APTA Legislative Conference - Washington, DC


03-07-08

REMARKS FOR
JAMES SIMPSON, ADMINISTRATOR
FEDERAL TRANSIT ADMINISTRATION

APTA LEGISLATIVE CONFERENCE
WASHINGTON, D.C.

MARCH 7, 2008

It’s often said there are two kinds of people in the world: those who see the glass as half full, and those who see it as half empty.

I think we’ve spent enough time together by now, so you know that I’m a “glass half-full” kind of guy.

I’ve always believed that adversity presents opportunity.

It’s become clear in recent months that the U.S. economy faces serious challenges that have sparked lively debates in Congress, state capitols, executive suites, and ordinary households around the country.

It all boils down to this:

The cost of practically everything we make and consume in America is going up – and it’s not clear how we’re going to keep paying the bills while continuing to invest in our future.

This challenge is especially clear in terms of our national transportation infrastructure. . .
 
The DOT calculates that we need roughly 22 billion dollars a year to improve the condition and performance of our nation’s existing transit systems through 2024. That level is 70 percent higher than all transit capital spending in 2004.

As you well know, our traditional funding source – the Highway Trust Fund – is projected to run a deficit of 3 billion dollars by 2009. . . and the mass transit portion of the account will have a negative balance by 2012.

Now, this is a moving target  . . .

The Administration has proposed a temporary fix – to transfer a repayable loan from the mass transit account to the highway
account. . .

The idea is to keep the highway account whole through 2009 – as our authorizing legislation expires. . .

This proposal has not been well received by everyone in the transit community, but bear in mind that approximately $1 billion a year has been flexed from highway funds to transit since 2001. . .

We’re all in this together. . .
 
In any case. . .  regardless of how this turns out. . .  I still think the glass is half full. . .  FTA is stronger and better positioned than ever to serve the nation’s transit needs.

I’m proud of the hard work our staff has done to get us there – and the confidence that Congress has placed in us, despite enormous fiscal pressures.

Let me share some of our accomplishments – where we’ve been and where we’re headed.

First, our funding picture. . .

FTA’s FY08 budget includes $9.5 billion for public transportation. That’s an all-time high – with increases provided for nearly every transit programs.

Although this funding level is slightly below the amount designated in SAFETEA-LU –considering that so many federal discretionary programs are undergoing cutbacks, I think we’ve fared well.

Our major transit capital investment program, New Starts, has also fared well. To provide some perspective: Since January 2001, the Bush Administration has signed 22 Full Funding Grant Agreements. That’s nearly $9 billion in federal grants – more than one-third the estimated total cost of these transit projects.

If all goes according to plan, we hope to sign at least two new FFGAs later this year  --  and perhaps more  -- committing more than $1 billion in federal funds.

On the administrative side, one notable recent accomplishment is that we’ve issued a final charter bus rule that helps to clarify and define the rules governing charter services.

We believe we reached a workable accommodation with this rule, giving public transit agencies and private charter services a fair shot at competing to serve people who really need their services.

This is a milestone – the first significant revision of this rule in 20 years.

We’re also beginning to implement several recommendations that grew out of FTA’s year-long oversight review program. Between 2001 and 2007, the number of FTA grantees increased by more than 20 percent. That’s good new for the transit industry – but it poses oversight challenges for us internally. So we’re taking steps to make oversight activities more streamlined and effective.

For example, we’re creating a team of Contracting Officers (COTRs) to act as front-line managers delivering oversight reviews and workshops to our regions and grantees. Expect to see improvements in our oversight process in the near future.

Looking ahead, our FY09 proposed budget seeks $10.1 billion – including a record-setting $1.62 billion for capital investment grants for our New Starts program. Our ’09 request seeks more funding for urban formula and rail modernization grants, and more for rural areas that currently lack transit options.

The budget also proposes $200 million in funding for 9 new Small Starts programs and 4 existing Small Starts projects in cities around the country. The Small Starts Program is so important to helping communities with smaller transit projects obtain the capital investments and attention they deserve. . . .

We pledge to get these communities the funds they need as quickly and efficiently as possible, with a minimum of red tape.

We’re also seeking more than $60 million altogether for our fuel cell and clean fuels bus programs. This investment reflects President
Bush’s “Twenty in Ten” plan to increase the fuel economy of transit buses.

Now let me talk a little about reauthorization. As you know, SAFETEA-LU is set to expire in FY09. . .

We’re already thinking hard about the kinds of policy options we’d like to see in a new reauthorization package.

It’s too soon to discuss any specifics, but one thing is clear: The new authorizing legislation needs to take into account our ability invest in a state of good repair for our transportation infrastructure.

That’s absolutely critical.

You know, everyone loves a ribbon-cutting. It’s fun to celebrate the grand opening of a new station or light rail line. . . 

But we can’t ignore the ongoing need to invest in the maintenance and repairs of our current systems  --  and that takes creative financing and reliable sources of revenue.

I’m optimistic that the DOT and FTA will work with Congress through the reauthorization process to find ways to address this key challenge.

We will of course keep you informed as to our progress on this  --  and we look forward to APTA’s input down the road. . .

Besides reauthorization  --  which will of course consume more time and attention over the next year  --  what else is on the horizon?

We’re launching a pilot study of public-private partnerships to learn how effective they are at allocating risk, accelerating project delivery, and improving reliability and performance.

State and local officials around the country are increasingly receptive to using public-private partnerships as a means of financing, designing, building, and operating transit systems over the long-term. We want to be sure we are encouraging best practices as these partnerships multiply.

We’re also looking to share best practices on transit-oriented development. We’ve teamed up with HUD to coordinate activities promoting affordable housing programs near transit. We’re encouraging local transit agencies to lease or sell federally financed land to private developers, as a way to spur economic development near transit hubs.

In addition, as you know, last December we awarded a $1.9 million grant to APTA to develop new procurement standards to help communities buy safer, more accessible buses and rail cars at a better price. . .

We’re looking forward to seeing the fruits of that investment pay off. This could save the industry hundreds of millions of dollars in the long-run.

In addition, I want to mention our efforts to combat the nation’s growing traffic congestion problem. We’ve got to look at this problem holistically. . .

It’s not about funding roads versus transit. . .

It’s not about investing in one mode at the expense of the other. . .

The fact is, in order to address congestion and ensure future investments in transit, we’ve got to be creative. . .

That’s why Secretary Peters and I will continue to invest in efforts that provide incentives to urban areas willing to explore congestion pricing or tolling plans on the nation’s busiest roadways. A portion of the revenue that’s generated will help ensure that transit systems remain healthy and effective over the long-term.

Finally, let me stress that none of our accomplishments would be possible without FTA’s truly dedicated workforce and their commitment to finding ways to do things better, faster, and with greater transparency. Last year, I told you about FTA’s continuous improvement initiative, and our application to compete for the Malcolm Baldrige National Quality Award. We have benefited so greatly from this process. 
 If your organization ever has an opportunity to take this on, do it.

Thanks to the Baldrige process, our employees are finding new ways to reduce waste and red tape, discover more effective ways to serve customers, and they report feeling valued and listened to by management.

The Baldrige journey is going to help us continue to make the case to Congress to invest in FTA  --  and help us carry out our mission to improve public transportation in the U.S. as efficiently as possible.

And now, speaking of quality achievements, it is my pleasure to introduce Bob Tuccillo, FTA’s Associate Administrator for Budget and Policy. Bob will announce the 2008 FTA Ridership Award winners. Ridership is a key indicator of transit industry health  -- and increasing ridership remains a key strategic goal for the FTA.

From the applicant pool this year we selected the 10 agencies with the highest ridership gains – meaning they achieved at least a 5 percent increase systemwide over the prior year. 

Please join me in congratulating the winning transit agencies for their outstanding achievements and for serving the public so effectively.

Thank you.