The Benefits of Reliable Federal Funding for Public Transportation

This paper examines the benefits of guaranteed federal funding for public transit. It is recognized across the political spectrum that the U.S. transportation infrastructure is falling behind that of other countries. Policies remedying the lack of infrastructure financing would generate economic growth and increase productivity. Guaranteed annual financing provides benefits that non-guaranteed funding does not. These benefits include: 1) Encouragement of innovation. Companies invest in research and development when potential return compensates for risk, and increased federal funding lessens the risk; 2) Support for manufacturing. The transit industry spends $34 billion annually in the private sector, but with uncertain federal funding, orders for new vehicles and equipment have decreased, with some companies considering reductions in their workforce; 3) Project delivery becomes faster and cheaper. Guaranteed federal funding lowers borrowing costs and speeds up projects, but only when lenders expect the funding will be provided as scheduled. Lack of such confidence could cost transit agencies $350 million in extra borrowing costs over the next 2 decades; 4) Improvement in maintenance. Transit agencies use asset management to match capital needs with timely financing. If funding does not arrive on time, maintenance is postponed, and the condition of transit infrastructure deteriorates. To support the nation’s economic competitiveness, leaders in the Administration and in Congress must provide robust increases in transit funding, and ensure that they are provided on time and at promised levels.


  • English

Media Info

  • Media Type: Digital/other
  • Features: Figures; Maps; References; Tables;
  • Pagination: 36p

Subject/Index Terms

Filing Info

  • Accession Number: 01679417
  • Record Type: Publication
  • Files: TRIS
  • Created Date: Jul 24 2018 9:25AM