direction and value of these types of programs suggests that new grant programs will be scarce and that funding will, at best, remain at its present levels (Transportation for America 2012, 6; Morris 2012). Still, there has been a recent expansion of low interest federal loan programs geared towards building and maintaining transportation infrastructure. However, unlike grant programs, loans need to be repaid by the government entities that accept them over time.
The following is a list of key present and past federal programs that have provided funding for local streetcar and light rail projects in particular:
Present Federal Funding Programs
- Moving Ahead for Progress in the 21st Century Act (MAP-21): This is the federal government's main grant program for funding all sorts of transportation infrastructure; supporting everything from pedestrian and bike paths to interstate systems. It was signed into law on July 6, 2012 and is projected to disburse $105 billion over two years (USDOT 2013). The new MAP-21 bill is similar to SAFETEA-LU, but provides reforms with an eye towards curbing the national budget (Congressional Budget Office 2012). MAP-21 streamlines the environmental review process, but will also cut funding to bicycle and pedestrian geared projects (Snyder 2012).
- Transportation Investment Generating Economic Recovery (TIGER): TIGER was originally a part of 2009’s American Recovery and Reinvestment Act. This program was renewed to the tune of $600 million in early 2014 as part of the Consolidated Appropriations Act, the bill that funds much of the federal government (USDOT 2014). The program aims to fund projects that are multi-modal or multi-jurisdictional or otherwise are difficult to fund with other existing federal programs (USDOT 2014). Projects which apply for funding can be national, regional, or local in scope. Although the application process is faster than New Starts / Small Starts grants, the process is still very competitive and total funds disbursed for projects are lower than New Starts / Small Starts (Transportation for America 2012, 34). The City of Cincinnati was a recipient of a TIGER grant from an earlier round of funding for its streetcar projects, receiving $15.9 million (City of Cincinnati n.d.).
- Congestion Mitigation and Air Quality Improvement Program (CMAQ): A flexible program under MAP-21 which aims to assist states and cities with meeting the requirements of the Clean Air Act. The City of Cincinnati received $4 million via OKI from this grant source to build its streetcar (City of Cincinnati n.d.). Overall funding for the program is slated at $2.2 billion for 2014.
- New Starts / Small Starts Program: The New Starts Program is the FTA’s main grant program for funding large capital investments in transportation, including light rail and commuter rail projects (FTA n.d. 1). It now falls under the purview of the MAP-21 Program. The opportunity for funding from the program is substantial; still, local contributions need to be significant and the application process is highly competitive and can take years to complete (Transportation for America 2012, 33-34). Examples of projects which are currently receiving funding from New Starts include an extension of a line on Seattle’s light rail network, an extension of Portland’s light rail system, and Columbus' Northeast Corridor BRT Project (FTA n.d. 2).
- Transportation Infrastructure Finance and Innovation Act of 1998 (TIFIA): This program provides low interest credit (not grants) to eligible public and private entities to support surface transportation projects that have a regional or national significance (USDOT n.d.). So far, the program has extended $7.9 billion in credit to twenty-two different projects, with about 80% of funding going to highway projects (Transportation for America 2012, 29). The minimum project cost is set at $50 million dollars ($15 million for intelligent transportation system projects) and federal funding cannot exceed 33% of project costs (USDOT n.d.).
- Grant Anticipation Revenue Vehicle (GARVEE): This source of funding allows large municipalities (with 200,000 persons or more) to create bonds which are paid back via committing secured future annual grants that are provided from the FTA (Transportation for America 2012, 26). Essentially, this means that municipalities are drawing on future funding that is already theirs to potentially finance more expensive projects now (the grants in question are typically for maintaining infrastructure). This grant program is typically implemented through states or metropolitan planning organizations (MPOs) (Transportation for America 2012, 26).
- Railroad Rehabilitation and Improvement Financing (RRIF): Similar to TIFIA, this is a federal loan program, not a grant program. Although this program allows for application to local passenger rail, in practice most of the approved loans are for private freight companies (Federal Railroad Administration 2012).
Important Past Federal Funding Programs
- Urban Circulator Grant: This is the largest federal grant that the City of Cincinnati used to fund its streetcar, drawing just under $25 million for the project (City of Cincinnati n.d.). Grants were made available to bus and streetcar projects that increase circulation within the urban environment and promote livability, sustainability, economic development, and the presence of public-private partnerships (Simes 2010).
- Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU): Antecedent of the current Moving Ahead for Progress in the 21st Century Act. SAFETEA-LU was a $286 billion grant program established to improve and maintain transportation infrastructure in the US (Morris 2012). The program was somewhat marred in the press by its more conspicuous earmarks; for example, the infamous ‘bridge to nowhere’ in Alaska (Yereth 2008).