Transportation Equity Act Offers Transit-Related Funds

The passage of the Transportation Equity Act for the 21st Century (TEA-21) in

1998 represents unprecedented opportunity for communities that are seeking to

build or expand their transit systems. This opportunity will be realized through

significantly increased overall spending on surface transportation, the

retention of the ability of communities to "flex" highway dollars for

transit projects, the creation of new programs and by program changes that allow

local communities to raise capital through the use of innovative financing. Most

importantly, Congress established "guaranteed" funding for surface

transportation projects, which ensures a minimum funding level each fiscal year

until TEA-21 expires on September 30, 2003.

TEA-21 authorized $217 billion in overall surface transportation spending,

which represents an increase of 40% over the funding authorized in the

Intermodal Surface Transportation Efficiency Act of 1991 (ISTEA). Included in

the $217 billion is a total of $36 billion of "guaranteed" monies and

$5 billion in "non-guaranteed" monies for transit. The reference to

"guaranteed" monies refers to actions taken by Congress to ensure that

gasoline tax revenues held in the Highway Trust Fund and the Mass Transit

Account would be spent on surface transportation projects, rather than be

allowed to accumulate for deficit-reduction purposes. As a result, while

Congress could provide less than the "guaranteed" levels in the annual

appropriations bill, this provides no help since these monies could be used for

no other purpose. To date, Congress has provided the "guaranteed"

funding levels in Fiscal Years 1998, 1999, 2000 and 2001.

TEA-21 retains the "flex" provisions of ISTEA, which permits local

communities to utilize monies directed by formula to the National Highway System

(NHS), the Surface Transportation Program (STP) and the Congestion Mitigation

and Air Quality program (CMAQ) for eligible transit purposes. The eligibility

for transit projects in each program varies, with CMAQ and STP program funds

proving to be the monies most readily flexed by communities since the programs

were first established in ISTEA.

A large portion of the STP and CMAQ program monies are directed specifically

to the local communities to be allocated by the Metropolitan Planning

Organization (MPO) through the short-and long-range Transportation Improvement

Program (TIP). The MPOs develop both three- year and 20-year plans that must be

amended at least once...

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