The influx of cash from the Infrastructure Investment and Jobs Act is creating opportunities and challenges for state transit agencies which must find matching funds, navigate politic turmoil and compete against other municipal programs to keep improving their infrastructure.
A group of three state transit officials discussed those challenges at this week’s American Public Transportation Association Legislative Conference and High-Speed Rail Seminar in Washington, D.C. The group participated in a panel discussion moderated by Anna Lynn Smith, V.P. Strategy and Planning, AMTRAK. The massive legislation is creating good problems to have, participants said.
“When I first got to New Jersey Transit five years ago, we didn’t have a five-year capital plan,” said Kevin Corbett, president and CEO of NJ TRANSIT. “We have good capable people, and they said, ‘what’s the point, they’re never going to give us the money.’ We sort of came from a culture of poverty.”
The culture has changed but the influx of federal money must be matched by the states, which has them scrambling. “None of us were really ready with the IGA,” said Julie White, deputy secretary for multi-modal Transportation, North Carolina Department of Transportation. “We have tapped out everything in our Statewide Transportation Improvement Program to match. With this last grant, we have nothing left on the table to match.”
Old money already in the transit funding pipeline could limit capacity for raising new matching funds. “In California, we face the challenge of a mismatch of timing,” said Chad Edison, chief deputy secretary for rail and transit, California State Transportation Agency.
“Many of our local counties have raised tens of millions of dollars in local sales taxes to go into transit and rail projects. We’ve had the state put in $25 to $30 billion of ongoing funding but much of that’s already been committed to high-speed rail in the inner city and in transit.” Edison noted the state and local funds were raised and obligated with very limited match resources.
The transit chiefs are also trying to stay one step ahead of the politics which can hamstring specific projects. North Carolina is hoping to advance its S-Line rail project that will span two states by connecting Raleigh, North Carolina to Richmond, Virginia. The route is also designated as a high-speed rail corridor.
White said she is using a bipartisan solution to solve political problems before they start. “We named a mayor at the north end of the line and a mayor in the south, one Republican one Democrat, as chairs of the steering committee. We have educated them, and they are the most enthusiastic local champions we’ve ever had.”
The promise of Congressional oversight has also raised the stakes on funding and finishing major projects. “We’re getting billions of dollars, we have to show that we can use it wisely and that we can really deliver,” said Corbett. “There’s a lot of skepticism in Washington, with members of Congress saying, ‘we give you money and it’s just being wasted down a rat hole.'” The House Ways and Means Committee has already signaled a keen interest in battling anything the Biden Administration supports.
Obligating and spending IIJA funds correctly is an ongoing challenge for all modes of transport as an accounting discrepancy has landed a $3.5 billion speed bump in highway spending. The Federal Highway Administration is currently trying to untangle two accounting systems to free up money for road improvements.
Corbett also acknowledged that rail projects are battling against funding for improving bus lines, light rail, healthcare, and education, likening the process to a Hunger Games scenario. White outlined how North Carolina’s DOT includes separate silos for rail, public transit, bikes, and pedestrians. The threat of inflation gobbling up construction budgets are another ongoing concern.
The post-pandemic financial health of transit systems partially supported via a fare box is an area of concern and hope. “We just set records on our inner-city ridership train ridership in 2022, it was a record,” said White. “This year, we’re seeing as much as 13%, year over year, this is in our entire history.”
White is also keenly aware of the importance of timing and swiftness required to maximize the opportunities offered by the IIJA. “Rail is the only mode that has no formulaic funding,” she said. “You have to compete for every dollar you get. You better have a pipeline of projects ready. At some point, it will rain, and lo and behold, it has rained.”