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Rail News: Passenger Rail

House rule change eliminates funding guarantees for public transit projects


These days, the talk of the transit industry centers around the approval of a new six-year surface transportation authorization bill that would fund public transit and highway projects. But once a bill is approved, transit agencies can no longer rest assured the money earmarked is theirs for the taking. Last week, the House approved a series of amendments to House Rules that would “make it easier for members of Congress to reduce the level of funding,” says American Public Transportation Association (APTA) Director of Government Relations Paul Dean.

Since the Transportation Equity Act for the 21st Century was approved in 1998, surface transportation legislation has included a “guarantee” that money included in the authorization bill is automatically appropriated at the annual levels specified in the legislation, says Dean. The rule change eliminates a “point of order,” meaning that an appropriations bill could be brought to the House floor with less money than approved in the authorization bill, he adds. And that has many transit industry officials concerned about future project funding.

“Let’s say the bill authorizes $10 billion for transit in FY2013. Before the rule was changed, we could count on that $10 billion to be there. Now, it’s much easier for appropriators or any member of Congress to come in and reduce that amount,” says Dean. “There’s a certain level of uncertainty now that whatever comes out of a long-term authorization bill might not be doled out. It takes the trust out of the trust fund.”

The rule change already is having a ripple effect: Since the rules package was approved, financial services organizations have downgraded stock ratings for transportation construction companies because the perceived lack of guaranteed funding might prevent agencies from launching longer-term projects, Dean says.

Although some Congressmen had questioned the funding guarantees in the past, APTA officials didn’t discover House members were considering the rule change until late December.

“One of the problems was that this shouldn’t be an issue debated in the context of a rules package. It really should get a full hearing from the full Congress in the context of an authorization bill,” says Dean. “Because the point of order only existed in the House, it didn’t require any Senate action to move forward.”

APTA will work to restore the funding guarantees during the authorization process, he says.

Angela Cotey