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Sufficient issues exist to suggest that changes to the existing Urbanized Area Formula Grants Program should be considered in 2002-2003 as part of the FY 2004 and beyond reauthorization cycle, when population data from the 2000 Census and the resulting urbanized area redefinitions will be available.
The Section 5307, 5310, and 5311 formula apportionments should continue to reflect transit needs. Unlike many other interjurisdictional assistance programs of the federal government, existing and potential mass transit needs are not distributed evenly across the states, but instead tend to be much more concentrated. Any movement toward allocating federal transit formula funds on a basis unrelated to need would run counter to the purpose of the program.
As currently constituted, the Section 5307 formula program as applied to small urbanized areas reflects potential need but does not explicitly reflect existing need. This is in contrast to large urbanized areas--where existing needs are captured by the use of service level factors in the formula, and nonurbanized areas--where states allocate their apportionments on a discretionary or formula basis that does take account of existing need. This latter fact runs counter to the argument that only large cities (which generally have higher transit service levels) should have service factors applied in determining their allocations. The end result of the existing formula structure is that small transit intensive cities, which have above-average existing needs relative to their size, receive less formula funding than they would if the formula included service level factors.
The 2000 Census of Population will have a significant impact on the formula apportionments in both the urbanized and nonurbanized formula grants programs. These changes, likely effective in FY 2002, will lead into the discussion and debate surrounding the reauthorization of the federal transit program following the expiration of TEA-21 in 2003. FTA does not support reopening the current authorization and addressing formula program issues before then.
Some possible changes to federal transit assistance programs have been raised and analyzed in this report. The Federal Transit Administration views these proposals as a starting point for discussions of how to maintain a federal transit assistance program that continues to reflect and meet the needs of our Nation's mass transit systems. We welcome comments on this study and look forward to a continuing dialogue with Congress, the public transit industry, and the general public.
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