InTransition Magazine
Article URL:
InTransition Magazine : Transportation Planning, Practice & Progress

Archive Edition

Archived editions: 

Tax Revenues a Good Start for New Starts Funding

By Karl Vilacoba

In 2004, Denver metro area voters approved a sales tax increase of 4 cents per every $10 to help support the $6.1 billion FasTracks initiative. Combined with public-private partnerships, local matches and other funding sources, the tax revenues formed a financial foundation that has kept the project an attractive candidate for the federal New Starts program. These federal funds will account for over $1.2 billion, or 20 percent, of the cost of building the system, according to the FasTracks 2008 Financial Plan.

“Projects are rated on the local commitment of funding. If a local source of funding is in place, like FasTracks [has], it’s a big plus,” Federal Transit Administration (FTA) Senior Public Affairs Officer Paul Griffo said.

But in the ultra-competitive world of seeking New Starts funding, even a very well-planned project is far from a “sure thing,” Griffo said. The discretionary New Starts program is the federal government’s primary financial resource for supporting locally planned, implemented and operated bus and rail capital investments. As of December, FTA officials were monitoring about 110 alternative analysis studies proposing new or expanded transit systems around the nation, according to Griffo.

If history is a guide, the vast majority have a slim chance of obtaining a full funding grant agreement (FFGA). During the 2007 calendar year, the FTA executed just four FFGAs—three for rail projects in Portland, Norfolk and Minneapolis, and a fourth for the long-planned Second Avenue subway line in New York City. From 1991, when the Intermodal Surface Transportation Efficiency Act (ISTEA) was enacted, through 2006, a total of 53 FFGAs were executed, or an average of less than four per year, according to FTA records.

When deciding whether or not a project deserves the financial commitment of New Starts, officials examine several criteria, categorized into these three broad areas:

• Project development and planning: Candidate projects must emerge from an alternatives analysis study (also known as a major investment study or multimodal corridor analysis). The FTA examines this list of projects and decides which may enter the preliminary engineering phase; of 100 proposals, perhaps 15 will make it that far. The FTA then decides which of those projects should advance to the final design phase, where they will continue to be evaluated for possible funding and construction.

• Project justification: Projects can increase their chances for backing if it’s shown they will produce mobility improvements, environmental benefits, operate efficiently and cost effectively. Land use policies conducive to transit-friendly development around the project will also help, along with other factors.

• Local financial commitment: Officials want to see that there is a reliable stream of funding in place from sources other than the federal government. The project must have a strong capital financing plan in place, and its sponsoring agency should show the ability to fund and maintain the entire system once built.

“When we’re committing taxpayer dollars to a project, the FTA needs to do its due diligence,” Griffo said.
Return to this Issue