Mineta National Policy Summit, Commonwealth Club of California

6/20/2014

Deputy Administrator Therese McMillan
Federal Transit Administration

Audio of Mineta National Policy Summit

Remarks as Prepared for Delivery:

Intro: A Season of Decision

Thank you.

And thank you, Secretary Mineta.

What a privilege it is to be introduced by someone who’s served his community and his nation so well, for so long.

And what a privilege it is to not only be serving the American people, but to do so at a time when the demand for transit is on the rise.

Last year the transit industry had the highest ridership in generations and the seventh straight year delivering more than 10 Billion trips.

While we’re optimistic about the role transit will play in a growing nation, we are faced with real challenges.

At the Federal Transit Administration, we’re also part of a larger conversation about the entirety of America’s transportation network – and it, too, is at a crossroads.

The law that makes it possible for us to invest federal tax dollars in our nation’s transportation infrastructure expires this fall.
But even before that happens, a central part of the Highway Trust Fund is expected to run out of money.

The fund’s Highway Account is expected to go bust in August, when Congress is on vacation.

The Mass Transit account may dip below $1 Billion in October, at which point the FTA will have to begin delaying – and potentially reducing – reimbursements to our grantees.

So this is a season of decision.

The choices, in the main, are not complicated: either Congress will decide to act or it will decide to delay.

But the stakes are incredibly high.

The future of our transportation system hangs in the balance, as well as the sustained growth and quality of life of our communities.

All of this is on the table.

I think this is essential information to frame today’s discussion about how we finance our nation’s transportation systems.

It’s not a hypothetical conversation. It is real – as real as concrete that’s crumbling and steel that is bent.

It’s as real as the people who travel over and under and through that infrastructure every day.

When we talk about funding for our nation’s transportation systems, this is the context we should keep in mind. And we should be prepared to answer some fundamental questions:

Why We Invest

First, let’s talk about why we make substantial investments in transportation.

One reason is our economy. Transportation is its backbone; that’s indisputable.

Today, our manufacturing and energy sectors are on the rise, and that’ll require more investments in roads, rail, and ports.

Transit itself can be an economic catalyst.

In Dallas, they’ve gone from zero miles of light rail to the most miles of light rail in America, all in 30 years. That’s generated more than $7 billion in economic activity and tens of thousands of jobs in the last 10 years alone.

Even our internet economy relies on highways and planes to make next-day delivery possible.

U.S. Transportation Secretary Anthony Foxx recently met Scott Davis, the CEO of UPS, who told him that 5 minutes saved or lost in shipping packages can mean a difference of 100 Million dollars.

The reliability of our transportation systems will also make the difference for 100 Million people. That’s the number of new citizens we’re expected to add between now and 2050 – an increase of about 30%.
When you consider what it means to keep all of us moving both safely and efficiently, I think it’s absolutely essential that we focus on what it means for individuals…

… Individuals like a young woman named Jada, in Birmingham, Alabama.

She’s another person Secretary Foxx met on his remarkable bus trip through 8 states, but she brings a different perspective than the CEO of UPS.

She’s a high school senior who gets up pretty early to catch a city bus at 6 AM so that she can make it to school on time.

Without that bus, Jada wouldn’t get the kind of education her mother wants for her and has worked so hard to provide.

It also means Jada might not one day be able to contribute to the economy in a way that’s as beneficial to her and her community.

Or consider the people of Glenwood Springs, Colorado – a town of less than 10,000.

Some of the people living there travel over 80 miles round-trip every day to work in Aspen, and the new Bus Rapid Transit service that opened there last year cuts that commute in half, saving each of them hours every day.

Or imagine Leah Osborne’s students, who live in El Paso, Texas.

Leah teaches students who are developmentally disabled. She told me that a key life skill they learn is how to use public transit so they can be as independent as possible.

Each of these individuals is a “reason why”: why we make investments in transportation and why we work so hard to keep it safe and reliable.

What We Invest In

What we invest in is also an essential question.

For transit, we’re investing in safety, choices, connections, and neighborhoods.

Safety is pretty straightforward. It’s our first priority, throughout DOT, and nothing else we do would matter without it.

Fortunately, transit is already among the safest ways you can travel. Our goal is to keep it safe.

For decades, the Federal government did not have transit safety oversight.

The Obama Administration fought for that authority and now that we have it, we’re committed to working very closely with the transit industry to make it flexible enough to fit a diverse industry with agencies of wildly different sizes and configurations.

Our goal is to keep both transit riders and transit employees safe.

We’re also making investments that maximize choice by helping local communities put in place transit options that are right for them.

For instance, this year we’re recommending 26 local projects under our Capital Investment Grant Program – popularly known as New Starts / Small Starts.

They were chosen by communities in 16 states, and they include a full range of transit options, including:

It’s not enough, though, to just provide choices: we also have to invest in the connections that make transferring from one to another as seamless as possible.

Denver’s a great example of what I’m talking about.

We just celebrated the opening of the city’s refurbished Union Station. It now brings together Amtrak, cars, interstate buses, taxis and shuttles, bike and pedestrian access, along with the city’s transit options: bus, light rail, and, very soon, commuter rail.

In the far smaller town of Mansfield, Connecticut, the new Nash-Zimmer Center not only brings together various modes of transport, it also provides ready access to the town’s civic and commercial center.

And in Minneapolis, the new Target Field Station adds a unique public space to the mix, making it a true crossroads for that community.

A multimodal approach, then, not only makes it easier for the people who use these services, but also makes critical connections between people and communities.

While we’re talking about connections, we also need to ask what it is we’re connecting to.

That question speaks not only to the needs of the individual, but also the need of the community.

In Los Angeles, the Crenshaw/LAX light rail line and the Westside subway extension are both bringing new access to the city’s downtown and points in between, along with the jobs and services they offer.

 

In Orlando, the new SunRail commuter line is itself a destination, acting as the catalyst for a $250 Million public-private investment in the 176-acre Health Village at Florida Hospital.

By deliberately locating the facility near the SunRail station, and the SunRail station near the facility, they are enabling thousands of medical researchers, hospital employees, patients, and their families to take transit to work and to obtain medical care.

In communities like Charlotte, North Carolina, and Phoenix, Arizona, universities are major employers, and the needs of their students and employees drive transportation planning.

Charlotte is extending its successful light rail north to reach UNC Charlotte so that students and university employees have a better way to get to and from campus –so that residents have better access to all of the activities going on at the university, including a most important cultural event: 49ers football.

That’s the UNC Charlotte 49ers – sorry, San Francisco.

With transit, we also have the opportunity to invest in neighborhoods – those that are booming and those that, over time, have been left behind.

That allows us to direct growth in a way that creates sustainable neighborhoods within the footprint of existing infrastructure.

Just as the elevator in a highrise apartment can move you the equivalent of a city block in seconds, transit options like streetcars can redefine what we call “walkable.”

That’s true in Atlanta, where the city’s modern streetcar will connect major tourist attractions around Centennial Olympic Park with the historic sections of Auburn Avenue where Ebenezer Baptist Church and the King Center are located.

The very presence of the streetcar enhances the community so much that it’s brought a tremendous amount of capital investment into the neighborhoods surrounding the project.

Since it was announced in 2010, $370 Million in development has been completed along the corridor.

There are 26 projects still underway that are worth another $375 Million.

That includes a lot of mixed-income and affordable housing, including some that’s planned for students at Georgia State University’s urban campus.

I had the chance to eat at a restaurant there on Auburn Avenue that’s situated right where the streetcar will stop.

The owner, Matthew Nelson – a small business owner – told me he can’t wait for the city’s new streetcar to open because, having put up with the construction, he’s ready for “the sweet taste of success.”

El Paso is home to Fort Bliss, one of the biggest military bases in the country.

The neighborhoods near the base are expected to grow nearly 30% in the next 20 years.

When I was there last, I had the opportunity to attend a groundbreaking in one of the dustiest, most barren lots you’re likely to see.

Before it was an empty lot, though, it was a rundown and mostly vacant mall – a real eyesore in the community.

Now we’re helping build a regional transit center there that’s bringing new shopping, services, and a community park to the people who live there.

The families that are stationed at Fort Bliss are raising children, holding down jobs, and pursuing education, but somewhat isolated from everything El Paso has to offer.

Giving them better access to those opportunities is the least we can do for the service members and their families serving our country.

How We Pay For It

Now that you’re thinking about what transportation infrastructure means to the people and communities it’s there to serve, let’s move on to the reason we’re here today: “How do we pay for all of this?”

No matter how clear the benefits or how compelling the payoff, we still have to buy the land, plan the project, pour the concrete, lay the steel, and hire the men and women to get the work done.

This is not a new concern.

When French writer Alexis de Tocqueville was touring the young United States in the early days of the 19th century, he interviewed a man who told him – and I quote:

“It’s a great constitutional question whether Congress has the right to make anything but military roads. It’s the States that often undertake to open and keep up the roads traversing them. Most frequently, these roads are at the expense of the counties. In general our roads are in very bad repair.”

The irony is that today we know full well that funding our transportation systems must be a partnership among federal, state, and local governments – and yet our roads, railways, and transit systems still suffer.

The American Society of Civil Engineers graded our infrastructure systems last fall. Our bridges got a C+, roads and transit a D, and our levees a D-.

In transit systems nationally, we have an $86 Billion backlog in repairs and replacements.

Not unlike the 1830s when de Tocqueville was writing, today it’s state and local governments that are bearing the cost, taking on more than half the annual spending to preserve and grow the nation’s transit systems.

We’re hearing from across the country that states are preparing to take on even more of the burden, or else to cancel and delay projects altogether – because of the looming shortfall in the Highway Trust Fund that I spoke about earlier.

Let me assure you: uncertainty has the same effect on transportation planning that it has on Wall Street.

Some examples from around the country:

By the way, that includes states you might expect, like Maryland and Massachusetts, and ones you might not, like Wyoming and Virginia.

Truly there are no Republican or Democratic bridges, roads, or railways.

Here in California, of course, the legislature’s just voted to dedicate Cap & Trade funding to transit and sustainable communities, giving Washington, DC, one more example of what leadership looks like.

How much better off would we be if all of these local partners knew they could count on predictable, long-term funding from the federal government to expand on those commitments?

How much wider would their vision become?

One of the interesting findings for transit in the Mineta Transportation Institute’s national survey is that nearly two-thirds did not know that the federal government helps fund local transit at all.

To put that in perspective, FTA’s formula and discretionary grants programs often provide up to 80% of a project’s capital costs.

It’s understandable that people are more concerned with whether the bus is on time than who paid for it. But it can be hindrance in encouraging Congress to ensure that the Department of Transportation can pony up its share.

Today, our transportation investments are always a portfolio of different revenue and investment options; there’s never simply “one best choice.”

From FTA’s perspective, that can include formula funding, the Capital Investment Grants I mentioned earlier, any one of various discretionary programs, and DOT-wide programs like TIGER grants and TIFIA loans.

And increasingly, the list of solutions also includes private sector participation through Public-Private Partnerships, Joint Development, and other forms of Value Capture.

For instance, Denver’s Eagle P3 project is extending rail service to the airport. A group of private investors is taking on the up-front costs and the transit agency will pay them back over the course of 30 years, much like you’d use a mortgage to spread out the cost of buying a home.

As the demand on public funds increases, transit projects must be able to participate in at least some of the value they create, above and beyond increased property taxes.

The portfolio of potential funding sources will have to expand if we’re going to continue investing in these critical transportation projects.

GROW AMERICA & 3 Priorities

As you know, President Obama and Secretary Foxx have responded to the opportunities and the challenges that lie before us with a bold plan.

I want to talk about that plan now, but I also want to suggest that there are three priorities that you can use to evaluate that proposal or any other.

About two months ago, the Administration sent to Congress the GROW AMERICA Act.

It would provide $302 Billion for transportation over the next 4 years, including $72 Billion for transit.

That’s a 70% increase over current spending, enough to allow us to increase our core formula grant programs and both expand services and invest in a meaningful state of good repair program.

When I spoke earlier about how local communities need a significant commitment from the federal government, that’s the kind of investment I had in mind.

The GROW AMERICA Act would also close the gap in the Highway Trust Fund I spoke about – without adding to the deficit.

I also told you how our surface transportation law needs to be reauthorized for us to continue making investments in our critical infrastructure.

Any such bill that passes Congress and makes it to the President’s desk will be, by its very nature, a product of compromise and negotiation. That’s a given.

And while it may differ in its details from the Administration’s proposal, any bill worthy of support must address these three key priorities.

FIRST: it must help close our infrastructure deficit.

Those barely-passing grades we got from the American Society of Civil Engineers? The D’s and C’s?

We did NOT get those because Americans have forgotten how to build roads and bridges.

We got them because some of the roads and bridges we have built are old enough for Medicare and no closer to retirement.

Maybe it’s because we’re so good at building things that we think they’ll last forever – but they won’t.

Earlier this year, Secretary Foxx visited the Cumberland River in Nashville.

One of the bridges there has been shut down three times recently because concrete continues to crumble and fallen on the road below – the road where people are driving.

Last summer in Philadelphia, a key transit bridge was shutdown for several weeks because when it gets hot, the ties holding the rails down become warped and it’s not safe for trains to cross.
Instead they unloaded everyone at one end of the bridge and bused them to the next station. That lasted for weeks.

And they’re not alone. With an $86 Billion backlog in transit repairs and replacements, nearly every community is affected.

These deficiencies have a direct impact on transit riders; they undermine the resiliency of our transit systems; and they drain resources that could be better spent on strategic and timely replacement and expansion.

So the GROW AMERICA Act increases State of Good Repair grants by 154% to a total of $23 Billion over the next 4 years.

Combined with state and local funding, that would be a significant payment towards filling the very serious infrastructure deficit facing us.

It’s only by addressing that backlog aggressively that we can establish a solid foundation on which to meet the SECOND priority: keeping ahead of growing demand for transit and an expanding population.

I spoke earlier about the 100 Million people our nation may add by 2050.

For transit, the demographic makeup of the United States by that time also makes a difference.

In part, that’s because the number of seniors is expected to double.

Let’s be clear who we’re talking about: it’s Baby Boomers. You know we’re going to want to stay as mobile as possible and independent as long as we can, whether we’re living in an urban highrise or a small town.

Today’s seniors are already telegraphing the importance of transit as we age.

In April, the AARP released a survey on livability that asked older adults what amenities they most wanted close to home.

The #1 answer: a bus stop.

More important than a grocery store. More important than a pharmacy. That’s how important independence and mobility are for seniors.

At the other end of the spectrum are the Millennials, a generation of young adults that will be taking on a greater role in the workforce as Boomers retire.

They’re not only driving at lower rates than any generation since the 1950s, but many are also forgoing driver’s licenses altogether.

It’s no wonder, then, that two-thirds of Millennials in a Transportation for America survey said that high-quality transportation is among the top things they look for when deciding where to live.

75% want to live in a walkable urban area where they don’t need a car.

Now, I’m sensitive to the notion that we might be able to attribute the decline in driving rates to an economy that’s been struggling, especially when it comes to young adults.

But that connection may not be as solid as it first appears.

If it was, we’d expect to see some correlation between declining driving rates and rising unemployment and poverty.

But in fact, the US Public Interest Research Group found that, among the 100 most populous areas in the country, driving declined the MOST in cities that were LEAST affected by the economic downturn.

More anecdotally, Philadelphia just last weekend restarted overnight subway service, in large part because young adults asked for it. Having chosen to be car-free, they want to take transit after midnight as well.

All of this is to say that our record ridership is far from an anomaly: it’s a trend that’s likely to continue for the foreseeable future.

Smart communities are investing in transportation infrastructure today to stay ahead of congestion and pave the way – sometimes literally – for future growth.

The danger is that without long-term, predictable funding from the federal government, local leaders will lose the confidence that they can pursue a bigger vision and instead turn to less ambitious projects that fill immediate needs but that do not adequately prepare us for the challenges of growth.

So another way to grade any reauthorization legislation is to judge its commitment to keeping pace with a growing population.

We currently have 50 projects competing for our limited Capital Investment Grant program funds. Thirteen are under construction and 37 are in some earlier stage of development.

There’s also at least seven that are standing at the front door hoping to get in.

That’s why the GROW AMERICA Act would increase funding for Capital Investment Grants by 29% over the 2014 level.

That would total more than $10.7 Billion over the next 4 years.

It would also quadruple our investments in buses and bus facilities, giving a dramatic boost to the form of transportation that provides more than half of all transit trips nationwide.

Our THIRD priority is that a new transportation law must help build ladders of opportunity.

There are many reasons President Obama has been such an extraordinary supporter of transit:

Chief among those reasons, though, may be the fact that transit creates jobs and connects people to opportunity.

I think back to all those individuals who see transportation as their ladder of opportunity: Jada in Birmingham; the people of Glenwood Springs; Leah Osborne’s students in El Paso.

For them, as for many others, transportation is more than a ride: it’s a lifeline.

Our investments in transportation create ladders of opportunity as well for construction workers and the people employed in the transportation industry – often good, family-supporting jobs.

That’s why, in addition to expanding and supporting services that connect people to opportunity, the GROW AMERICA Act also invests in workforce development so that transit workers have the skills to succeed at their jobs and help keep transit moving.

These, then, are the three questions you can use to judge whether any reauthorization bill working its way through Congress meets muster:

For the GROW AMERICA Act, the answers are all a resounding “Yes!”

Close

When we talk about funding for our nation’s transportation systems, this is the context we should keep in mind.

Earlier I quoted from de Tocqueville’s writings on “Democracy in America,” and I did so for the same reason most people do: because he offers us timeless truths about the character of this great country from the point of view of an outsider, speaking across the centuries from the 1830s to today.

He had quite a few transportation-related mishaps during his journey, but he ultimately concluded the following – and I quote:

“Of all the countries of the world, America is the one where the movement of thought and human industry is the most continuous and swift.”

Even today, with the internet and the proliferation of small, portable devices that put the world at our fingertips, it’s still true that our thoughts and our industry move with us on rails and roads, on boats and buses, beneath our cities and over the seas.

In this season of decision, it’s up to us to keep that movement “continuous and swift.”

Thank you for inviting me to speak with you today.

###