    [Senate Hearing 107-949]
    [From the U.S. Government Publishing Office]

                                                            S. Hrg. 107-949

                          TRANSIT IN THE 21ST CENTURY:
                            SUCCESSES AND CHALLENGES

    =======================================================================

                                    HEARING

                                   before the

                                  COMMITTEE ON
                       BANKING,HOUSING,AND URBAN AFFAIRS
                              UNITED STATES SENATE

                          ONE HUNDRED SEVENTH CONGRESS

                                 SECOND SESSION

                                       ON

        IMPLEMENTATION AND REAUTHORIZATION OF THE PUBLIC TRANSPORTATION
     PROVISIONS OF THE TRANSPORTATION EQUITY ACT FOR THE 21ST CENTURY (TEA-
       21) AS IT PERTAINS TO THE CONDITIONS AND PERFORMANCE OF AMERICA'S
       TRANSIT INFRASTRUCTURE, FOCUSING ON THE IMPORTANCE OF A NATIONAL,
    SEAMLESS TRANSPORTATION NETWORK THAT MEETS THE MOBILITY NEEDS OF MOVING
                        PEOPLE IN URBAN AND RURAL AREAS

                                   __________

                          MARCH 13 AND OCTOBER 8, 2002

                                   __________

      Printed for the use of the Committee on Banking, Housing, and Urban
                                    Affairs

    88-087              U.S. GOVERNMENT PRINTING OFFICE
                                WASHINGTON : 2003
    ____________________________________________________________________________
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                COMMITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS

                      PAUL S. SARBANES, Maryland, Chairman

    CHRISTOPHER J. DODD, Connecticut     PHIL GRAMM, Texas
    TIM JOHNSON, South Dakota            RICHARD C. SHELBY, Alabama
    JACK REED, Rhode Island              ROBERT F. BENNETT, Utah
    CHARLES E. SCHUMER, New York         WAYNE ALLARD, Colorado
    EVAN BAYH, Indiana                   MICHAEL B. ENZI, Wyoming
    ZELL MILLER, Georgia                 CHUCK HAGEL, Nebraska
    THOMAS R. CARPER, Delaware           RICK SANTORUM, Pennsylvania
    DEBBIE STABENOW, Michigan            JIM BUNNING, Kentucky
    JON S. CORZINE, New Jersey           MIKE CRAPO, Idaho
    DANIEL K. AKAKA, Hawaii              JOHN ENSIGN, Nevada

               Steven B. Harris, Staff Director and Chief Counsel

                 Wayne A. Abernathy, Republican Staff Director

                            Sarah A. Kline, Counsel

                   Jonathan Miller, Professional Staff Member

               Sherry E. Little, Republican Legislative Assistant

                      Mark Calabria, Republican Economist

       Joseph R. Kolinski, Chief Clerk and Computer Systems Administrator

                           George E. Whittle, Editor

                                      (ii)
                                C O N T E N T S

                                  ----------

                           WEDNESDAY, MARCH 13, 2002

                                                                       Page

    Opening statement of Chairman Sarbanes...........................     1

    Opening statements, comments, or prepared statements of:
        Senator Bennett..............................................     2
        Senator Reed.................................................     4
        Senator Allard...............................................     4
        Senator Stabenow.............................................     6
            Prepared statement.......................................    34
        Senator Bunning..............................................     6
        Senator Corzine..............................................     7
            Prepared statement.......................................    34
        Senator Crapo................................................     8
        Senator Miller...............................................     8
            Prepared statement.......................................    35
        Senator Dodd.................................................     8
            Prepared statement.......................................    36
        Senator Akaka................................................    10
        Senator Schumer..............................................    10
        Senator Gramm................................................    11
            Prepared statement.......................................    37
        Senator Enzi.................................................    37

                                   WITNESSES

    Norman Y. Mineta, Secretary, U.S. Department of Transportation...    13
        Prepared statement...........................................    38
        Response to written questions of:
            Senator Reed.............................................    67
            Senator Gramm............................................    69
    William W. Millar, President, American Public Transportation
      Association....................................................    25
        Prepared statement...........................................    42
        Response to written questions of Senator Reed................    71
    Dale J. Marsico, Executive Director, Community Transportation
      Association of America.........................................    26
        Prepared statement...........................................    47
        Response to written questions of Senator Reed................    72
    John Inglish, General Manager, Utah Transit Authority............    28
        Prepared statement...........................................    66

                                  ----------

                            TUESDAY, OCTOBER 8, 2002

                                                                       Page

    Opening statement of Chairman Sarbanes...........................    75

    Opening statements, comments, or prepared statements of:
        Senator Reed.................................................    77
        Senator Corzine..............................................    77
            Prepared statement.......................................   118
        Senator Carper...............................................   113

                                   WITNESSES

    Jennifer L. Dorn, Administrator, Federal Transit Administration,
      U.S. Department of Transportation..............................    78
        Prepared statement...........................................   118
        Response to written questions of:
            Senator Sarbanes.........................................   174
            Senator Reed.............................................   175
    Patrick L. McCrory, Mayor, Charlotte, North Carolina.............    89
        Prepared statement...........................................   131
    Eric Rodriguez, Director, Economic Mobility Initiative, National
      Council of La Raza.............................................    91
        Prepared statement...........................................   132
    Wendell Cox, Visiting Fellow, The Heritage Foundation and
      Principal,
      Wendell Cox Consultancy........................................    94
        Prepared statement...........................................   137
    Roy Kienitz, Secretary, Maryland Department of Planning..........    98
        Prepared statement...........................................   161
    David Winstead, Chairman, Transportation Coalition, Maryland
      Chamber of Commerce, on behalf of the U.S. Chamber of Commerce.   102
        Prepared statement...........................................   170

                  Additional Material Supplied for the Record

    Statement of the American Road and Transportation Builders
      Association, submitted October 8, 2002.........................   177
    Statement of the American Society of Civil Engineers, submitted
      October 8, 2002................................................   184
    TEA-21 Reauthorization Legislative Agenda submitted by the U.S.
      Conference of Mayors, dated September 2002.....................   191

                          TRANSIT IN THE 21ST CENTURY:
                            SUCCESSES AND CHALLENGES

                                  ----------

                           WEDNESDAY, MARCH 13, 2002

                                           U.S. Senate,
              Committee on Banking, Housing, and Urban Affairs,
                                                        Washington, DC.

        The Committee met at 10:15 a.m. in room SD-538 of the
    Dirksen Senate Office Building, Senator Paul S. Sarbanes
    (Chairman of the Committee) presiding.

             OPENING STATEMENT OF CHAIRMAN PAUL S. SARBANES

        Chairman Sarbanes. Let me call this hearing to order.
        This morning, the Committee on Banking, Housing, and Urban
    Affairs will begin consideration of the Federal transit
    program. This is in preparation for next year's reauthorization
    of the Transportation Equity Act for the 21st Century, known as
    TEA-21.
        We are planning for this to be the first in a series of
    hearings on this subject to be held by the Committee, and also
    by its Subcommittee on Housing and Transportation, and I look
    forward to working with Senator Reed, Chairman of the
    Subcommittee, and Senator Allard, the Ranking Member of that
    Subcommittee, and all of my colleagues on the Committee as we
    move forward with the reauthorization process.
        I am pleased to welcome our witnesses this morning. We are
    very interested in their outlook for the future. As a Member of
    this Committee, I have been closely involved in the last two
    reauthorization cycles when we passed the landmark Intermodal
    Surface Transportation Efficiency Act, ISTEA, and its
    successor, TEA-21.
        ISTEA in 1991 broke new ground for the surface
    transportation program. It placed an emphasis on a sensible
    balanced framework designed to embrace all modes of
    transportation. It was also designed to give communities great
    leeway in developing transportation solutions that would best
    meet their needs.
        TEA-21 built on this framework, but it went beyond and
    established budgetary guarantees that provide transit agencies
    with a reliable funding stream on which to make their
    decisions.
        These transit investments are paying off in increased
    ridership, economic development, community revitalization, and
    improved quality of life.
        According to recently released estimates, since 1995,
    ridership has increased by 23 percent, growing faster than the
    population, which has gone up 4\1/2\ percent, faster than
    highway use, at about 12 percent, and faster than domestic air
    travel, at 19 percent.
        Transit systems have brought economic returns to their
    communities, provided crucial links between home, jobs, school,
    and doctor's offices, for millions of people who may not have
    otherwise been able to participate.
        It also established an enviable record in responding to the
    September 11 attack. On that day itself, transit systems all
    over the country ran extra trains and buses in order to meet
    the pressing transportation needs.
        We are going to hear first from U.S. Department of
    Transportation Secretary Mineta. And we are very pleased, Mr.
    Secretary, that you are here with us. Then we will hear from a
    panel, which will include the head of the transit system in
    Salt Lake City, John Inglish, who will report to us on his
    agency's success in meeting the unique transportation
    challenges the Olympics posed for them.
        Success stories like that, though, bring new challenges.
    Obviously, there is tremendous demand for transit projects.
    Many existing systems are reaching their capacity as ridership
    has grown far beyond what the systems were originally designed
    to handle. So we may face a capacity crisis in the near future,
    and we need to provide assistance to communities as they
    develop their infrastructure investment.
        We are looking forward to this hearing, and others to
    follow, which Senators Reed and Allard will be developing as we
    move through this year.
        The existing authorization expires on September 30, 2003.
    And so, presumably, the actual reauthorization task will be
    before us in the first session of the next Congress. But this
    is a very large and important subject and we think we should
    get started on it early, so that everyone that is interested in
    it can begin to formulate their ideas.
        The last time we were able, in the end, to come forward
    with quite a broad consensus on what should be done. We would
    like to do the same thing this time, if it is possible.
        With that, I yield to Senator Bennett.

                 STATEMENT OF SENATOR ROBERT F. BENNETT

        Senator Bennett. Thank you, Mr. Chairman. I will say in
    advance that I have to go to a Subcommittee hearing in the
    Appropriations Committee, a Subcommittee of which I am the
    Ranking Member. So, I need to be there and I apologize in
    advance for the fact that I will have to leave after my opening
    statement.
        Mr. Secretary, at one point in my career, I was charged
    with helping the Secretary prepare his testimony for just such
    an event as this.
        [Laughter.]
        And remember the long nights in advance of that. So, I have
    gone through your testimony with more than the usual interest,
    to see how well they are still doing it in my old shop.
        [Laughter.]
        I appreciate the depth of your formal statement and the
    focus that you are putting on mass transit, and I appreciate
    your kind comments about the Olympics.
        Nothing begins de novo. Everything is a follow-on from
    whatever went before. The transportation problems at the
    Atlanta Olympics were quite significant. We in Utah learned a
    great deal from Atlanta. Indeed, we had some institutional
    memory carry-over from the Atlanta transit people who worked
    with us in Utah. And John Inglish will undoubtedly have more to
    say about that.
        But the institutional memory that your Department had that
    carried over into that situation was also very helpful. And I
    have to pay tribute to you and your predecessors in the Clinton
    Administration for the work that they did to see to it that we
    looked as good as we did in Salt Lake City. It is nice to take
    the credit for what happened in Salt Lake City, but we must
    acknowledge that there were many who went before.
        And Mr. Chairman, in that context, I have to acknowledge
    that, as I worked on this issue in the previous bill, that
    Senator D'Amato from New York was enormously helpful. You do
    not normally think of a New York Senator being that concerned
    about problems in transit in Utah, but he was, and it
    demonstrated the kind of attention to the future challenges
    that you demonstrate by holding this hearing early and getting
    started early.
        We think of transit as a local situation tied to a
    particular city. But as the Olympics demonstrated, there are
    always national implications that come out of transit. I
    remember somebody once asking, why should I as a Utahan care
    about transit in Washington, DC, as we were talking about the
    subway and the Metro here in Washington?
        The answer clearly is that decisions are made in Washington
    that affect everybody. If Washington is faced with gridlock,
    the rest of the country will feel it. And that could be true of
    mass transit at any of our port cities. If there is gridlock in
    that city and the work that affects interstate commerce coming
    out of that city is affected by that gridlock, why, we all feel
    it. This is an enormously important subject. DOT has
    demonstrated a continuing accumulation of institutional wisdom
    on the subject.
        I want you to know how grateful we in Utah are for our
    moment in the sun on this issue. But I should point out that it
    is not just Olympics-related. Your Department has recently
    given us a full funding grant agreement for an extension of the
    very successful light rail program in Utah to the University of
    Utah Medical Center. That has nothing whatever to do with the
    Olympics, but it is a demonstration of the determination you
    have to finish a system.
        Indeed, as the country grows, the systems never get
    finished. There is always a new growth area, a new challenge, a
    new place that needs to be served.
        Again, Mr. Chairman, thank you for holding the hearing this
    early, getting started this early. Thank you, Mr. Secretary,
    for all you have done. I will do my best to conclude my other
    business and get back in time to hear the other panel.
        Chairman Sarbanes. Thank you very much, Senator Bennett. I
    think it was a good hour for the Committee when we responded to
    that Salt Lake City challenge and working with the Department,
    we were able to move that forward.
        I am interested to hear about the extension now out to the
    Utah Medical Center, which actually, as I understand it, is the
    regional medical center for the Rocky Mountain States.
        Senator Bennett. That is correct. The University of Utah
    and its sister institution, primarily Children's Hospital,
    serves as many as five States. And the primary Children's
    Hospital, or Medical Center now, as it is officially called,
    when I grew up with it and when my mother was in charge of it,
    was called the Primary Children's Hospital. But it serves
    indigent children from I think five different States and is the
    only facility in the Intermountain West that provides some of
    those services. So transit to that area is important.
        Chairman Sarbanes. Senator Reed.

                     COMMENTS OF SENATOR JACK REED

        Senator Reed. Thank you very much, Mr. Chairman. I want to
    welcome Secretary Mineta. I had the privilege of serving with
    him in the House of Representatives. He is not only a splendid
    public official, but also a splendid gentleman. Thank you, and
    good to see you here, Norm.
        Thank you, Mr. Chairman, for holding this first in a series
    of hearings, which I am pleased to work with you and Senator
    Allard on, as we reauthorize TEA-21.
        TEA-21 has been a great success. It has, as the Chairman
    indicated, increased ridership across the Nation. It has
    allowed businesses to move employees to their businesses more
    effectively and efficiently. It has been a great success. But
    success has also generated more expectations in the next round
    of reauthorization.
        In my own home State of Rhode Island, TEA-21 has been
    instrumental in providing additional buses, better facilities,
    all the things that help our transit system work, and that are,
    in fact, indispensable to our transit system.
        Earlier this week, I had a chance to visit the MTA in New
    York City and look at a major system that is impressive not
    only for the volume of its passengers, but also for its ability
    to cope with the devastating attack of September 11.
        As we have all indicated, we have a continuing obligation
    to modernize our transit systems, to ensure that they provide
    efficient transportation for our economy and our citizens. The
    tremendous flexibility of TEA-21 and ISTEA has given us more
    opportunities and we have taken advantage of them.
        The other aspect that we address here is not just the
    reauthorization process, but also continually looking for
    additional resources to fund these programs.
        They work. They are efficient. They are productive. We all
    want to support them. We hope through this series of hearings
    we can find more creative ways to ensure that transit in the
    United States is properly supported.
        Thank you, Mr. Chairman.
        Chairman Sarbanes. Very good. Senator Allard.

                   STATEMENT OF SENATOR WAYNE ALLARD

        Senator Allard. Mr. Chairman, thank you very much for
    holding this hearing. I would like to also welcome Secretary
    Mineta, and I am looking forward to hearing his comments.
        I am pleased that the Banking Committee is beginning to lay
    the groundwork for TEA-21 reauthorization. I believe this
    hearing is an important first step.
        Although mass transit may be one of the least discussed of
    the Committee's issues, it is among the most important in my
    way of thinking.
        As cities grapple with growth and other matters,
    transportation is inextricably intertwined in the debate.
    Attempts to address affordable housing and land use or jobs are
    useless unless citizens also have a way to get from home to
    work or to recreational areas.
        TEA-21 has given Congress a framework in which to address
    America's transportation needs. As Congress begins to examine a
    new bill, we must consider the successes of TEA-21, which I
    believe are significant, as well as which areas should be
    improved.
        Within transit, one issue which will no doubt receive a
    great deal of attention is the required match. We have seen a
    rapid commitment of the money available under TEA-21.
    Therefore, we must examine whether the 20 percent match is too
    low. We must also reexamine the selection process. We should
    ensure that only the most worthy projects are funded.
        Another priority for me is increasing access to transit
    funding. Transportation has become a critical issue for many
    Western and Southern States due to years of incredibly rapid
    growth. In fact, my State of Colorado is currently the third
    most rapidly growing State in the Nation and the large
    population increase has moved transportation to the top of its
    list of priorities.
        As States struggle with transportation policy, many are
    examining ways to effectively utilize mass transit. Mass
    transit can help reduce traffic congestion and air pollution,
    as well as increase access to jobs.
        Unfortunately, some States are having difficulty obtaining
    a fair share of the funding necessary to create effective
    transit systems. There are a number of Federal transit funding
    programs. However, taken together, they direct the lion's share
    of funding to a small number of States and cities.
        This system fails to recognize the urban growth in this
    country is occurring in the West and South. If Federal programs
    are going to be effective, they need to shift with the times.
    The high-growth regions of the country are going to have the
    greatest justification for new mass transit dollars. This is
    why I sponsored an amendment to TEA-21 that would have required
    all additional funding for the Fixed Guideway Modernization
    Formula Program and the New Starts Program to be distributed
    entirely to new systems.
        While I was not completely successful, I was pleased that
    the final TEA-21 transit provisions made a first step toward
    providing greater equity for those areas of the Nation
    experiencing the greatest degree of population growth.
        As Ranking Member of the Housing and Transportation
    Subcommittee, I look forward to the opportunity to work with my
    colleagues on the Committee and the Administration to ensure
    that rapidly growing cities have their fair share of mass
    transit funding. Transit can play an important role in
    addressing the Nation's critical transportation needs.
        I would like to conclude by welcoming the witnesses to
    today's hearing and I am especially pleased to have you here,
    Secretary Mineta, to join us in this important discussion. Your
    views will be helpful as the Committee continues its
    reauthorization work. I look forward to your testimony.
        Thank you, Mr. Chairman.
        Chairman Sarbanes. Very good, Senator Allard.
        Senator Stabenow.

                  COMMENTS OF SENATOR DEBBIE STABENOW

        Senator Stabenow. Thank you, Mr. Chairman, for holding this
    hearing on our Nation's mass transit needs. I have a complete
    statement that reflects the needs of Michigan that I would like
    to include in the record.
        Chairman Sarbanes. It will certainly be included in the
    record.
        Senator Stabenow. Thank you.
        And I would like to also indicate that it is important that
    we are doing this hearing.
        While the fallout from the Enron situation is extremely
    urgent, we must also focus on other critical issues before the
    Committee. So, I want to thank the Chairman and I am looking
    forward to working with all of the Members of the Committee as
    we craft a strong mass transit title to the upcoming TEA-21
    reauthorization in the next year.
        I want to welcome the Secretary. It is wonderful to have
    you before the Committee. We certainly appreciate your
    leadership and commitment.
        Mr. Secretary, as you know, Michigan is known as the
    automobile State. We are very proud to drive and to sell
    wonderful automobiles. However, Michigan also has tremendous
    mass transit needs. In the year 2000 alone, Michigan buses
    carried over 91 million passengers. There are bus systems
    operating in every one of Michigan's 83 counties, from urban
    Wayne County to rural counties in the Upper Peninsula. So
    despite covering all counties, servicing many areas is minimal,
    creating a real hardship for working families who cannot afford
    to own a car.
        This is why I am so pleased to be here as we are beginning
    this important discussion. I look forward to working with you
    as we address the mass transit needs of Michigan and of our
    communities throughout the country.
        Chairman Sarbanes. Very good.
        Senator Bunning.

                    COMMENTS OF SENATOR JIM BUNNING

        Senator Bunning. Thank you, Mr. Chairman.
        I would like to thank you for holding this very important
    hearing and I would like to thank our witnesses for testifying
    today. I would especially like to thank my good friend,
    Secretary Mineta, for testifying today. I had the pleasure of
    serving with the Secretary in the House.
        It is good to see you, my good friend.
        We face in Kentucky many of the same challenges that the
    country faces as far mass transit is concerned. We have many
    rapidly growing areas in our State. But we also face the
    challenge of rural transportation.
        We are also a little unique because we are a State
    surrounded by rivers, with metropolitan areas on each side of
    the river. Many people live on one side of the river and work
    on the other. In other words, we have the problem of interstate
    transportation. It can be difficult getting a great number of
    people over the bridges when they all want to drive their own
    cars. I would urge you to take a look at our projects when they
    come before you. Any help you can give us would be appreciated.
        I look forward to the testimony of all of the witnesses and
    I thank all of you for coming before us today.
        Thank you.
        Chairman Sarbanes. Thank you, Senator Bunning.
        Senator Corzine.

                   COMMENTS OF SENATOR JON S. CORZINE

        Senator Corzine. Thank you, Mr. Chairman.
        I welcome Secretary Mineta. It is always great to be with a
    man of character and vision that he has shown with regard to
    these issues throughout his career.
        As a Member of both the Banking Committee and the
    Environment and Public Works Committee----
        Chairman Sarbanes. You may write this bill single-handedly
    before we are finished.
        [Laughter.]
        Senator Corzine. And active in both mass transit and
    highway needs, I look forward to being a part of that
    flexibility between the two modes. It is absolutely vital, I
    think, for our Nation's economy, for the health of our
    citizens. The environmental benefits that come from mass
    transit are untold and we have much to do here.
        As you know, Secretary Mineta and Mr. Chairman, New Jersey
    is the most densely populated State in the Nation, and while it
    is not growing at some of the rates of some other parts of the
    country, it is still a very rapidly growing State in numbers of
    people and mass transit is absolutely vital. We found that out
    post-September 11, more than almost any place, both by reverse
    commuting and the commuting patterns into Manhattan that are so
    self-evident from the interlinking of our region.
        The needs were great before. As a former 25 year commuter
    into New York City, I can promise you, neither the roads nor
    mass transit are convenient ways to get in and out of New York
    City. There is much to do.
        You all have been great in the past in supporting things
    like the Hudson-Bergen and the Newark-Elizabeth Light Rail. But
    we have other major projects that I know we need to speak
    about, and I have those outlined in my prepared statement, Mr.
    Chairman.
        But I look forward to working particularly to adding to a
    new tunnel under the Hudson River that will break down many of
    the roadblocks that we have as region. Not just the State of
    New Jersey, but as a region. I look forward to working with the
    Committee, my colleagues, and people in the Transportation
    Department about these subjects in the days and weeks ahead.
        Thank you.
        Chairman Sarbanes. Good.
        Senator Crapo.

                     COMMENTS OF SENATOR MIKE CRAPO

        Senator Crapo. Thank you very much, Mr. Chairman.
        I too welcome the opportunity to be with you here in this
    hearing and thank you for the attention. I welcome all of our
    witnesses here with us today.
        I did have the opportunity to serve in the House with our
    first witness, Secretary Mineta, and appreciate the chance to
    work with you now in your current position.
        Mr. Secretary, I think you are doing an outstanding job and
    I look forward to working with you as we continue to develop
    our transportation policies in this Nation.
        I also have the privilege of serving on both the Banking
    Committee and the Environment and Public Works Committee, so I
    will be involved in this matter at all levels, as far as the
    proper transportation issues in our Nation.
        I want to just associate my opening statement today with
    some of the comments made by Senator Allard with regard to the
    burgeoning needs for attention to mass transit in the west.
        Idaho is one of those States where we have a lot of roads.
    In fact, there are many places in Idaho where you cannot get
    there from here, and we do not want you to be able to get there
    from here. We do not want roads there.
        On the other hand, there are a lot of parts of Idaho that
    are running into the need for serious attention to mass
    transit. And the urban issues in Idaho are also becoming very
    critical, as well as the rural issues that Senator Bunning
    mentioned as well.
        I just wanted to thank you for being here and your
    attention to these issues and to remind everybody that we do
    need to look at these types of issues that traditionally, we
    have only associated with the East Coast and maybe some of the
    other more populated centers in the country, but which are now
    becoming very critical to places like Idaho and Colorado and
    other parts of the West.
        Thank you very much, Mr. Chairman.
        Chairman Sarbanes. Thank you.
        Senator Miller.

                    COMMENTS OF SENATOR ZELL MILLER

        Senator Miller. Thank you, Mr. Chairman.
        Mr. Secretary thank you for being here and the great job
    you do and have done.
        I have an opening statement that particularly relates to
    the situation in Georgia and I am going to ask that it be made
    a part of the record.
        Chairman Sarbanes. It will certainly be included in the
    record.
        Senator Dodd.

                STATEMENT OF SENATOR CHRISTOPHER J. DODD

        Senator Dodd. Thank you, Mr. Chairman.
        I would just share some thoughts on this and I welcome my
    friend and colleague. We arrived the same day in Congress 27
    years ago.
        Secretary Mineta. No, do not say it.
        [Laughter.]
        Senator Dodd. Norm Mineta and I did.
        [Laughter.]
        He looks like he did 27 years ago.
        Chairman Sarbanes. He tells stories on you, Mr. Secretary.
        Senator Dodd. I can tell stories on him.
        Chairman Sarbanes. You can tell stories on him, yes.
        [Laughter.]
        Senator Dodd. This is a mutually shared destruction here.
        [Laughter.]
        We will leave it at that.
        Secretary Mineta. That is right.
        Senator Dodd. The cold war may be over, but----
        [Laughter.]
        But Norm is doing a great job. He did a great job in the
    House. And as our colleagues who served with Norm already
    pointed out, working with him on these issues, and your
    knowledge of these issues, of course, as a result of your work
    on the Commerce Committee over the years there, just brings a
    wealth of information to this issue.
        We have some wonderful witnesses who will be appearing, so
    I too want to thank you, Mr. Chairman. I think what Senator
    Stabenow said here, we all know these other issues that are out
    there that are compelling and commanding of a lot of attention.
        But I will tell you that, probably all of us met with our
    mayors who were down here recently. Every January I go around
    my State and meet with my local officials and mayors just to
    get a sense of what they think the important issues are when we
    get to consider the budget process.
        I will tell you, Mr. Chairman, this was the dominant issue
    of yesterday's discussion. And it wasn't just my mayors in West
    Port, Connecticut, or talking with Dan Milloy from Stanford or
    in Bridgeport, where those of you who follow or travel between
    New York and Boston are very familiar with what Route 95 can
    look like. It looks like a parking lot. It is a huge issue to
    people in my State, all over, even smaller communities.
        So while Enron and related matters may be grabbing the
    headlines, when you start talking to local people and municipal
    leaders, transportation issues are what they want to talk
    about.
        I found it tremendously heartening to listen to my
    colleagues here from Colorado, Kentucky, and Idaho, sharing
    exactly the same point. I think we have the makings here of a
    policy that can really be helpful to everyone.
        We too often in the past have been in competition as to
    whether or not it is highways or mass transit. If you are in
    Kentucky in a small town and you have a transportation system
    other than a highway, it is a transit system. And we talk about
    transit systems now to address their needs.
        But I think it is very important that we build on the idea,
    as Senator Crapo said, that these issues now transcend East and
    West Coast, and large urban areas where we have historically
    talked about them.
        Denver has legitimate issues, as Boise does, as does a
    smaller town in Kentucky or what I suffer and go through on
    Route 95 along the shoreline of Connecticut that many of my
    colleagues are familiar with.
        So this is an extremely important issue. And as we look at
    ways to have complementary systems, and as Senator Corzine
    pointed out very appropriately, in what we learned on September
    11, and the immediate events thereafter, as airlines became a
    problem immediately, people flocked to Amtrak, to intermodal
    systems and so forth. We realized the importance of how all of
    these systems can compliment each other, not as competitors,
    but as complementary systems.
        And our job as policymakers is not to sit here and
    necessarily be arguing and fighting with each other over scarce
    dollars, but how do we work in a way to see to it that that
    person who lives in Lexington, Kentucky, or Boise, Idaho, or
    some small town in Colorado, has the same opportunities that a
    constituent of mine does in Stanford, Connecticut, or a small
    town in my State, or in the New York area, as Senator Corzine
    has pointed out.
        So this is extremely important. There are a lot of matters
    that will get our attention. But I can tell you that this piece
    of the Banking Committee's jurisdiction on these issues is
    extremely important and I welcome the opportunity to have our
    witnesses and to listen to their ideas and submit some prepared
    remarks, Mr. Chairman, to you.
        Chairman Sarbanes. The remarks will be included in the
    record.
        We have been joined by Senator Akaka. Did you have any
    comments?

                  COMMENTS OF SENATOR DANIEL K. AKAKA

        Senator Akaka. Yes. Mr. Chairman, I want to welcome our
    witnesses. It is especially good to see my dear friend and my
    buddy, Norm Mineta, and former colleague from the House. It is
    good to have you here this morning.
        Norm, you have faced an extremely challenging job in the
    aftermath of the September 11 terrorist attacks. I want to
    thank you for all of your leadership, which has been
    tremendous, and your hard work to improve aviation security and
    restore public confidence in air travel.
        As you know, I travel a lot by air and I know what I am
    talking about when I say that there has been improvement in
    aviation security. You have done an outstanding job. The public
    is once again taking to the skies because of that.
        Mr. Chairman, I appreciate your holding this hearing on
    Federal transit programs. It is imperative that we begin to
    address the
    reauthorization of the Transportation Equity Act for the 21st
    Century. We have many issues to consider. Among them, the
    demand for transportation of all kinds, balancing environmental
    protection, and the availability of funding for these
    priorities.
        Again, Mr. Chairman, I thank you very much for having this
    hearing and welcome again, Mr. Secretary.
        Chairman Sarbanes. Thank you.
        Senator Schumer.

                 COMMENTS OF SENATOR CHARLES E. SCHUMER

        Senator Schumer. Thank you, Mr. Chairman.
        I know this is the first of a long process and I welcome
    participating. I want to thank our Secretary. We served
    together in the House for many years and are good friends. And
    I have to thank you publicly, Mr. Secretary, for your help
    since September 11. You and your agency have been stalwart in
    our hour of need and I thank you for that.
        I would just like to make three quick points. First, the
    transit part of the ISTEA and TEA-21 bills have been a huge
    success. Over the past 6 years, transit ridership has grown by
    23 percent. The population has grown by only 4.5 percent. And I
    believe that ISTEA and TEA-21 are making that huge difference.
    I think we should not screw it up now. We are on the road to
    really helping things out.
        Second, I would say the needs across the United States are
    great. I heard my friend from Connecticut, Senator Dodd,
    mention that, and Senator Corzine. Mass transit is very
    important in smaller towns and cities and in Upstate New York
    as it is in New York City. Of course, in our large cities it
    has huge needs. And just as our friends from rural areas talk
    to us about agriculture and conservation, we have to talk to
    you about mass transit. It is a particular need in urban areas
    where we need help.
        Third, and finally, I have great respect for our former
    colleague, Senator Moynihan, who was so active in this area, as
    well as so many others, I think that we should try to have a
    benchmark, a goal. I think we should make an aggressive case,
    Mr. Chairman for doubling the Federal investment in mass
    transit in this proposal. It works, it helps, and I will be
    making the argument that we should do just that.
        So, I thank you, Mr. Secretary, and you, Mr. Chairman, for
    beginning this hearing in a very timely fashion and look
    forward to working with all of the Members of the Committee and
    the Senate, as we move forward on ISTEA and TEA-21.
        Chairman Sarbanes. Good.
        Senator Gramm.

                    STATEMENT OF SENATOR PHIL GRAMM

        Senator Gramm. Well, Mr. Chairman, thank you very much. I
    am sorry. I was over talking about terrorism insurance in a
    long and sad meeting. So, I could not get over here.
        Norm, we are glad you are here.
        I want to raise an issue that I am concerned about, and
    that is this issue related to the contract to run the mass
    transit in Boston with Amtrak. I do not know how familiar you
    are with it, but let me just give you the short history on it.
    Until 2000, Amtrak had the contract. Then, there was a
    competitive bid as required by law. They were the high bidder.
    They were evaluated by the evaluation process as the least
    qualified bidder. The low bidder was $116 million below Amtrak.
    But what happened then was the broadest interpretation of
    Section 13(c) that had ever come forward.
        The new contractor was required to honor all the old work
    rules, and to hire all the same people or to pay them 7 years
    severance pay up front. As a result, the agreement was
    destroyed. To this day, the same contractor is doing the work
    that lost this competitive bid and was the high bidder and low-
    quality bidder.
        It all comes down to the interpretation of Section 13(c). I
    know these things are easy for somebody to sit up here and
    complain about and they are very hard to do something about.
    But the plain, honest truth is that we have let feather bedding
    in contracts that were really aimed not at promoting the well-
    being of people who ride the mass transit and depend on it,
    literally rob these systems and hold up everybody that uses
    these facilities.
        It is unfortunately true, and some people might view it as
    a mean statement, but the bottom line is that too often in
    America today we run mass transit for the benefit of the people
    who run mass transit--not the people who pay for it, and not
    the people who ride it, but the people who run it. I would like
    to ask you Secretary Mineta, to go back and look at this
    decision. I know we are in the process of looking at having a
    new bid, but if you are going to employ 13(c) so broadly that
    you have to pay everybody that works there for the rest of
    their natural life, then you are never going to be able to
    modernize this system.
        One of our biggest problems with Amtrak, which is a
    separate issue, other than that they are the contractor here,
    is we could make passenger rails work, in many cases, in
    specific parts of the country if we were not saddled with all
    of these old work rules, and all of these labor requirements
    that were written in another century, where railroads were vast
    monopolies that were supported by almost unlimited Government
    subsidies. So, I think that not only is this important because
    a lot of people live in Boston that are important to the
    economy, but also the principle is important.
        I want to urge you, Norm, to take a long, hard look at
    this. It is one thing to enforce the law as it is written, it
    is another thing to use the law to prevent the very things we
    all claim we are for. And the thing that I would assume almost
    every Member of Congress would say they are for is competition,
    competitive bidding. So if you would look at that, I would
    appreciate it.
        Thank you, Mr. Chairman.
        Chairman Sarbanes. I do not want to debate that issue, but
    let me just say, we did hold hearings in this Committee on that
    very subject. We had people at the witness table about it. It
    is a very complex issue. I do not think the equities are as
    completely one-sided as has just been set out.
        Senator Gramm. They are clear to me, but I know that they
    are not to everybody.
        [Laughter.]
        Chairman Sarbanes. Yes. You might look at the transcript of
    that hearing, Mr. Secretary, if you go back to look at it.
        We are pleased that our first witness this morning is the
    very able Secretary of Transportation, Norm Mineta. Secretary
    Mineta started his public career as a City Council Member in
    San Jose. He then became the Mayor. He was an early supporter
    of transit in the Silicon Valley.
        From 1975 to 1995, he served as a very distinguished Member
    of the House of Representatives, where he eventually chaired
    the House Public Works and Transportation Committee. Earlier in
    1989 to 1991, as Chairman of the Subcommittee on Surface
    Transportation, he was a key player in developing the ISTEA
    legislation.
        The Secretary then left the House of Representatives,
    became a Vice President at Lockheed Martin Corporation. He came
    back into Government service as Secretary of Commerce in the
    previous Administration. And President Bush, with a good
    display of judgment, nominated him to be the Secretary of
    Transportation in this Administration.
        As Members have indicated, all of us have had a very good
    working relationship with the Secretary. He now heads a
    Department with 100,000 employees, almost a $60 billion budget.
    So the Transportation Department is a big actor in the Federal
    system.
        Mr. Secretary, we are pleased to have you here. We would be
    happy to hear from you.

                     STATEMENT OF NORMAN Y. MINETA

              SECRETARY, U.S. DEPARTMENT OF TRANSPORTATION

        Secretary Mineta. Mr. Chairman and Members of the
    Committee, thank you very much for, first of all, your
    leadership in having this early start for the reauthorization
    of TEA-21, and for this opportunity to share some thoughts with
    you today about the public transportation provisions of the
    Transportation Equity Act for the 21st Century, now known as
    TEA-21.
        All of us at the Department of Transportation and
    throughout the Bush Administration look forward to working with
    the Members of Congress and the Members of this Committee in
    shaping proposals for the reauthorization of this important
    legislation.
        Today, America's transportation sector faces a period of
    not only extraordinary challenge, but also of extraordinary
    opportunity. As all of you are so very well aware, the horrific
    events of September 11, as well as the ongoing process of
    recovery and rebuilding, have reaffirmed the critical
    importance of our public transportation systems to the security
    of every American and also to our Nation's economic well-being.
        Shortly after September 11, the Federal Transit
    Administration, under the very capable leadership of
    Administrator Jennifer Dorn, launched a major security
    initiative, working with transit agencies across the country,
    to identify high-risk, high-consequence assets and to determine
    how best to mitigate those risks.
        This new security initiative, added to the overwhelming
    success of the transportation systems supporting the 2002
    Winter Olympics just this last month, moving record numbers of
    users to and from multiple venues over a 17 day period without
    a serious security incident.
        Mr. Chairman, your Committee wisely begins the
    reauthorization process by looking to the lessons of TEA-21.
        TEA-21 strengthened our transit systems in five distinct
    areas. First, stability, equity, and flexibility of funding.
    Second, safety. Third, mobility and system upgrading. Fourth,
    the application of innovative technologies. And fifth,
    improving the quality of life.
        This morning, I will touch very briefly on some of these
    points and I would like to ask unanimous consent, Mr. Chairman
    that my written testimony be made a part of the record.
        Chairman Sarbanes. Without objection, the full testimony
    will be included in the record.
        Secretary Mineta. TEA-21 revolutionized transportation
    funding and authorized record levels of investment for
    transportation. The minimum guarantees and the budgetary
    firewalls have created confidence among grantees regarding
    Federal funding, an extremely important aspect of program
    delivery for State and local officials.
        Just as importantly, the funding flexibility that Congress
    first incorporated in the Intermodal Surface Transportation
    Efficiency Act of 1991, ISTEA, and then continued in TEA-21,
    allows State and local decisionmakers to consider a variety of
    transportation choices to meet the unique needs of their local
    communities. Indeed, over $7.7 billion has been transferred
    from Title 23 programs to public transportation programs,
    providing critical resources to supplement the basic public
    transportation authorization levels.
        Now the dramatically increased funding levels of TEA-21
    have improved America's mobility by upgrading the condition of
    our public transportation systems, and as a direct result,
    public transportation, as has already been pointed out, has
    increased by over 21 percent since 1993, and has the fastest
    growth rate among all forms of surface transportation.
        In short, the programmatic and financial initiatives of
    ISTEA and TEA-21 provide a solid foundation upon which we can
    build reauthorization legislation. However, we have an
    opportunity, indeed, an obligation, to do even better. And so,
    as we move forward with reauthorization, I have asked our team
    at the Department of Transportation to adhere to certain core
    principles and values.
        First, we must continue to assure adequate and predictable
    funding for investment in our Nation's surface transportation
    system.
        Second, we must preserve funding flexibility to allow the
    broadest application of funds to the best transportation
    solutions as identified by our State and local partners.
        Third, we must build on the intermodal approaches of ISTEA
    and TEA-21.
        Fourth, we must expand and improve the programs of
    innovative financing in order to encourage private-sector
    investment in the transportation system and look for other
    inventive means to augment existing revenue streams.
        Fifth, we must emphasize the security of the Nation's
    surface transportation system, by providing the means and the
    mechanisms to perform risk assessment and analysis, incident
    identification, response, and, when necessary, evacuation.
        Sixth, we must continue to make major improvements in
    safety.
        Seventh, we must develop and deploy innovative technology,
    fostering ``intelligent everything'' in surface transportation.
        And finally, we must simplify Federal transportation
    programs, continuing efforts to streamline project approval and
    implementation and focusing on the management and the
    performance of the system as a whole, rather than on its
    ``inputs'' or component parts.
        Mr. Chairman, we at the Department of Transportation look
    forward to working with Members of this Committee, with both
    Houses of Congress, with State and local governments, with
    tribal governments, and with other stakeholders in shaping this
    very important surface transportation reauthorization
    legislation.
        This is a moment of great opportunity and we must not let
    it pass us by. I am confident that by working together, we can
    build on the lessons learned from ISTEA and TEA-21 to develop
    reauthorization legislation that will best serve the American
    people.
        Again, Mr. Chairman, thanks to you and to the Members of
    this Committee for this opportunity to share some thoughts with
    you and I look forward to the questions you will be directing
    to me.
        Chairman Sarbanes. Thank you very much, Mr. Secretary.
        What is your projected timeline for developing
    reauthorization legislation? Has the Department developed at
    least a preliminary timeline on that?
        Secretary Mineta. Yes, sir, we have. As I indicated, I have
    already put our team together, so that we will be during the
    course of the year not only doing it internally, but also
    reaching out to Members of the House and Senate, to
    stakeholders across the country, in order to be able to have
    legislation and submitting it to you by February 2003. We hope
    to do it in the early part of next year.
        Chairman Sarbanes. So, you anticipate that right at the
    beginning of the new Congress, we would be in a position to
    receive proposed legislation from the Administration.
        Secretary Mineta. That is what I am intending to do.
        Chairman Sarbanes. Yes. Very good. Now on the core
    principles, I want to ask this question. Will the Department
    stick to what I regard as a very important core principle, that
    the matching share on transit and highway programs should be
    the same?
        Of course, there is a lot of demand for highway programs.
    There is a lot of demand for transit programs. There is limited
    money. So people are saying, well, if you required a bigger
    match locally, and therefore, less Federal money, we could do
    more projects. Of course, that throws a burden on State and
    local people that they may not be able to carry.
        There have even been some Members of Congress who have been
    trying to insist on that, even though, in my view, the current
    law is very clear that it is an 80/20 percent arrangement. And
    I think that is the Department's perception of the existing
    law.
        There are two questions.
        One is, do we stay at 80/20? And one would have to argue in
    terms of Federal and State sharing of responsibility. The other
    question, though, is, in a sense, regardless of what the
    percentages are, do you keep them the same across the different
    modes of surface transportation so that local and State people
    trying to make their transportation decisions are not led to
    pick a particular mode of transportation because they get
    better funding.
        We work very hard to equalize that situation and I think it
    is a very important dynamic in this whole picture. I wonder if
    the Department has any view on that issue at this point.
        Secretary Mineta. Mr. Chairman, from my experience in local
    government, in ISTEA, that was one of the basic principles. You
    recall, highways used to be 90/10, transit was 75/25. The
    problem was this whole issue of local officials saying, how
    much do I get back with the least amount of money that I lay on
    the table? So it drifted to 90/10 rather than on the 75/25
    side.
        However, in ISTEA, one of the things that many of us pushed
    for was to make it 80/20, so that decisions were being made on
    what was the best transportation solution, rather than where do
    I get back the most money for the money I put on the table?
        As we look at the experience of both the highway program
    and the transit program through ISTEA, TEA-21, and when you
    look at all of the monies that are being invested by local,
    State, and Federal resources in the highway program, or you
    look at the resources being invested in the transit side from,
    again, local, State, or Federal resources, even though the law
    may say 80/20, it is in reality, in terms of historical
    experience now, closer to the 50/50 level.
        Now part of this is because of the fact that in terms of
    the arguments that have been put forth in the past about
    devolution, that what we are really trying to deal with is
    allow the maximum flexibility to the localities to determine
    what is the best solution for themselves. As long as we have
    this flexibility component in there, and given the nature of
    the more sophisticated transportation planning and the thought
    that goes into projects today, people are not looking at where
    the greatest returns are, but what will be the best solutions
    in terms of our transportation problems.
        So I think that, regardless of what the percentage is that
    we are experiencing in terms of, let us say, even the transit
    grants today, that local transit agencies will say, well, part
    one, we will do 100 percent locally; and then, part two, we
    want Federal participation; and part three, we want Federal
    participation. But when you take a look at parts one, two, and
    three, the overall in terms of our own experience has been
    drifting down well below 60/40, edging toward 50/50.
        Again, I think that because of the other part of the
    process, in terms of earmarking not only the project, but also
    the dollars, which reduces our discretionary ability to
    determine where those monies will go. So, we become mechanical
    functionaries in terms of what projects are funded and where
    the money goes because of the earmarking that we find in either
    authorizing or appropriating language.
        Chairman Sarbanes. It is one thing if the local people want
    to add on with a free judgment. It is quite a different thing
    if we break this linkage of the percentage amongst the
    different modes of surface transportation, so that the Federal
    Government, in effect, is putting a weight into the scale of
    the local decisionmaking.
        And frankly, one of the reasons you are getting these add-
    ons and the additional commitment out of the local level is
    because, at the Federal level, we have evened up the
    percentages between highways and transit. Whichever way they
    go, they are going to share it on the same basis. Then that
    turns them loose to make their own judgments in terms of what
    best suits their transportation needs. So it is very important
    that we not break that level playing field that we established
    with the ISTEA legislation and carried through in TEA-21.
        Secretary Mineta. I think the other part of it is just
    that, even though there has been a tremendous increase in
    amount of funding that is available for transit, the needs are
    getting much larger.
        Chairman Sarbanes. I want to ask you how much more you were
    going to expand the program, but that is another subject.
        Secretary Mineta. Those are the things that we are going to
    have to be determining within the Administration. We haven't
    decided yet in terms of the whole issue of what the criteria
    will be in terms of projects in the future.
        There are a number of issues that we still have to think
    about as we formulate the reauthorization legislation. But I
    think that the more important issue is that of flexibility, to
    make sure that we still are able to direct the monies where the
    localities want them to be.
        Chairman Sarbanes. Well, my time is expired.
        Senator Allard.
        Senator Allard. Thank you, Mr. Chairman.
        As I mentioned in my opening remarks, I want to ensure that
    rapidly growing areas such as Denver have greater access to
    Federal mass transit dollars. Do you have any suggestion as to
    how we can improve access for these cities?
        Secretary Mineta. The basic principle that we work on at
    the Department of Transportation is need. But, again, even in
    terms of need, I think there are certain core principles that
    we like to look at. Let me go over some of the various ways to
    address those needs.
        First is based on maintaining existing transportation
    systems. Second is by developing new transit systems in areas
    experiencing rapid growth. Third is in terms of these
    transportation needs of rural populations that are not
    currently served by transit systems.
        And that was one of the driving influences in our ISTEA
    legislation. We changed the name of UMTA--Urban Mass Transit
    Administration--to FTA, Federal Transit Administration, to
    level that playing field. There was a recognition that it was
    not just urban and center cities, but that transit was
    something that was more broadly defined in order to really deal
    with, again, a basic principle of the Department of
    Transportation and FTA, and that is need.
        Senator Allard. I would like to hear your comments on
    multi-
    modal projects. We are using a multimodal approach in the
    Denver area, with Colorado's T-REX project, combining highway
    reconstruction, light rail, buses, and pedestrian features to
    serve a variety of citizens.
        I would like to hear whether you think we should have more
    incentives to encourage communities to go with that multimodal
    approach, or is this something that we should leave to a case-
    by-case basis and see who can best work it out without
    incentives?
        Secretary Mineta. You know, given all of the process in
    terms of alternative analysis, the environmental impact
    reports, and the various requirements, I think it really brings
    to the surface a lot of these needs.
        The new project in Colorado, the I-25 project, where we are
    dealing with both highways and mass transit in one large
    package, is a good example. The U.S. Department of
    Transportation, through the Federal Highway Administration and
    the Federal
    Transit Administration, working with the Colorado Department of
    Transportation and the RTD in Denver, have come up with a very
    comprehensive and good package on the I-25 project. This is
    something that I look at as a model as to what communities
    should be doing. So, I commend CDOT and the RTD in terms of
    what they are doing on the I-25 project.
        Senator Allard. There has been some discussion, in many
    different areas, about homeland security. Are you looking at
    some liability issues as far as transit systems are concerned,
    as it pertains to homeland security? What needs to be done on
    some of the transit systems? Is there a need for renewed focus
    on transit security?
        Secretary Mineta. Absolutely. Right after September 11,
    working with Mr. Millar and the APTA people, I had a conference
    call with, I believe, something like 20 of our largest transit
    districts.
        At that time, right after September 11, we were focusing on
    subway systems. I believe it was mostly subway systems, because
    of the fear of biological weapons in subway systems.
        I had a very extensive conference call with the operators
    of subway systems to deal with this whole issue of security.
    But that has been expanded in terms of Administrator Dorn's
    looking at all of the security interests of transit.
        Senator Allard. I am particularly interested because we
    have heard from contractors building large buildings,
    specifically individuals that have responsibility in stadiums,
    for example, complaining that either the insurance is not
    available or that premiums are too high. Will you address that
    problem as it relates to mass transit systems?
        Secretary Mineta. Frankly, the liability insurance issue as
    it relates to terrorism on transit, has not received the kind
    of focus that has been on aviation. But I know that this is
    something that we are looking at as part of the discussion,
    although the focus right now is on aviation terrorism.
        The marketplace is limited by the issue of cost. We have
    found that in most instances, the marketplace is there, but the
    cost has gone from relatively small to a lot larger. And the
    impact on transit agencies, as well as with all modes of
    transportation, has been extremely large.
        Right now, frankly, our focus in on aviation, because of
    the aviation stabilization legislation that passed by the end
    of September 2001, in which there was a retroactive liability
    insurance piece. And so, we have extended that. Right now, it
    expires on March 20, and I am in the process of looking at this
    whole issue about extending it, as the airlines are right now
    trying to form their own insurance company called Equitime, to
    deal with their own liability
    insurance issues.
        So this is a very active discussion within the
    Administration right now in terms of terrorism liability
    insurance. But right now, the focus is more on aviation. But,
    as I said, we are taking a look at the whole terrorism
    insurance issue.
        Senator Allard. Thank you, Mr. Secretary, and thank you,
    Mr. Chairman.
        Chairman Sarbanes. Senator Akaka.
        Senator Akaka. Thank you, Mr. Chairman.
        Mr. Secretary, you have been talking about TEA-21 and about
    its reauthorization.
        My first question is very simple. What important changes
    should be considered for the reauthorization? We would like to
    look and examine what has been in place before with the idea of
    improving it and eliminating the parts that are not working as
    well. That is the reason for my question. What do you think are
    important changes that should be considered?
        Secretary Mineta. Well, as I indicated, there are 7 or 8
    broad principles that I have outlined in terms of our own DOT
    team looking at reauthorization.
        But just historically, recognizing all of our experience in
    this area of financing, as it relates to surface
    transportation, one that we are all going to have to wrestle
    with, again, I guess, as this whole issue comes up every time
    we go through reauthorization, and that is the issue of donor/
    donee stake.
        I know that becomes a real crunch in the legislative
    reauthorization process. That is something that all of us are
    collectively going to have to work at again.
        Senator Akaka. We frequently, especially coming from
    Hawaii, talk about projects that come through your Department
    and about the work that is done there.
        You mentioned that the Department wants to fully utilize
    innovative financing systems in order to encourage greater
    private investment in the transportation system. My question
    is, what is the Department considering to encourage more
    private investment in the transit system?
        Secretary Mineta. Again, I think we should be able to build
    on what was done in TEA-21, with TIFIA financing. There are
    many opportunities to broaden that, and to continue trying to
    invest, get private dollars invested, in transportation
    programs. And we have already seen good examples of utilization
    of TIFIA financing in various transportation programs.
        But I think what we have to do is to find other incentives
    to again get private sector dollars to join with the public
    sector dollars to be able to expand, because there may be
    limited opportunities in terms of increased funding levels.
        We think about how much money is going into the Highway
    Trust Fund, and of course on the Senate floor is the whole
    issue of CAFE. But as long as CAFE standards are going to go
    up, that means if we go from, say, 27 miles a gallon to 35,
    there is less money coming into the trust fund. Or with
    ethanol, dual-fueled
    vehicles, hybrid, and all these other things, we are not
    getting the gas tax revenues.
        So, as we look to the future, we really have to think of
    what other sources are there? Is there a willingness to raise
    the 18 cent gasoline tax? I doubt it.
        Given the 18 cents, what are we going to be doing, because
    projects are more costly, whether they be highway or transit.
    And so, we are just going to have to look for other means,
    other financial resources, to be coming in.
        You are probably finding more and more at the local level,
    doing things that were once unheard of. One of the things that
    I did in San Jose as Mayor was to institute a fee on
    construction of homes. That was to take care of sewer fees,
    transit, schools, and a number of things.
        At the time, it was $2,700 a home in San Jose. And we were
    building probably upward of 60,000 units a year. Those are
    single-family dwellings because of the growth of Silicon
    Valley. That growth has subsided. But I understand that single-
    family homes today in San Jose have fees approaching $30,000 a
    home. I think more and more localities are probably going to
    have to do things like that.
        It also adds to, I guess you might say, the smart growth in
    terms of many areas. It also depresses what kind of housing
    gets built, both from single-family to more dense housing. And
    that is when transit opportunities come in. That is why
    provisions like CMAQ, transportation enhancements, JARC, all of
    these flexible provisions that were innovative in ISTEA and
    TEA-21, where they have to be continued in our reauthorization
    legislation.
        Senator Akaka. My time has expired, Mr. Chairman. I want to
    thank the Secretary for his responses.
        Thank you.
        Secretary Mineta. I might also add, Mr. Chairman, that I
    think Alaska and Hawaii are unique because of the nature of
    their transportation systems.
        I remember struggling with Senator Akaka when he was a
    Member of the House on H3 and the battle we had on that one.
    But you were persistent, you were visionary, and you stuck to
    your guns. And now everyone has the advantage of H3. I think
    there are other opportunities like that for Hawaii in the
    future. So, I look forward to working with you, sir.
        Senator Akaka. Thank you. I do, too.
        Thank you, Chairman Sarbanes.
        Chairman Sarbanes. Things are looking bright for Hawaii
    here this morning.
        [Laughter.]
        Senator Bunning. They always have.
        [Laughter.]
        Chairman Sarbanes. Senator Bunning.
        Senator Bunning. Thank you.
        Mr. Secretary, this question has very little to do with
    transit, but I figured, now that we have you here, I will ask
    it.
        I would like to know why the Highway Trust Fund dollars in
    the States are going to be down so much in fiscal year 2003, so
    I can explain it to my Governor and the State General Assembly
    and
    everybody else who's screaming at me.
        Secretary Mineta. Mr. Chairman, next question.
        [Laughter.]
        Senator, this has probably been the biggest thing to hit us
    all. Of course, this is known as RABA--the Revenue Aligned
    Budget Authority. As we look at this whole issue, we were the
    beneficiaries collectively of an expanding economy. But also,
    there were provisions in RABA that had the look-forward
    provision in terms of how we estimate what would be coming in
    terms of the Highway Act, and also a provision dealing with
    looking back. And the optimism of looking forward combined with
    the reality of looking back, with the downturn in the economy,
    just created for us this year where we have had some, I
    believe, $8 billion of increased funding, all of a sudden be a
    negative figure and turned around.
        Now, I am working with OMB right now to try to come up with
    a program so that it doesn't impact as severely on States and
    localities as we are experiencing. And those discussions went
    late into last night.
        Senator Bunning. As you know, all the States are having the
    same huge problems with the reluctance to raise gasoline taxes.
        Secretary Mineta. Absolutely. The reality is that is not
    going to happen. And so, we are working to try to mitigate the
    impact of RABA, consistent with the principles of TEA-21.
        I hope to be able to come to Congress with a proposal in
    the very near future.
        Senator Bunning. You understand what will actually happen
    because you were the Ranking Chairman on the Transportation
    Committee over in the House.
        Secretary Mineta. Absolutely.
        Senator Bunning. What we will do is try to make it up in
    individual projects in our States. And what we do not get in
    allotment money or percentage money, we will try to put in a
    $40 million project for a bridge or whatever it might be.
        We, in Kentucky, have the Chairman of the Subcommittee on
    Transportation over in the House, and we have that huge
    shortfall, $108 million, I think it is, just for Kentucky, in
    Federal funds, we will try very hard to make that up in other
    ways.
        Secretary Mineta. That is why I am working very closely
    with OMB right now to try to come up with a program.
        Senator Bunning. We also have a great need in Kentucky, I
    have three major areas that are looking for light rail.
        Of course, when we talk with them about light rail and the
    implementation of light rail, I am wondering if a newer and
    better technology is not going to be available by the year
    2010, and we are wasting dollars on light rail, putting
    railroad tracks back into the streets in Louisville, Lexington,
    and Northern Kentucky, and across the river into Cincinnati.
        I wonder if the money for engineering, pre-engineering, and
    approval of that system would not be better held, or wouldn't
    be better spent for looking at a better technology than light
    rail. Is there going to be an advancement?
        Secretary Mineta. I am not sure in terms of advancement.
    But in terms of alternatives, there are a number of things that
    are being talked about, things like bus rapid transit, in terms
    of dedicated lanes, being able to----
        Senator Bunning. That is about where we are at in the
    Northern Kentucky area.
        Secretary Mineta. And I think probably, because of the cost
    differences, there are areas in which bus rapid transit is
    really a good solution. As the ridership increases, that might
    then convert to a light-rail system. But at least in terms of
    the initial steps, BRT may be the kind of flexibility as well
    as----
        Senator Bunning. The 50/50 cost-sharing puts a damper on
    some people looking at light rail, at least in the areas that
    we have discussed it.
        Thank you very much for coming.
        Secretary Mineta. Thank you very much, sir.
        Chairman Sarbanes. Senator Crapo.
        Senator Crapo. Thank you very much, Mr. Chairman.
        Mr. Secretary, I look forward to working with you on many
    of the aspects of the reauthorization of TEA-21.
        Today, in my questions, I am just going to hit a couple of
    quick issues. The first one is one where I just want to make
    you aware of some concerns that have been popping up in my
    State, and what I expect is happening across the country. And
    if you have any observations on it right now, I would like to
    hear them. If not, I would like to see if maybe you could get
    back to me on a more full answer. I am expecting that you may
    not have everything at your fingertips right now.
        But what I am running into is that when I go to the
    airports in Idaho and talk to the airport managers, I am
    getting a very consistent message from them that because of the
    security requirements that we in Congress and at the Federal
    level are imposing on them, that they are running into very
    significant increased costs. Whether it is the 300-foot parking
    rule that they have to deal with or whatever it may be. And
    that there is supposed to be Federal funding to help meet these
    mandates, but it is not flowing.
        The question I am getting is in many contexts. I know of
    two or three airports where I have been in, two of them I have
    actually set up my own meetings, and one airport where I ran
    into the airport manager in the airport. In every case, they
    are very concerned because if they do not get the Federal
    support for these changes, then it is the city in most cases
    that is going to have to come up with it through their property
    taxes or whatever.
        And it is my understanding that under the law and under the
    programs that we have in place, whether it be the new changes
    that we passed with our security measures following September
    11 or existing grant programs, that there is supposed to be
    Federal money involved to help to meet these mandates.
        I guess my question to you would be, with the new
    Transportation Security Administration, is that the source? Is
    that where we should look to try to find out what is happening,
    why the water is not getting to the end of the road? It is some
    of the existing grant programs or is there a mix of funding
    sources that the airports should be looking to? And how can we
    be sure that as we do what we need to in the airports to
    increase security, that we also do not just drop this on the
    doorstep of the city governments?
        Secretary Mineta. What we are looking to is, frankly, more
    flexibility in the use of the AIP funds. Airport Improvement
    Program monies have been used in the past in terms of increased
    capacity.
        Today, and probably for the next couple, 3 years, increased
    capacity in the aviation system in terms of runways, tarmacs,
    is really the priority. The higher priority right now is
    security.
        What we are going to be doing--in fact, I think we have
    already put out the rule on it--and that is that AIP funds will
    be able to be used for security purposes.
        With that kind of broadening of the use of AIP funds, we
    will be able to address security. On top of that, through the
    new Transportation Security Administration, we will be
    assuming, as a Federal responsibility, the security at all of
    the airports in terms of baggage screening and in terms of the
    passenger screening. But part of that also is including the
    assistance to localities.
        Now, by May 1, the National Guard will all be pulled out.
    And so, TSA will be working with all of the airports in terms
    of contracting with local and State police departments or law
    enforcement agencies to provide that security.
        Senator Crapo. Well, thank you, Mr. Secretary. I appreciate
    your attention to this and we will work closely with you to see
    if we cannot identify the specific sources of revenue that you
    have given us today and see if we can make that work
    effectively.
        One other quick question to you. And you and I have talked
    about this a lot, but I want to bring it up to you again. I was
    concerned last year that the Department made the wrong decision
    with regard to the long-distance slot coming out of Reagan
    Airport, taking it out to Seattle as opposed to Salt Lake City.
    I know that we are getting into some very specific regional
    issues here, but I felt that the effort to maximize the
    domestic hub network was much better served by having that slot
    go to Salt Lake City as opposed to Seattle.
        Frankly, we still face that need now in the west and
    perhaps, rather than get back into the arguments of why it did
    or did not go to Salt Lake, I just want to raise it with you
    again that we have an opportunity now with the reauthorization
    of AIR 21 to maybe address this issue again or in some other
    context. And I would hope that you would be able to support our
    efforts to try to get some additional cross-country flight
    slots put into place out of Reagan National Airport.
        I guess my question to you is simply, do you agree that we
    do need to expand some of that availability out of the Reagan
    Airport?
        Secretary Mineta. Well, since that was determined in AIR
    21, I would assume that is an issue that is going to have to be
    dealt with as we deal with reauthorization for AIR 21 in 2003.
        So, again, there are a number of cities like Salt Lake City
    that would be logical candidates for consideration. But I think
    that is something that should be considered under the
    reauthorization in AIR 21.
        Senator Crapo. All right. Thank you. I look forward to
    working with you on that because, like I say, we really need to
    maximize our network out west.
        Secretary Mineta. What we have right now is set in law by
    the present legislation and we do not have the flexibility to
    designate additional----
        Senator Crapo. We thought we had it written so that it
    would go to Salt Lake City. But maybe we will have to write it
    a little better next time.
        Thank you, Mr. Chairman.
        Chairman Sarbanes. Thank you, Senator Crapo.
        Mr. Secretary, thank you very much for coming this morning.
    As you leave, I just want to plant a couple of thoughts.
        First, I have a bill in for transit in the parks. I am
    moving off the central focus, but the national parks are now
    overwhelmed with visitors. The cars are in line for hours
    trying to get into the parks and everything. We are trying to
    develop this concept where they could go to some marshaling
    point outside of the parks and be brought in on transit. Some
    of the parks see that as their only way, in a sense, to
    survive. We hope the Department will take a look at that
    legislation and maybe we can work together on something in that
    regard.
        Secretary Mineta. Mr. Chairman, we are working with the
    National Park Service, the Bureau of Land Management, and some
    others outside of our own agency to deal with that because we
    have a study going on with regard to the transit needs in the
    national parks. Hopefully, we will be able to get that solution
    for you.
        Chairman Sarbanes. Very good. I wouldn't give up altogether
    on trying to get additional revenue source. The public,
    generally speaking, if you link it to transportation or to
    education, has been supportive of that. And it seems to me we
    just have to figure out how to expand the size of this
    transportation money if we are going to begin to deal with the
    challenges. But I know that is a very sensitive and complicated
    issue, so I just leave you with that thought.
        Thank you very much for coming today.
        Secretary Mineta. Otherwise, my voice would go up five
    octaves, Mr. Chairman.
        [Laughter.]
        Chairman Sarbanes. Yes, I understand.
        [Laughter.]
        Thank you very much.
        Secretary Mineta. Thank you very much, Mr. Chairman.
        Chairman Sarbanes. Will the next panel come forward please.
        Panel two consists of three representatives from the
    transit community. We have Bill Millar, President of the
    American Public Transportation Association. APTA is a nonprofit
    international association of over 1,400 public and private
    members, including transit systems, commuter rail operators,
    planning, design, construction and finance firms, product and
    service providers, State Departments of Transportation, and
    transit associations. It covers the whole range. And before
    becoming APTA President, Bill Millar was the General Manager of
    the Port Authority of Allegheny County in Pittsburgh.
        We have Dale Marsico, who is the Executive Director of the
    Community Transportation Association of America. CTAA was
    founded more than 30 years ago. It is a national professional
    membership association of 4,000 organizations and individuals.
    Prior to coming to CTAA, Mr. Marsico was the first
    Administrator for the Brasos Transit District in Eastern Texas.
        And then John Inglish, the General Manager of the Utah
    Transit Authority. Actually, they are one of the largest land
    mass transit districts in the country. They carry 120,000
    riders a day and cover six counties in Utah. They recently
    built these two light rail systems under budget and ahead of
    schedule, no small accomplishment. Mr. Inglish has worked at
    the UTA for over 25 years.
        Now, gentlemen, let me outline a problem for you and see
    how quickly we can move here.
        There is a vote scheduled for 11:50. It may drag on a bit.
    Then there is another vote scheduled thereafter. So if we could
    get your testimony in, say maybe 5 minutes each--I do not know
    whether you can do that. I might be able to draw the hearing to
    a close and then we won't have to keep everyone waiting around
    for quite some time before we vote.
        So if you could do that, maybe we could call you, get your
    testimony on the record and have time for a question or two,
    and then we could let you go. Instead of holding everyone quite
    far into the next hour.
        Bill, why don't we go with you first.

               STATEMENT OF WILLIAM W. MILLAR, PRESIDENT

               AMERICAN PUBLIC TRANSPORTATION ASSOCIATION

        Mr. Millar. Thank you very much, Mr. Chairman. With that in
    mind, I think I will take my already shortened statement and
    see if I cannot shorten it a little bit more. Which means,
    among other things, you will not get to hear me sing my trolley
    song that is in my main testimony. But we can discuss that a
    little bit later.
        Let me say again how pleased we are to be here and how
    pleased we are with your leadership. When I heard the opening
    statements literally go around the semicircle here, I am
    tempted to say that this Committee is already well on its way
    to understanding a lot of our needs. And I am very appreciative
    of that.
        We will look forward to working with you and all the
    Members of the Committee as you do your work and we try to help
    you put together the next reauthorization bill for public
    transportation.
        As has been stated by so many before me, public
    transportation right now is undergoing a renaissance. And I was
    pleased that several of the opening statements included the
    testimony about the growth of our industry. I certainly will
    not repeat those numbers, other than to say that we are on an
    upsurge and we are on an upsurge because public transportation
    supported by Federal dollars is a much better quality service
    than it used to be. It is much more available to many more
    people, and people will use what is convenient in their lives
    and what makes a difference in their lives.
        The TEA-21 legislation, truly a landmark, building on a
    landmark ISTEA and then TEA-21. Recently, the American
    Association of State Highway and Transportation Officials and
    APTA put together a progress report on how TEA-21 was improving
    transportation options for America. And as part of my
    testimony, I would like to include that report entitled,
    ``Money At Work,'' * in the record.
    ---------------------------------------------------------------------------
        * Held in Committee files.
    ---------------------------------------------------------------------------
        Chairman Sarbanes. It will be included in the record, as
    will your full statement.
        Mr. Millar. Thank you, sir. I appreciate that very much.
        Of course, it also has been referred to by others, 6 months
    ago, September 11, we learned a lot of things in this country.
    Before that, we knew public transportation was a very good way
    to move large numbers of people and small numbers of people to
    where they needed to be and work. But on that day in
    particular, we learned that it was very important for this
    country to have options to move people away from centers very
    quickly, indeed. In fact, in New York and Washington and around
    the country, as you referred, we saw how transit could respond
    to terrorism. I also bring you a report that we put together
    after September 11. We surveyed our members to find out exactly
    how they responded on that day, and I would like to enter this
    report in the record, ``America Under Threat--Transit Responds
    to Terrorism.'' *
    ---------------------------------------------------------------------------

    ---------------------------------------------------------------------------
        When Secretary Mineta made the courageous decision to bring
    down the planes safely throughout the country, that left many
    thousands of travelers stranded and public transit in those
    cities helped them get to where they wanted to go.
        Whenever there is an investment made in public transit,
    very clearly, it results in lots of benefits. The obvious
    benefits of service available to people to use. Less obvious
    are the benefits perhaps of the investment itself in the
    business cycle of our country.
        We just yesterday released a new report entitled, ``Public
    Transportation Means Business.'' * That is part of my testimony
    as well. In this report, we summarize not only some well-known
    facts like the multiplier effect, 6:1 return on investment for
    every $10 million of investment, you also get another $32
    million of private business revenue, 310 jobs, et cetera.
    ---------------------------------------------------------------------------
        * Held in Committee files.
    ---------------------------------------------------------------------------
        Also a point that I think this Committee will be very
    interested in. When New Jersey builds a rail system, for
    example, often, the construction is done by a company that is
    headquartered in Idaho. When Texas cities buy buses, it might
    be a bus company in Lamar, Colorado, that gets the contract. So
    while the Federal money would appear to be going one place, the
    impact of that money tends to go very far and wide.
        Let me conclude my statement, really, highlighting what I
    see as three important points here.
        First, the demand is great for investment. We recently
    added up results from existing studies--we will be doing
    further refinement of this--and discovered that already
    published reports show about a $42 billion-a-year investment.
        Second, our organization has recently adopted an initial
    set of reauthorization recommendations which I would commend to
    you. Basically, we believe that TEA-21 is working pretty well.
    We really have three priorities: one, grow the program; two,
    maintain the funding guarantees; and three, streamline the
    program delivery.
        My final point, and I guess the Hippocratic oath says,
    ``First, do no harm.'' We believe the program is working well.
    We think there is a need for more investment. We want to work
    with you to make changes and improvements where warranted, but,
    basically, we congratulate the Committee on an effort well
    done.
        Chairman Sarbanes. Thank you very much.
        Mr. Marsico.

                      STATEMENT OF DALE J. MARSICO

              EXECUTIVE DIRECTOR, COMMUNITY TRANSPORTATION

                         ASSOCIATION OF AMERICA

        Mr. Marsico. I do not know if I can compete with Bill's
    time on that. That was, I think, a record.
        Chairman Sarbanes. Try. Try very hard to do it.
        Mr. Marsico. We chose as part of our reauthorization
    package which we submitted to the Committee this picture of
    some American battleships before World War II. We chose that
    for a couple of reasons and it was before September 11. We
    chose it because at the time these ships were laid down,
    Congress did not have the money to do a lot of things, because
    of the Depression and because of other demands.
        When we think about TEA-21, I think it is very important
    that we need to remember that when you created this
    legislation, we heard that there wouldn't be enough money to do
    anything in terms of what we have been able to accomplish.
        So as you begin this process today, I would say we should
    go back and look at the record of what people told us that
    could not be done and weigh that in the work that must be done.
        Community transportation and public transportation is not
    just about miles, investments, and dollars. It is also about
    people. In our testimony, we did mention a few people who were
    directly impacted by what changes TEA-21 has brought America.
        I want to just mention a few of these, including a young
    mother who was forced under the Welfare Reform Act to go to
    work. She lived three miles from her job site. And before
    public transportation was extended to her community under TEA-
    21, she had to walk back and forth every day and could not
    maintain her job during the winter months.
        We have numerous stories of America's seniors who are
    isolated, living in communities with very little public
    transportation that were often forced out of their homes
    because they had no good public access. And TEA-21 has
    addressed that.
        We face a major crisis in the rural portions of our country
    as older people rely on more out-patient medical services,
    especially dialysis or homebound treatments, and they have no
    way of getting back and forth because many of the people who
    are left in rural communities are often older people. Thanks to
    the investments that are made in TEA-21, we have seen progress
    in that as well. But there are plenty of unmet needs that we
    need to look at.
        And what we have done in our reauthorization proposal is to
    say the work that has been done already was good work. We need
    to find new and innovative ways to expand the public
    transportation investment that exists in our country.
        We put forward some ideas in our plan about revenue, but we
    also borrowed from the work this Committee did last year on the
    new markets tax credits.
        The new markets tax credits are a roadmap for a potential
    way that we might address unmet capital needs in transit. And
    as those tax credits come online this year, it is important to
    note that there are many transportation investments that are
    eligible for financing. So, we think that we need to look
    beyond just the traditional investment of the gas tax and
    general revenue. We think we need to look elsewhere and we
    think that tax credits are also a very useful thing to look at.
        President Kennedy often used to say that the journey of a
    thousand miles begins with a single step. And in TEA-21, we
    have taken many steps since it was reauthorized after ISTEA.
        We think that the Committee needs to exercise the same bold
    vision that has brought us to where we are today, from a
    country that was once thought of as the backwater of transit
    and transit development in the world, to regaining our position
    of preeminence as the world's leader in mobility.
        So be assured that we want to work with you and our
    colleagues in all the times and all the roads that are ahead to
    improve on what has been done and to make America's mobility
    choices possible for all of the people in our country,
    regardless of where they live, regardless of their age, and
    regardless of their economic need.
        Thank you, Mr. Chairman.
        Chairman Sarbanes. Well, thank you very much, sir.
        Mr. Inglish.

                       STATEMENT OF JOHN INGLISH

                GENERAL MANAGER, UTAH TRANSIT AUTHORITY

        Mr. Inglish. Yes, I will go very quickly. Thank you for the
    opportunity to appear before the Committee, Mr. Chairman.
        While the Nation was watching the gold-medal athletes
    perform in the Olympics, there was a gold-medal activity going
    on behind the scenes. Our transit athletes were performing at
    the top of their game. I would like to play a brief video, 2 or
    3 minutes, for you that shows what was going on as we were
    watching the athletes.
        Chairman Sarbanes. We would be happy to see it.
        These are light rail cars from Dallas, Texas.
        [A videotape is shown.]
        Mr. Inglish. It was an exciting time for us. My only regret
    is that the rest of the transit industry actually could not be
    there to help us. They sent over a thousand bus operators from
    47 States in the Union, including Hawaii, and they were scared
    to death the entire time it was going to snow.
        [Laughter.]
        But it did not. It was just cold. The first games of the
    week at night, at load-out, it was below 10 degrees, typically.
        We had buses and trains. We had 24 States contributing
    buses. You saw on the video buses from Atlanta, from St. Louis,
    from Denver, from many of the States across the Nation. And
    finally, 29 light rail vehicles from Dallas, Texas, a great
    contribution to us.
        During the games, we on some Saturdays carried as many as
    144,000 people a day on our light rail system, and that is
    pretty close to the capacity of the adjacent I-15, the freeway
    system there. It was a tremendous asset to have that.
        In the interest of time, I will just point out that the
    five key factors for us was a great deal of planning went into
    this effort. We had a great communications system. We empowered
    our people to make decisions in the field. We had tremendous
    human resources from around the Nation. And finally, we
    received equipment that was in good shape and we took time to
    make sure in advance of the games that all of our operating
    equipment was in good shape.
        We are very thankful that we did not have any severe
    security problems. We had a great deal of support from the U.S.
    DOT and from the Federal Transit Administration in particular.
        We were the first system and underwent security review and
    audit before the games and the tabletop exercises that ensued
    from that allowed us to do some refining of our plan, which I
    think we were very well prepared for anything that might have
    happened.
        I will end my comments and I have a written statement.
        Chairman Sarbanes. Very interesting. I am struck by the
    figure in your statement of the public opinion survey, that 94
    percent said they had a good to excellent experience with
    respect to the transportation system. That is a very high
    figure.
        Let me ask a couple of questions of particular members of
    the panel. Has this transportation system been integrated well
    into the future of Salt Lake City? To what extent were
    investments made in a system in order to handle the Olympics,
    but will not be highly relevant after the Olympics?
        Mr. Inglish. Certainly, there were some investments that
    were made in transportation facilities, particularly parking
    lots in some areas that will probably not be used at this level
    again. There are a few of them. Some of those are 7,000 to
    10,000 car lots. But they were only done in gravel and were not
    a very high cost.
        On the other hand, we did receiving funding to expand
    particularly some of our tracks, park-and-ride lots, and
    actually paved them over. That was much needed. It was needed
    before the games and will continue to be needed as our current
    track systems are already at capacity. They have only been
    opened 2 years and our two lines are currently at capacity.
    Some feel that the extension----
        Chairman Sarbanes. You mean capacity without the Olympics?
        Mr. Inglish. They were at capacity before the Olympics. We
    were able to expand the capacity with the Dallas cars, and that
    allowed us to go to the 144,000 a day figure. But right now, we
    are very limited with our own equipment and are in the process
    of purchasing used light rail vehicles from San Jose,
    California, in order to expand our fleet. That is the fastest
    and cheapest way we know of to do it.
        Chairman Sarbanes. You could have told the Secretary. Maybe
    he knows it when he was here, as a former Mayor of San Jose.
        [Laughter.]
        Mr. Inglish. An important point I would like to make, it is
    relevant to your earlier comments, and that is that without an
    80/20 match, our north-south, our original line, would not have
    been built.
        As a relatively poor system, of the quarter-cent in sales
    tax at the time, we could not have done it without any other
    match. As it happened, that line so transformed our community
    that within a year, they doubled the sales tax to expand the
    public transit system and the program has continued to grow.
        Chairman Sarbanes. I understand that you had a special
    training program for personnel in preparation for the Olympics.
    Is that correct?
        Mr. Inglish. Yes. We had extensive training at all levels.
        Chairman Sarbanes. Can you tell us a little bit about that?
        Mr. Inglish. First of all, we had close to 200 volunteers
    who were nontransit professionals. We had another 200 of our
    own personnel who were transit professionals, but volunteered
    to perform for us during the Olympics.
        That required, as with any activity of this magnitude,
    communications was absolutely critical. So, we spent an
    extensive amount of time training our people in the proper
    communications procedures, and who to talk to in the event of a
    problem. Every person, including our over 1,000 bus operators,
    were supplied with a Nextel telephone/radio type system. A lot
    of training was in the area of what do I do if such and such
    happens?
        And of course, those things did happen and those people
    knew how to respond, how to get help immediately. I am talking
    about pavement breaking at one of the park-and-ride lots and
    different things happening. Extensive training in how to
    communicate with the public, extensive training in all of the
    transportation elements of the program, so that if someone got
    lost in the system, they could find anyone in a yellow jacket
    or a blue jacket and ask a question and they would be equipped
    to tell them or direct them to where to go and how to get back
    to their automobile ultimately. So it was an extensive training
    program that went on in advance.
        Chairman Sarbanes. I understand the vote has begun, even
    though the light system seems to be off. I would yield to
    Senator Bennett.
        Senator Bennett. Thank you, Mr. Chairman.
        I was just coming out of my previous hearing and caught the
    video on the television screen on the desk downstairs. So, I
    got to see it.
        Chairman Sarbanes. Did you see the fireworks behind the
    light rail cars?
        [Laughter.]
        Senator Bennett. Oh, absolutely.
        [Laughter.]
        Mr. Inglish. We lit the fire, believe me.
        [Laughter.]
        Senator Bennett. You have already answered a question that
    I would have about the 80/20 cost split. And that you could not
    have gone forward without the 80 percent. Now let us talk about
    the next change, which is I think interesting and would have
    some
    applications elsewhere.
        When the light rail system in Salt Lake was first
    conceived, it had the spine north-south system, which would
    come from South Valley to downtown Salt Lake. And then we
    talked about crossing the T. That is, going east-west, with one
    terminus at the airport and the other at the University of
    Utah. The experience with the light rail now says to the
    mayors--they are the people to which I respond--we do not want
    the next part of light rail to go to the
    airport. We want it to move farther south and go off to the
    west. Instead of a symmetrical T crossing, we have an L shape
    that goes up to the University of Utah. We now want another
    spine that goes out to West Valley.
        We would never have anticipated that as we were drawing up
    the original plans because the airport was the third most
    traveled-to destination point in the valley. Downtown was
    first. The University of Utah was second. And the airport was
    third.
        Now, by building it as we have done, we find the usage on
    north-south is so much heavier than we had anticipated, and the
    people in West Valley want to come in farther south and join it
    and then go downtown, and that the ridership would be so much
    higher with that, rather than going out to the airport, that
    virtually everyone who originally came to me and said, support
    crossing the T and going out to the airport, is now saying, put
    that off and go some place else.
        Now, I offer that, Mr. Inglish, and anyone else, as an
    example of the fact that we need to be flexible in terms of the
    decisions we make here. And what flexibility do you need out of
    the Federal Government as you come along in the pipeline and
    say, scratch that. This is what we want now. How do Federal
    regulators respond to that kind of a reaction?
        Mr. Inglish. At this point what has helped us in the
    circum-
    stance is the development of a regional transit plan. We did
    not have that before we had some lines.
        Now, we have a regional transit plan that shows the line to
    the airport, shows the other lines to the areas that you have
    described, as well as a few others. The flexibility is that we
    can now, as now we have that on the record, the Federal Transit
    Administration respects that and looks to us to implement the
    elements of the plan. And once all those elements are on the
    plan, we seem to have the flexibility to make those
    adjustments.
        Mr. Millar. If I might comment on that, I think your
    experience in Utah demonstrates just an excellent point.
        People have a lot of difficulty relating to something they
    have never had. And so, when that first light rail line gets
    built and they can discover how useful it is and what a modern
    technology it is, and while I certainly appreciate Senator
    Bunning's comments earlier about what other new technologies
    might be coming, modern light rail is not the same as the old-
    fashioned streetcar that some people think it is. It is a very
    modern technology that people find very attractive.
        With regard to the question about what can we do in the law
    and in the planning process to allow for other changes, I think
    a number of things. Overall, we need to streamline the planning
    process and the environmental process so that data we collect
    for one purpose is reusable in the second purpose and we do not
    have to collect the same data twice.
        That principle would also then apply that necessarily, if
    you are building a regional plan and it is simply a decision to
    go with a different segment first than second, that we not
    necessarily throw out all the work that has been done so far
    and then again start from scratch. So there are a number of
    things like that.
        The transit title, which is the jurisdiction of this
    Committee, does not necessarily have some of the--I will call
    them shortcuts, for lack of a better word, though I think my
    highway friends would probably disagree with that
    characterization. But it does not necessarily have the same
    provisions as the highway portion of the law does.
        One of the things we are looking at is where are some
    things that have worked well in the highway development portion
    that could be equally applied to the transit portion. We would
    be very happy to work with you on that issue. It is an
    important one.
        Senator Bennett. Thank you. If we were not pressed for
    time, I would comment further on that because at the same time
    that we were doing light rail in Salt Lake, we were completely
    changing the highway system.
        The normal pattern for doing the highways in the way we did
    would have been 9 years. And quite frankly, we changed the mix.
    I have been attacked in Sports Illustrated and elsewhere for
    the amount of pork that I brought Utah on I-15. I let it drop
    because I do not want to give it any more publicity than that.
    But the fact is, of the $1.6 billion spent on I-15, $1.4
    billion came directly from the State of Utah. It was an
    increase in the gas tax that paid the $1.4 billion and only
    $200 million came from the National Trust Fund. And of course,
    Utahans buy gasoline and pay into the National Trust Fund, too.
        So, I say to anybody, if you think a citizen of another
    State contributed to the building of I-15, he must have filled
    his gas tank while driving through Utah, at a Utah gas station.
    Utah paid for that 100 percent.
        Now, the thing is, we did it in 4\1/2\ years instead of 9,
    strictly on the basis of the flexibility. And you are raising
    that you want that kind of flexibility in light rail. Out of
    the Olympic experience, we had to have it done prior to the
    Olympics. And so, we changed the way things were done. We did
    it in 4\1/2\ years instead of the traditional 9 years and it
    came in ahead of schedule, and under budget. And that kind of
    flexibility applied to the light rail is something that I will
    be happy to pursue with you when we have more time.
        Chairman Sarbanes. Very good. Let me very quickly because
    we will have to adjourn to vote.
        First, I take it guaranteed funding is a very important
    aspect of all of this. Is that correct?
        Mr. Millar. Yes, sir.
        Chairman Sarbanes. Otherwise, you cannot plan
    intelligently.
        Mr. Millar. Right.
        Chairman Sarbanes. Second, parity in terms of the
    percentage between transit and highways, I would take it, is an
    important consideration. Is that right?
        Mr. Millar. Yes, sir, it is.
        Chairman Sarbanes. And finally, Mr. Inglish, the higher the
    percentage, the better. If we have it at 80/20, I do not know
    if we will be able to hold that or whether they are going to
    propose something less than that. Who knows? 70/30? Who knows
    what they will come in with? We will try to hold it up there,
    although we have this problem that we have to figure out how to
    expand the Federal pot in order to make this work.
        I feel very strongly that whatever the percentage is, that
    it should be the same for highways and transit. Otherwise, I
    think that transit will really be set back in this process.
        Finally, Mr. Marsico, I take it the demographic changes
    that are happening, the aging of the American population, make
    this transit issue an even sharper one and perhaps even more so
    in the more rural or less highly urban areas of the country.
    Would you agree with that?
        Mr. Marsico. Yes. Recently, there was a General Accounting
    Office study on States in the west with low populations that
    really talked about the implications of lacking public
    transportation and the impact on Medicare, because so many
    seniors and so many people in rural areas are often reduced to
    dialing 911, at a huge cost to Medicare reimbursement because
    there is no flexible public or community transportation system
    to serve them.
        And in our testimony, we talked about some efforts in
    Mitchell, South Dakota, where large numbers of seniors were
    able to come together on a small public transit investment and
    reduce the number of ambulance calls that they had, so that it
    actually reduced the cost to Medicare and also reduces the cost
    for in-patient care.
        One of the things that we do not get in the reporting
    systems that we have is the kind of things that public
    transportation does for that every day in the entitlement area.
        If we took a look back and found a way to find out what the
    public transportation impact was on Medicare, we would find
    that investing in public transportation was one of the best
    ways to control costs because people can stay home, they do not
    have to dial 911, and if they are in their own homes, we all
    know that they will cost us less than being in an institution.
        Chairman Sarbanes. Yes.
        Mr. Marsico. I think that this process that you begin, I
    hope that we can look at that.
        Chairman Sarbanes. Well, that is a very important point.
        Thank you all for your testimony.
        Mr. Marsico, you have some good information in here and we
    look forward to drawing on the Community Transportation
    Association as we move ahead.
        Bill Millar, as I read this, you have now begun a process
    within APTA to come forward to develop a consensus within the
    organization. These are the recommendations of----
        Mr. Millar. They were the recommendations of our
    reauthorization committee.
        Chairman Sarbanes. Right.
        Mr. Millar. But our board of directors has endorsed them.
        Chairman Sarbanes. Okay. So it is moving along.
        Mr. Millar. We will be refining it. We will be adding to
    it. But this is basic APTA policy now.
        Chairman Sarbanes. Alright. Well, we look forward to
    working closely with all of you.
        Mr. Inglish, again, congratulations on a terrific success.
        Mr. Inglish. Thank you.
        Chairman Sarbanes. The hearing stands adjourned.
        [Whereupon, at 12:16 p.m., the hearing was adjourned.]
        [Prepared statements and responses to written questions
    supplied for the record follow:]

                 PREPARED STATEMENT OF SENATOR DEBBIE STABENOW

        Mr. Chairman, thank you for holding this hearing on our Nation's
    mass transit needs. While the fallout from the Enron situation is
    extremely urgent, we must also focus on some of the other critical
    issues in the jurisdiction of this Committee. And I look forward to
    working with you, Mr. Chairman, and all the Members of this Committee,
    as we craft a strong mass transit title to the upcoming TEA-21
    reauthorization in the next year.
        Mr. Secretary, as you know, Michigan is known as an automobile
    State. We take pride in producing and driving our automobiles. However,
    Michigan also has tremendous mass transit needs. In the year 2000
    alone, Michigan buses carried over 91 million passengers. There are bus
    systems operating in every one of Michigan's 83 counties, from the
    urban Wayne County to rural counties in the Upper Peninsula. Despite
    covering all counties, service in many areas is minimal, creating a
    real hardship for working families who cannot afford to own a car.
        Like many other areas in the country, Southeastern Michigan is
    suffering from extraordinary congestion. This costs people time with
    their families and reduces our productivity. According to a recent
    study by Texas A&M University done in 1999, traffic congestion costs
    Detroit area drivers more than $2.8 billion annually or about $700 per
    person.
        When compared to other urban areas, drivers in the Detroit area
    experience greater traffic delays than drivers in New York, Chicago,
    and Philadelphia probably because all of these cities have major subway
    systems, which Detroit does not.
        Since Michigan must rely solely on buses for mass transit, our
    State needs capital investment simply to keep up existing service even
    though ridership is increasing.
        In 2002, Michigan received $28 million in bus discretionary funds
    for capital projects but our capital needs for buses, facilities, and
    equipment exceeded $100 million. Michigan will simply have to carryover
    this shortfall until next year when we probably will get much less than
    we need for that year. This means we will fall further and further
    behind in meeting our public transit needs.
        This shortfall exists despite the significant contribution by
    Michigan taxpayers. Michigan ranks sixth, behind five States with rail,
    in direct support for its public transit systems.
        This is why I am pleased to be here today to kick off our work on
    improving our mass transit programs. I look forward to working with my
    colleagues on this Committee to help States like Michigan, increase
    access to public transportation, which will improve our economy and our
    quality of life.
        Thank you.

                                   ----------

                  PREPARED STATEMENT OF SENATOR JON S. CORZINE

        Thank you, Mr. Chairman, for holding this first in a series of
    hearings on reauthorization of the Transportation Equity Act for the
    21st Century--TEA-21, and I would like to join you in welcoming
    Secretary Mineta and our witnesses. As a Member of the Banking
    Committee, as well as the Environment and Public Works Committee, I
    look forward to being an active participant in drafting a bill that
    helps fund our mass transit and highway needs.
        Mr. Chairman, as the Committee looks at ways to build up our
    Nation's mass transit infrastructure, I would like to point out that
    nowhere is the demand and, in fact, need for more mass transit more
    evident than in my State of New Jersey, the most densely populated
    State in the Nation. A study done by the New Jersey Institute of
    Technology in July 2001, found that the average New Jersey driver
    spends almost 50 hours a year stuck in traffic. For all this time stuck
    in traffic, that's an average cost per driver of $1,255 in wasted
    gasoline and lost productivity--for a total cost of $7.3 billion a
    year.
        And as a 25 year commuter to New York City from northern New
    Jersey, I can personally testify to the frustrations of the gridlock on
    our roadways and overcrowding of our mass transportation systems.
        To New Jersey's credit, we realize that we cannot build enough
    roads to meet our transportation needs. As a result, we have invested
    heavily in creating mass transit opportunities to get drivers off the
    road. Rail lines such as the Hudson-Bergen and Newark-Elizabeth Light
    Rail lines are being built to alleviate traffic congestion, as well as
    help revitalize New Jersey's urban areas. I will fight to secure
    sufficient Federal funding for these projects in the next TEA-21
    legislation.
        But our transit needs have also changed dramatically since
    September 11. Although New Jersey did not suffer direct physical damage
    on that terrible day, our transit infrastructure has been dramatically
    scarred. One of the three rail tunnels New Jersey commuters relied on
    to get into New York City, the PATH tunnel into the World Trade Center,
    has been closed and will not open for at least 18 months. Prior to
    September 11, approximately 66,000 commuters from New Jersey traveled
    to work each day via that tunnel, and must find another way to get to
    work. In addition, thousands of workers are now ``reverse commuting''
    into New Jersey.
        The closure of the PATH tunnel has put a strain on remaining rail
    lines that were already operating on a standing-room-only basis. If you
    are one of the commuters who manages to get on one of these standing-
    room-only rail cars, you know how miserable the situation is. Mr.
    Chairman, these cars are so crowded that conductors cannot even move
    down them to collect tickets!
        I have been working with my colleague from New Jersey, Senator
    Torricelli, to find money to provide some emergency help to fix this
    problem. I am proud that last year we secured $200 million in funding
    in the supplemental appropriations for emergency transportation and
    ferry assistance for New Jersey. But for the long-term, we have to
    create new mass-transit opportunities for New Jersey's commuters. And
    at the head of this list has to be a new commuter rail tunnel into New
    York which has been studied and studied and studied.
        Before September 11, there was a great need for another rail tunnel
    into New York City. It was predicted that by 2003 demand would have
    overtaken supply on our existing rail system infrastructure. Since
    September 11, that timetable has quickened as the pattern of
    transportation has dramatically shifted. In addition to the
    overcrowding I mentioned, we now have a need to reach the many jobs
    that have moved to midtown and upper Manhattan from lower Manhattan.
        As the Banking Committee deals with this reauthorization, I will
    push for funding for a new trans-Hudson tunnel as additional funding
    for the Hudson-Bergen and Newark-Elizabeth rail options when the
    Banking Committee considers the next TEA-21 legislation.
        Mr. Chairman, thank you for holding this hearing and I look forward
    to hearing from our witnesses.

                                   ----------

                   PREPARED STATEMENT OF SENATOR ZELL MILLER

        Good morning. I am pleased to participate in today's hearing
    regarding reauthorization of the Transportation Equity Act for the 21st
    Century--TEA-21. The theme of today's hearing--Transit in the 21st
    Century: Successes and Challenges--is befitting. It is an indication of
    the problems we face regarding congestion, air quality, mobility for
    our citizens, and limited funding, but also the promises of public/
    private partnerships, creative financing, job creation, efficiently
    getting people where they need to go, and the mitigation of problems
    associated with nonattainment areas.
        Because of the budget mechanisms inherent in TEA-21, the Federal
    transit program will receive this fiscal year a total of $6.74 billion
    from the mass transit account of the highway trust fund and from
    general revenues. The President's budget requests $7.2 billion for
    transit for the next fiscal year. That is a lot of peanuts and that is
    why this hearing is so important. TEA-21 expires September 30, 2003, so
    we must be about the people's business now to reauthorize this
    important legislation by next year.
        I represent a State with large metropolitan areas and rural
    communities, cities bustling with businesses and nonattainment areas
    facing air quality concerns. Throughout the coming months we will need
    to discuss guaranteed funding and flexibility in how to expend those
    funds. With the increased security concerns, we will need to discuss
    safety of our transit systems. We must continue to explore also the
    promise of partnering with private entities and localities to continue
    to get more bang for our bucks.
        Our transit systems have enhanced our air quality, relieved areas
    of debilitating congestion, and increased mobility to those who,
    because of income, age, or disability, do not have access to
    automobiles to get to the doctor, go to the grocery store, or get to
    work. We also see the positive ripple effects of job creation in
    sectors of the economy that support our transit systems.
        Throughout my tenure in public office I have seen the changes in my
    State and in this country from the 1960's, when private transit
    operations were financially distressed and local public agencies were
    created to take over those important operations; to the 1964 Urban Mass
    Transportation Act for capital expenditures; to the 1974 National Mass
    Transportation Act for operating assistance; to today where we have
    effective public/private partnerships, flexibility in guaranteed
    funding, and
    holistic, intermodal approaches to transportation planning.
        Whether we are dealing with the Capital Beltway around Washington,
    DC, or the bypass around Atlanta, we are familiar with the delays and
    the fumes. It is even estimated that Americans in our urban areas spend
    billions of hours in 1 year stuck in traffic amounting to $78-$100
    billion in lost time and wasted fuel. Additionally, many of these areas
    throughout the country are nonattainment areas. Our transit systems
    play an integral role in mitigating congestion, improving air quality,
    and getting people where they need to go.
        I am encouraged by the successes of public transportation and the
    mechanisms included in the landmark TEA-21 legislation. I am looking
    forward to addressing the upcoming issues regarding reauthorization and
    reconciling our budgetary concerns with the need for a vibrant
    partnership between the Federal Government, State and local entities,
    and private businesses. I welcome Secretary Mineta and look forward to
    the testimony of all of today's witnesses.

                                   ----------

               PREPARED STATEMENT OF SENATOR CHRISTOPHER J. DODD

        First of all, I want to thank Secretary Mineta and our other
    witnesses for being here today. Mr. Millar, Mr. Marsico, Mr. Inglish,
    thank you.
        As we begin considering the reauthorization of our Federal highway
    and transit programs, I hope that each of you will remember that many
    of us on the Banking Committee have a keen interest in helping to
    ensure that our transit programs contribute to a seamless and well-
    integrated multimodal transportation system that meets the needs of
    Americans, not only in our urban centers, but also in communities large
    and small across the entire country. Our transportation system is an
    intricate web and Federal policy must continue to be broad enough and
    flexible enough to sustain each part of the web.
        We know that disruptions in one part of the transportation system
    can have
    far-reaching impacts across the entire system. In the aftermath of the
    attacks on September 11, we discovered some of the weaknesses in our
    transportation system, but we also discovered some of the ways in which
    reliance can be built into our policies. When the commercial airlines
    were shut down on September 11, travelers flocked to Amtrak stations.
    When people were forced to abandon their cars here in Washington, they
    were able to get home on Metro. In many ways, the system worked and
    September 11 provided an extraordinary lesson on why it is so important
    for America to maintain a diverse transportation portfolio. Transit and
    highways, airlines and Amtrak; these are not competing modes of
    transportation, they are complementary services that contribute to the
    same goal: better, safer, and more reliable mobility for all Americans.
        Our Nation's urban mass transit systems have historically served as
    both economic engines for our prosperous cities and economic lifelines
    for people stranded in neighborhoods where there are no jobs, no
    grocery stores, or no doctors' offices.
        For more than a century, transit has been a means for moving huge
    numbers of people into and through some of the most productive urban
    centers in the country--New York, Chicago, and San Francisco. Millions
    of Americans ride commuter trains, subways, and buses every morning
    because public transit offers the best, most hassle-free way to get
    downtown. But as traffic congestion clogs not only the arteries into
    our largest cities, but even the capillaries in our smaller towns, we
    need to ask whether there are new models for transit, not based on the
    what works in New York and Chicago, but what might work in Boise and
    Spokane, Stamford, Connecticut, and Biloxi, Mississippi. In my opinion,
    the Jobs Access Program--which makes grants to local nonprofit agencies
    to design and provide workplace oriented transit services--has been a
    tremendous success precisely because it has been flexible enough to
    adapt to local needs and local conditions.
        I noted that in his prepared testimony Dale J. Marsico of the
    Community Transportation Association of America has proposed developing
    a method for allowing small communities to get waivers from some of the
    more restrictive FTA regulations. While I think we need to look very
    closely before enacting any general waiver program, I applaud CTAA for
    trying to offer innovative ideas to improve the relationship between
    FTA and small community transportation providers. I look forward to
    hearing more from Mr. Marsico and others about how we can build a
    better partnership between transportation providers and the Federal
    Government.
        Transit is part of the solution to our Nation's transportation
    problems. Increasingly, transit is the mode of choice for millions of
    commuters. In my view, we have an obligation to ensure that transit is
    safe and reliable and to ensure that it works in conjunction, not
    competition, with other modes of transportation. I believe that we can
    only meet that obligation if we are willing maintain and improve our
    strong ties to State and local governments and private sector
    transportation providers.

                                   ----------

                    PREPARED STATEMENT OF SENATOR PHIL GRAMM

        Secretary Mineta, thank you for joining us today. I want to raise
    an issue that I am concerned about, and that is the whole issue related
    to the contract to run the mass transit in Boston with Amtrak. The
    short history on the situation is that until 2000, Amtrak had the
    contract. Then there was a competitive bid as required by law. Amtrak
    was the high-cost bidder, but they were evaluated on a quality basis as
    the least qualified bidder. The low bidder was $116 million dollars
    below Amtrak. But what happened then was the broadest interpretation of
    Section 13(c) that had ever come forward.
        The new contractor was required to honor all the old work rules,
    and to hire all the same people or to pay them 7 years severance up
    front. As a result of this, the agreement was destroyed. To this day,
    the same contractor is doing the work that lost this competitive bid,
    the same on that was the high bidder and the low-quality bidder.
        It all comes down to the interpretation of Section 13(c). I know it
    is easy for someone to sit up here and complain about these issues, but
    I also realize that they are very hard to do something about. The plain
    honest truth is that we have allowed feather-bedding in contracts that
    were really aimed not at promoting the well-being of people who ride
    the mass transit, but that instead literally rob these systems and hold
    up everybody that uses these facilities.
        It is unfortunately true, and some people might view it as a mean
    statement, but the bottom line is: too often in America today we run
    mass transit for the benefit of the people who run mass transit--not
    the people who pay for it, and not the people who ride it, but the
    people who run it. I would like to ask you, Secretary Mineta, to go
    back and look at this decision. I know we are in the process of looking
    at having a new bid, but if you are going to employ Section 13(c) so
    broadly that you are going to have to pay everybody that works there
    for the rest of their natural life, then you are never going to be able
    to modernize this system.
        One of our biggest problems with Amtrak, which is a separate issue
    other than that they are the contractor here, is that we could make
    many passenger rails work in specific parts of the country if we were
    not saddled with all of these old work rules, and all of these labor
    requirements were written in another century. Back then, railroads were
    vast monopolies that were supported by almost unlimited Government
    subsidies. I think, not only is this important because a lot of people
    live in Boston that are important to the economy, but also the
    principle is important.
        Secretary Mineta, I want to urge you to take a long hard look at
    this. It is one thing to enforce a law as it is written, it is another
    thing to use a law to prevent the very things we all claim we support.
    And the thing I would assume that almost every Member of Congress would
    say they are for is competition and competitive bidding. So if you
    would take a look at this issue, I would appreciate it. Thank you.

                                   ----------

                 PREPARED STATEMENT OF SENATOR MICHAEL B. ENZI

        Thank you, Mr. Chairman, for holding this hearing. I am very
    pleased to have an opportunity to hear from the U.S. Department of
    Transportation's Secretary Norman Mineta and the other witnesses
    regarding Transit in the 21st Century and what has and has not worked
    for transit in our communities since the authorization of the
    Transportation Equity Act for the 21st Century (TEA-21).
        As you know, TEA-21 has provided State and local governments with
    greater flexibility, yet stability, in transportation funding. This has
    been achieved through innovative financing and record levels of
    transportation investment. In the upcoming year, I am excited to work
    with my colleagues, the U.S. Department of Transportation, the State
    and local government officials, and other interested parties to ensure
    that we expand on the solid and balanced structure of TEA-21.
        Because Wyoming's population is approximately 480,000 people
    statewide, rural transit is especially of concern to me and my
    constituents. I have heard from several constituents in Wyoming
    regarding the need for stable and reliable transit service in our rural
    communities. One of my goals as a U.S. Senator, as well as the
    Wyoming Congressional delegation as a whole, is to improve transit
    service to Wyoming's cities and towns. A firm commitment to our
    communities' transit needs will help maintain economic growth and job
    creation in Wyoming. I am currently working with the Wyoming Department
    of Transportation and local officials in Wyoming to find ways to
    improve transit service in our smaller, more rural communities.
        In closing, the Senate Committee on Banking, Housing, and Urban
    Affairs is committed to ensuring that our colleagues, the U.S.
    Department of Transportation, and other interested parties stay on task
    in an efficient and effective manner to ensure the most equitable and
    flexible transit for communities nationwide. Again, I want to thank
    Secretary Mineta and the other witnesses for being here today. I look
    forward to hearing from you today and look forward to further
    discussing transit issues with each of you and your staff in the months
    to come. Thank you again, Mr. Chairman, for holding this hearing.

                                   ----------

                     PREPARED STATEMENT OF NORMAN Y. MINETA
                  Secretary, U.S. Department of Transportation
                                 March 13, 2002

        Mr. Chairman, Members of the Committee, thank you for the
    opportunity to speak about the implementation and reauthorization of
    the public transportation provisions of the Transportation Equity Act
    for the 21st Century (TEA-21).
        With this Committee's leadership, and with the active participation
    of our State, local and private sector partners, the Department of
    Transportation has worked to realize the purposes and objectives of
    TEA-21. I would like to commend the Committee for continuing its
    leadership by scheduling this hearing on the reauthorization of TEA-21.
    We look forward to working with you in shaping proposals for the
    reauthorization of this legislation and establishing the base of
    resources necessary to meet the public transportation challenges facing
    the Nation.
        Three decades ago, as Mayor of San Jose, California, I learned that
    the tool that made the most difference in my community was
    transportation. Nothing else had as great an impact on our economic
    development, growth patterns, and quality of life. What I have found in
    the years since is that this is true not just locally, but also
    nationally. A safe and efficient transportation system is essential to
    keeping people and goods moving, and making cities and communities
    prosperous. And public transportation has an important role to play in
    achieving these goals.
        Like many Members of Congress, I take great pride in the enactment
    of the predecessor of TEA-21, the Intermodal Surface Transportation
    Efficiency Act of 1991 (ISTEA), during my years in the House of
    Representatives. With that legislation we established new principles
    for the implementation of the Nation's surface transportation programs,
    and built partnerships with local and State officials to advance the
    strategic goals for transportation capital investment. ISTEA
    established flexibility in the use of funds; a commitment to
    strengthening the intermodal connections of the Nation's transportation
    system; new investments in, and deployment of, information technologies
    for transportation services; and a heightened sensitivity to the
    impacts that public transportation has on our quality of life and on
    the shape and character of America's communities.
        TEA-21 built upon the programmatic initiatives of ISTEA, and,
    through its financial provisions, provided State and local governments
    and other transportation providers with greater certainty and stability
    in transportation funding. It achieved this in part through innovative
    financing mechanisms, including the budgetary firewalls, as well as
    record levels of transportation investment.
        The programmatic and financial initiatives of these two historic
    surface transportation acts have provided us with a solid and balanced
    structure around which we can shape this reauthorization legislation.
    Yet, although we should continue and build upon ISTEA and TEA-21, we
    have an opportunity and an obligation to do more than that.
        This is a time of extraordinary challenge and opportunity in the
    transportation sector. On September 11, a determined and remorseless
    enemy challenged one of America's most cherished freedoms, our freedom
    of movement. The events of that day demonstrate how critical the
    Nation's transportation system is to the freedom of every American and
    to the Nation's security and economic well-being. In fact, transit
    played a critical role at Ground Zero in New York City, in Washington
    DC, and in countless other cities across the country. Transit systems
    safely transported millions of people out of harm's way, as downtown
    areas, including New York and Washington DC, were evacuated with
    reliance on the quiet heroism of the Nation's public transportation
    workers.
        In shaping this surface transportation reauthorization bill, we
    must maximize the safety and security of all Americans, even as we
    enhance mobility, reduce congestion, and grow the economy. These are
    not incompatible goals; indeed, the lessons of ISTEA and TEA-21
    demonstrate that all are appropriate goals of national transportation
    policy and that they reinforce each other. It is possible to have a
    transportation system that is safe and secure, efficient, and
    productive.
    TEA-21's Record
        In five principal areas, TEA-21 has strengthened the Nation's
    transportation system: the stability, equity, and flexibility of
    funding; safety; mobility and system
    upgrading; the application of innovative technologies; and quality of
    life.
    Funding Levels and Program Equity
        TEA-21 revolutionized transportation funding and provided record
    amounts of spending for public transportation, a 50 percent increase
    over the period of ISTEA. Funding of a significant share of the public
    transportation program came from the Mass Transit Account of the
    Highway Trust Fund, and the new budgetary firewalls created confidence
    among grantees regarding program funding. Funding stability has been
    one of the most important features of TEA-21, as States and local
    communities have relied upon these assurances and increased their own
    funding levels to match the commitments made in TEA-21.
        Equally important is funding flexibility, first allowed under ISTEA
    and continued in TEA-21. Flexible funding allows our States and our
    communities to tailor their transportation choices to meet their unique
    needs, and enables State and local decisionmakers to consider all
    transportation options and their impacts on traffic congestion, air
    pollution, urban sprawl, economic development, and quality of life.
    Indeed, since ISTEA, over $7.7 billion has been transferred from Title
    23 programs to public transportation programs, providing critical
    resources to supplement the basic public transportation authorization
    levels. During the same period, less than $50 million has been
    transferred from transit programs to the highway programs.
        TEA-21's innovative loan and grant programs have further augmented
    both the highway and transit programs. The Transportation
    Infrastructure Finance and Innovation Act (TIFIA) has provided almost
    $3.6 billion in Federal credit assistance to eleven projects of
    national significance, representing $15 billion in infrastructure
    improvements. These loans, loan guarantees, and lines of credit for
    highway, transit, and rail projects have encouraged private investment
    to strengthen transportation infrastructure. Public transportation
    projects have included support for the Washington Metropolitan Area
    Transit Authority's Capital Improvement Program, the Tren Urbano
    project in San Juan, and improvements to the Staten Island Ferry.
    Safety and Security
        The Department's paramount concern is to assure the American public
    that the Nation has the safest, most secure system possible, as our
    transportation system works to meet the needs of the American economy.
    The United States has an enviable transportation safety record, and
    public transportation's record is an important part of this picture.
    TEA-21's increased funding allowed public transportation agencies to
    make public transportation even safer by enabling agencies to make
    improvements to the transportation infrastructure that enhance safety
    and security.
        Our world, however, changed abruptly on September 11. In the week
    immediately following the terrorist attacks, I established the National
    Infrastructure Security Committee (NISC) to evaluate security in the
    surface modes of transportation and make recommendations for
    improvements. NISC created six ``Direct Action Groups'' (DAG's) to
    handle specific modes of transportation. The DAG's interviewed industry
    representatives, studied transportation system vulnerabilities,
    evaluated security protocols and procedures, and developed
    recommendations to improve security across the transportation network.
        Any discussion about security in transportation today, of course,
    must begin with the Transportation Security Administration (TSA). As
    you know, TSA's initial focus is on aviation security. However, we know
    that security does not end at the airport perimeter. We are
    fundamentally committed to creating a system, together with States and
    local governments, which works to protect the entire transportation
    network in America. The underlying management structure and operating
    guidelines are being developed to address the full scope of
    transportation security needs because, from the traveling public's
    point of view, we are one system.
        Even as TSA focuses on its initial mission of enhancing aviation
    security, other modes are stepping up to the new security challenges
    that we, as a Nation, face. For example, the Federal Transit
    Administration launched a major security initiative shortly after
    September 11, working with transit agencies across the Nation to
    enhance transit security. Using state-of-the-art threat and
    vulnerability assessment techniques, we are working hand-in-hand with
    the Nation's major transit providers to identify high-risk/ high-
    consequence assets and determine how best to mitigate those risks. In
    addition, transit operators across the Nation are taking advantage of
    new security awareness and response training opportunities for their
    employees.
        This new security initiative added to the overwhelming success of
    the transportation systems supporting the 2002 Winter Olympics last
    month. While providing enhanced security, transit systems in the Salt
    Lake City area simultaneously moved record levels of users to and from
    multiple Olympic venues over a 17 day period without a serious security
    incident. The DOT's partnerships with the Utah Transit Authority, Utah
    Department of Transportation, and others were crucial to this
    internationally significant success. In partnership with Federal,
    State, and local law enforcement officials, we formed new security
    relationships during the Olympic experience that will serve as a
    benchmark for future efforts. While I am on the subject of the
    Olympics, I would also like to take this opportunity to commend the
    transportation community for providing superb accessibility for the
    elderly and people with disabilities during the Games.
    Mobility and System Upgrading
        ISTEA and TEA-21 placed an unprecedented emphasis on developing a
    seamless, intermodal transportation system that links highways, rail,
    transit, ports, and airports. The dramatically increased funding under
    TEA-21 also enhanced mobility by upgrading the condition of public
    transportation systems. As a direct result of the increased spending
    provided in TEA-21, overall public transportation conditions have
    improved dramatically.
        TEA-21 also permitted a significant increase in transit service
    levels and capacity. As of 2000, the Nation's public transportation
    infrastructure included over 105,000 vehicles, 759 urban bus and rail
    maintenance facilities, 10,572 miles of track, and 2,825 rail stations.
    Between 1997 and 2000, the number of transit vehicles increased by 10.3
    percent, track mileage grew by 3.6 percent, the number of stations
    increased by 2.3 percent, and the number of maintenance facilities grew
    by 4.1 percent.
        The substantial investment in the Nation's transit systems has also
    resulted in an increase in transit ridership. Preliminary estimates
    indicate that more than 9.6 billion public transit trips were taken in
    2001, an increase of 2 percent over 2000. Since 1993, public
    transportation use has increased by nearly 28 percent, the fastest
    growth rate among all forms of surface transportation.
        TEA-21 also authorized the Job Access and Reverse Commute (JARC)
    Program to address transportation gaps in public transit systems and
    reduce barriers for those moving from welfare to work. This program has
    made transit services available to many who previously did not have
    access to adequate transportation and, thus, to jobs. As of fiscal year
    2000, the JARC Program had made new transit service available at more
    than 16,000 job sites.
    New Technologies
        The Department of Transportation has made significant strides in
    research under TEA-21. Important research programs include the
    development and deployment of Intelligent Transportation Systems (ITS),
    public transportation vehicle improvements, and the development of new
    operating concepts such as Bus Rapid Transit.
        TEA-21 authorized a total of $603 million for ITS research for
    fiscal year 1998 to 2003, and significant progress has been made in
    applying this technology to our surface transportation system. ITS
    technology, for example, helped to bring real-time improvements in
    transportation to the just-completed Winter Olympic Games. Thanks to
    TEA-21, the Utah Transit Authority partnered with the Utah Department
    of Transportation to invest $78 million in TEA-21 funds to develop a
    model multimodal Intelligent Transportation System, including a state-
    of-the-art, voice-
    activated ``511'' system that provided information on public
    transportation, Olympic travel, road conditions, and other subjects
    that was vital to moving hundreds of thousands of people in and around
    Salt Lake City.
        Throughout America, communities are calling for more energy-
    efficient and clean public transportation vehicles. Through the
    resources of TEA-21, the Department has been able to work with local
    agencies and their private partners to take advantage of developments
    in automotive electronics, clean fuels, and aviation engineering to
    introduce vehicles with hybrid electric engines, integrated computer
    management systems, and light-weight, durable composite materials. As a
    result, public transportation vehicles are being deployed around the
    Nation with increased fuel economy, more efficient operations, and less
    polluting engines. We are not, however, resting on these achievements.
    TEA-21 provided $29.1 million to bring fuel cell technology to public
    transportation. The California Fuel Cell Partnership is one example in
    which public transportation agencies, bus manufacturers, and auto
    companies are working together to move this zero-emission, highly
    efficient propulsion technology to market.
        Bus Rapid Transit (BRT) has also benefited from technological
    advances made possible, in part, through TEA-21. Combining exclusive
    transit-ways, modern stations, high-tech vehicles, and frequent
    service, BRT provides--at a fraction of the cost--the high level of
    service that people want and expect from more expensive transit
    systems. And investments in Intelligent Transportation System projects
    have made BRT even more convenient, fast, reliable, and safe. For
    example, Automated Vehicle Location technologies such as satellites or
    roadside sensors can now track the location of BRT vehicles, providing
    information for electronic ``next vehicle''
    displays at stations and on-board automated stop announcements. Signal
    priority systems also use vehicle location information to control
    traffic signals cycles to give priority to BRT vehicles, while transit
    operators use it to achieve more consistent
    passenger wait times.
        Continued Federal investment in the development of new
    transportation technologies will have enormous benefits for America--
    reducing congestion, improving air quality, and making public
    transportation an attractive travel alternative.
    Quality of Life
        TEA-21 has given States and communities across America additional
    tools and opportunities to enhance the environment and quality of life
    for their residents. It continued and increased funding for several
    programs originally authorized in ISTEA, broadened eligibility for
    others, and established the new Transportation and Community and System
    Preservation Pilot (TCSP) program.
        Authorized at $120 million under TEA-21, the TCSP program is a
    discretionary grant program intended to strengthen the linkages between
    transportation and land use. The grants have provided funding for
    planning and implementation, as well as technical assistance and
    research to investigate and address the relationships among
    transportation, community and system preservation, and private sector-
    based initiatives.
        The Congestion Mitigation and Air Quality Improvement (CMAQ)
    program has
    focused on improving air quality. Under TEA-21, it has provided more
    than $8 billion in funding for use by State and by local partners to
    support traffic flow projects, cleaner fuels, improved transit
    services, and bicycle and pedestrian programs that reduce congestion
    and emissions, and improve the quality of life. A significant share of
    the Title 23 program funds transferred for public transportation use
    came from the CMAQ program.
        TEA-21 directed the Department to streamline environmental reviews.
    With this directive in mind, we are working to assist States and
    communities in building infrastructure more efficiently, while
    retaining important environmental protections that maintain our quality
    of life. Since the enactment of TEA-21 in 1998, streamlining of the
    planning and approval process for projects has taken root throughout
    the country, producing interagency personnel funding agreements that
    result in faster, concurrent reviews; a merged process for wetland
    permits with the Army Corps of Engineers; and delegated authority for
    historic resources. While most of the focus on ``environmental
    streamlining'' has been on improving the process for highway projects,
    public transportation projects can also benefit from streamlining the
    environmental clearance process. While we have begun the job, more can
    and will be done.
    Building on TEA-21
        The Department of Transportation looks forward to working with both
    Houses of Congress, State and local officials, tribal governments, and
    stakeholders in shaping the surface transportation reauthorization
    legislation. We have established an intermodal process to develop
    surface transportation legislative proposals for reauthorization. A
    number of intermodal working groups have already identified key issues
    and programmatic options, and, over the next few months, the Department
    will be working with stakeholders and Congressional committees in
    shaping the reauthorization legislation.
        In that effort, the Department will be motivated by the following
    core principles and values:

     Assuring adequate and predictable funding for investment in
        the Nation's transportation system. This funding can contribute to
        the long-term health of the
        economy and, by enhancing the mobility of people and goods, by
        promote greater productivity and efficiency.
     Emphasizing the security of the Nation's surface
        transportation system by providing the means and the mechanisms to
        perform risk assessment and analysis, incident identification,
        response, and, when necessary, evacuation.
     Preserving funding flexibility to allow the broadest
        application of funds to transportation solutions, as identified by
        States and local communities.
     Building on the intermodal approaches of ISTEA and TEA-21.
     Fully utilizing innovative financing programs, in order to
        encourage greater private sector investment in the transportation
        system, and examining other means to augment existing trust funds
        and revenue streams.
     Strengthening the efficiency and integration of the Nation's
        system of goods movement by improving international gateways and
        points of intermodal connection.
     Making substantial improvements in the safety of the Nation's
        surface transportation system. It is not acceptable that the Nation
        suffers 41,000 deaths and over 3 million injuries annually on our
        highways.
     Simplifying Federal transportation programs and continuing
        efforts to streamline project approval and implementation.
     Developing the data and analyses critical to sound
        transportation decisionmaking.
     Fostering ``intelligent everything'' in the development and
        deployment of technology, such as pavement monitoring, message
        systems, remote sensing, and toll collection.
     Focusing more on the management and performance of the system
        as a whole rather than on ``inputs'' or the functional components
        such as planning, development, construction, operation, and
        maintenance themselves.
     Ensuring an efficient infrastructure while retaining
        environmental protections that enhance our quality of life.

        This is a moment of great opportunity. As was true when Congress
    considered the landmark ISTEA and TEA-21 legislation, we now have the
    prospect of creating a legacy that will serve the transportation needs
    of the American people for decades to come. I am confident that,
    working together, the Administration and Congress can preserve,
    enhance, and establish surface transportation programs that will
    provide not only for a safer and more secure system, but also for one
    that is more efficient and productive and that enhances the quality of
    life.
        From major urban centers to small communities, TEA-21 has created a
    revolution of sorts in transportation, through stable funding,
    innovative financing, and investments in new technology. This, in turn,
    has resulted in increased mobility, more transportation choices, and
    more economically vital communities for millions of Americans. Today,
    as we continue to respond to the events of September 11, we should
    strengthen, not diminish, America's freedom of movement, and we should
    enhance our transportation systems to effectively grow the economy. The
    reauthorization of our surface transportation programs provides us with
    the opportunity to do that even more effectively.
        Mr. Chairman, thank you again for the opportunity to testify before
    you today. I look forward to responding to any questions you may have.

                                   ----------

                    PREPARED STATEMENT OF WILLIAM W. MILLAR
             President, American Public Transportation Association
                                 March 13, 2002

    Introduction
        The American Public Transportation Association (APTA) appreciates
    the opportunity to testify on the upcoming reauthorization of the
    Transportation Equity Act for the 21st Century (TEA-21).
        APTA's 1,400 public and private member organizations serve the
    public and the public interest by providing safe, efficient, and
    economical public transportation service, and by working to ensure that
    those services and products support national energy, environmental,
    community, and economic goals. APTA member organizations include
    transit systems and commuter railroads; design, construction, and
    finance firms; product and service providers; academic institutions;
    and State associations and departments of transportation. More than 90
    percent of the people who use public transportation in the United
    States and Canada are served by APTA member systems.
    TEA-21 Has Sparked a Transit Renaissance
              The car was over crowded, folks were hanging on the straps,
              Girls had bundles in their laps, came from Macy's store
            perhaps;
              You couldn't carve your way out with a carving knife or ax
              Remember I am telling honest facts, . . .
              Hold fast! Don't you lose your nerve!
              Grab your lady by the arm, we're going 'round the curve
              Keep your wits about you and you'll never get a jar,
              If you listen to the man who runs the trolley . . . car!

        Mr. Chairman, the above lyrics are from a 1901 song entitled Hold
    Fast! by
    Jerome and Schwartz, which is featured in the exhibit on transit and
    its unique relationship to the American City now at the National
    Building Museum. The lyrics come from a time when public transportation
    was the lifeblood of the American City and people packed onto transit
    cars as tight as sardines in a can. It has now been a century since
    ``Hold Fast'' was published, and thanks in no small part to Congress'
    investment in the TEA-21 Federal transit program, once again the song's
    lyrics ring true. Public transportation is experiencing a renaissance
    in the United States and is enriching the lives of our citizens by
    giving them mobility and freedom of transportation choice. However, if
    transit's resurgence is to continue, we need to increase investment in
    public transportation infrastructure, maintain the TEA-21 guaranteed
    funding provisions, and streamline delivery of the transit program.

    Transit Ridership is at Record Levels
        Americans used public transportation a record 9.6 billion times in
    2001 and transit ridership has grown 23 percent since 1995 according to
    preliminary ridership figures just released. This represents the
    highest level in more than 40 years. Over the last 6 years, transit
    usage has grown faster than the population (4.5 percent), highway use
    (11.8 percent), and domestic air travel (12 percent). In 2000,
    ridership was up in all modes and in all parts of the country. In the
    light rail category, Denver (41 percent), San Jose (34 percent), and
    New Jersey Transit (38 percent) experienced tremendous ridership
    success. New light rail service in Salt Lake City is
    exceeding estimates and was a big success during the recent Olympic
    Games. The commuter rail operations in Dallas (39 percent) and in
    Baltimore (7.5 percent) have had continued success. Heavy rail
    ridership increased by more than 7 percent in New York City,
    Washington, DC, and Philadelphia, and it rose by nearly 4 percent in
    Chicago and by almost 13 percent in San Francisco. Bus service was up
    in large cities like Washington, DC (8.4 percent) and New York City DOT
    (6.7 percent), as well as in cities across the country like Birmingham,
    AL (5.7 percent) and Spokane, WA (5.1 percent).

    Investment in the TEA-21 Transit Program Has Paid-Off
        The record transit ridership increases are a direct result of the
    increased Federal investment in TEA-21. TEA-21 authorized $41 billion
    for public transportation, and guaranteed $36 billion, a significant
    increase over the previous funding. This funding increase benefited
    transit systems in both urban and rural areas. In 1997, before TEA-21,
    total funding for the rural program was $115 million. In 2002, the
    rural program is funded at $223.4 million, an increase of 95 percent.
    This compares with a 65 percent increase in the overall growth of the
    Federal transit program over the same period. A crucial provision of
    TEA-21 has been the budgetary ``firewalls,'' which guarantee that
    Transportation Trust Fund monies are used for transportation purposes.
    The transit funding guarantee provision has been instrumental in
    insuring that transit funding has increased as intended by TEA-21.
    Since the Federal Transit Program is now primarily a capital investment
    program, the predictability and reliability of funding under the
    guarantee has been a big plus for transit agencies that must develop
    long-term-capital plans. It lets them operate in a businesslike
    fashion, and the private markets are much more interested in public/
    private

    innovative investment plans with an assured level of Federal funding.
        The additional TEA-21 transit and highway investments have been put
    to work wisely and expeditiously on an existing array of state-of-the-
    art transportation improvements. Nearly 200 new or expanded rail or bus
    or rapid transit projects were authorized under TEA-21 for 88 areas in
    more than 40 States. The TEA-21 investments have enriched the lives of
    Americans by giving them mobility and the freedom to do what they want
    and need to do, and created real success stories. To
    capture some of these success stories, APTA and the American
    Association of State Highway and Transportation Officials (AASHTO)
    jointly published a report called Money at Work, * which we are pleased
    to submit for the record.
    ---------------------------------------------------------------------------
        * Held in Committee files.
    ---------------------------------------------------------------------------
    Transit Plays Key Role in National Emergencies
        Perhaps one of the best illustrations of the benefits of the
    investment in the transit program was the role that transit played
    during the September 11, 2001 terrorist attacks. On September 11,
    citizens in New York and Washington relied on public transportation as
    the mode of choice to evacuate from the urban core. In New York,
    hundreds of thousands of citizens were evacuated quickly and without
    injury. Here in Washington, the Washington Metropolitan Area Transit
    Authority (WMATA) proved its value as a regional evacuation system
    running the equivalent of two rush hours back-to-back and moving
    thousands of citizens out of harms way. This same story was true all
    across the country as transit systems helped evacuate citizens from
    shut down airports and center cites. We have a report in this regard,
    America Under Threat: Transit Responds to Terrorism,* which we are
    pleased to submit for the record.
    ---------------------------------------------------------------------------
        * Held in Committee files.
    ---------------------------------------------------------------------------
    The TEA-21 Transit Investment Has Made Positive Contributions
    to the U.S. Economy
        In addition to significant increases in transit use, TEA-21
    investments in the transit program have generated significant economic
    benefits. APTA has produced a publication, Public Transportation Means
    Business *, which highlights the significant economic benefits of
    transit investment. The report illustrates how investment in transit
    sparks an economic chain reaction that generates business activity,
    creates jobs, boosts property values and tax earnings, maximizes
    transportation spending, and gets people to work. We want to also
    submit that report for the record.
    ---------------------------------------------------------------------------

    ---------------------------------------------------------------------------
        Not only is the TEA-21 transit investment spurring economic growth
    in the Nation's major metropolitan areas, but it is boosting the
    economy in smaller towns and rural areas as well. For example,
    investment in transit systems nationwide has fueled the growth of
    Chance Coach in Wichita, Kansas. With a new manufacturing plant opened
    in 2000, the company has increased its staff, production and sales, and
    created a successful public transportation business which contributes
    over $15 million annually to the local economy. There are numerous
    other examples of bus manufacturers operating in the Nation's
    heartland. Neoplan USA buses are built in Lamar, Colorado and
    Brownsville, Texas; New Flyer buses in St. Cloud, Minnesota; Nova buses
    in Roswell, New Mexico; North American Bus Industries buses in
    Anniston, Alabama; Champion buses in Imlay City, Michigan ; MCI buses
    in Pembia, North Dakota; and Orion buses in Oriskany, New York. In
    addition, Kawasaki will be building rail cars in Lincoln, Nebraska.

    Transit Investment and the Environment
        The TEA-21 transit investment is also helping to protect the
    environment. Mr. Chairman, let me tell you about something in our own
    backyards. An article in last week's Washington Post (3/4/02) said that
    Maryland's population of Baltimore Orioles, long in decline, could
    vanish altogether late this century due to a dramatic changes in
    migration patterns and declining habitats strongly influenced by global
    warming. The article cites as study by the American Bird Conservancy
    which suggests that the effects of global warming may be robbing
    Maryland and a half-dozen other States of an important piece of their
    heritage by hastening the departure of their State birds. The report
    says the earth's rising temperature, which scientists attribute to
    carbon dioxide and other greenhouse gases, is already shifting songbird
    ranges, altering migration behavior and perhaps diminishing some
    species' ability to survive. The good news is that transit use can help
    reduce greenhouse gas emissions. For example, here in the Washington
    region alone, the Metrorail system removes 325,000 vehicles from the
    road and helps to keep approximately 1,400 tons of hydrocarbons, 9,000
    tons of carbon monoxide, and 700 tons of nitrogen oxides out of the
    region's air on an annual basis.

    The Demand for Public Transportation is Soaring
        The consistent annual ridership growth in nearly every mode of
    transportation sends a message loud and clear: people are leaving their
    cars at home and using public transportation more and more. As new
    systems open doors and existing systems expand their service, demand is
    exceeding the speed at which new service can be funded and implemented.
    Now more than ever, steadily growing congestion is causing people to
    seek alternative forms of transportation to commute to work, complete
    errands, make health care visits, and to get to and from sports and
    entertainment events.

    Voters Demanding More Transit
        It is no wonder that so many American cities have recently voted to
    start or expand light rail, commuter rail, or bus service in their
    communities. Just last week, on March 5, in a statewide election
    California voters overwhelmingly approved Proposition 42, which changes
    State law to require that all State gasoline tax revenue be devoted to
    transportation beginning in 2008. Under the provision, 20 percent of
    the gas sales tax funds will be used for public transportation. Voters
    have also supported recent transit initiatives in Pierce County,
    Washington; Salt Lake City, Utah; Seattle, Washington; Toledo, Ohio;
    Providence, Rhode Island; King County, Washington; Houston, Texas;
    Glendale, Arizona; and in Portage County, Ohio, among others.
        The Nation's mayors also recognize the growing demand for public
    transportation. In February, at a meeting of more than 300 mayors from
    across the country, a survey was released that showed that 80 percent
    of respondents agreed that the idea of building light rail is a viable
    alternative to driving.

    TEA-21 Reauthorization
        Without question, the TEA-21 investment in transit has paid-off by
    helping the economy and enriching the lives of millions by giving them
    mobility and freedom of choice to do what they want to do. However, the
    current level of Federal investment in the Nation's public
    transportation system is inadequate to keep up with the steadily
    growing demand for additional transit services and the need for
    improved maintenance of the core transit system. This is why
    reauthorization of TEA-21 is critical and why we urge Congress to
    preserve a strong and growing Federal investment in the surface
    transportation system.
        APTA has formed a reauthorization task force with broad
    representation from a cross section of the industry. The task force is
    working on a balanced reauthorization proposal for the entire transit
    industry. Overall, APTA supports retention of the basic principles of
    TEA-21, including a needs-based transit program. APTA's reauthorization
    proposal centers around three themes: (1) Increasing investment in the
    program; (2) Maintaining the TEA-21 funding guarantees; and (3)
    Streamlining transit program delivery.

    Increasing Needs Means Increasing Investment in the Transit Program
        APTA supports increasing investment in public transportation
    infrastructure. Additional funding is needed to maintain the existing
    capital investment and to
    expand core capacities in order to meet growing demand for service and
    support national policy goals. Overworked bus and rail fleets paired
    with increasing ridership have taken their toll over the years.
        APTA has compiled a Transit Needs Synthesis Report, which
    summarizes and makes projections based upon estimates of transit
    capital needs studies conducted by APTA, the Federal Transit
    Administration (FTA), and the Community Transit Association of America
    (CTAA). A copy of the report is attached for the Committee's review.
    Based on the study, preliminary estimated total transit industry needs
    from fiscal year 2004 through fiscal year 2009 will be $253 billion.
    This is an average of $42 billion per year, in fiscal year 2003
    dollars. The $42 billion annual amount includes: $12.4 billion annually
    to complete 208 transit new start projects authorized in TEA-21; $7.4
    billion annually for buses and bus facilities to replace over vehicles
    and to expand bus fleets to increase service; $6.5 billion annually to
    expand the core capacity of existing transit infrastructure to meet
    existing demand and prepare for continued growth in demand; $6.2
    billion for Fixed-Guideway modernization; and $3 billion for small
    urbanized and rural areas.
        The Department of Transportation (DOT) is expected to release its
    biennial ``Conditions and Performance'' report this summer. The 1999
    DOT report recommends an annual transit investment of $16 billion in
    order to improve both transit conditions and performance. However, the
    1999 Conditions and Performance report is outdated because it is based
    on anticipated transit ridership growth of 1.9 percent. Yet, actual
    ridership growth has far outpaced the 1999 estimate. Adjusting to an
    annual ridership growth of 4.5 percent and in 2003 dollars, the DOT
    needs amount becomes $27.4 billion annually. AASHTO is also expected to
    release its ``Bottom Line Report'' in Fall 2002. The Bottom Line Report
    has been compiled prior to each recent reauthorization bill and
    assesses surface transportation capital needs for highways and transit.
    APTA also plans to do another survey of its members' funding needs
    later this year.

    Maintain Transit Program Funding Guarantees
        APTA supports maintenance of the transit program budgetary funding
    guarantees. TEA-21 included a significant budget act amendment which
    created new discretionary ``mass transit'' and ``highway'' spending
    categories under the discretionary budget cap. These discretionary
    funding ``firewalls'' for surface transportation spending have ensured
    that the transit program has grown at an average rate of about 9
    percent since passage of TEA-21. Most importantly, the guarantees have
    provided transit authorities, States, and urbanized areas with
    certainty as to the level of funding they would receive each year. This
    is important because a stable funding stream is essential for transit
    authorities and States and metropolitan areas, who need to develop
    long-term transportation plans and to efficiently manage capital
    projects. The reliability of the TEA-21 transit funding has prompted
    faster project implementation, and innovations in financing, building
    and operating transportation facilities. Transit authorities, States
    and metropolitan areas have put in place aggressive new transportation
    measures to take advantage of the funding guarantees and to fully
    accelerate critical, often delayed projects.
        In addition, the provision has ensured that transportation trust
    fund revenues are spent for transportation purposes. This is critical
    because transit needs exceed $42 billion annually. Since Federal
    transit capital assistance now funds about half of all annual transit
    capital spending, this means that the Federal program when coupled with
    non-Federal matching funds is addressing less than one third of those
    needs. In this regard, APTA urges the Congress to fund the transit
    program at no less than the $7.2 billion guaranteed level in fiscal
    year 2003.

    Streamlining Program Delivery
        From streamlining the drug and alcohol testing program to
    simplifying the Federal procurement process, APTA's reauthorization
    task force is recommending a host of changes that would significantly
    simplify and improve existing Federal program mechanisms. We are
    organizing our efforts under four broad categories: Streamlining
    program delivery; Improving the planning process; Simplifying the
    procurement process; and revising other Federal programs. We look
    forward to sharing these many initiatives with the Committee.

    Conclusion: Hold Fast! Preserve and Expand TEA-21
        Mr. Chairman, the song Hold Fast ends with these words, ``Keep your
    wits about you, and you'll never get a jar, if you listen to the man
    who runs the trolley . . . car!'' In light of this admonishment, I urge
    the Committee to listen to the operators of the Nation's trolley cars
    and Hold Fast! Hold Fast by recognizing the many successes of TEA-21
    which have enhanced the American quality of life; Hold Fast by
    increasing investment in the TEA-21 transit program; Hold Fast by
    preserving the transit guaranteed funding provisions; and Hold Fast by
    streamlining delivery of the transit program.
        APTA appreciates this opportunity to testify on the development of
    legislation to continue programs authorized under the expiring
    Transportation Equity Act for the 21st Century. We believe that public
    transportation is an essential element of the Nation's transportation
    network, an element that can enhance and improve the entire system. We
    look forward to working with this Committee during the reauthorization
    process and would be pleased to provide additional information to
    assist you in your deliberations.

                       PREPARED STATEMENT OF JOHN INGLISH
                    General Manager, Utah Transit Authority
                                 March 13, 2002

        Mr. Chairman, I appreciate the opportunity to testify before the
    Senate Banking Committee today.
        I have made arrangements with Committee staff to show a brief video
    tape that has been prepared that highlights some of the recent Olympic
    transit experience. I have been in Washington for a week attending our
    trade association's annual meetings and visiting with key Congressional
    Members and staff on the Hill. Everywhere I go people have been anxious
    to hear about our very successful Olympic
    experience. I like to call it our ``Two Week Camelot Transit
    Experience.'' I am extremely proud of the great work of all of the
    individuals involved in the planning and execution of our transit
    operations for the 2002 Winter Olympics Games.
        Mr. Chairman, we had more than 700 buses from 24 States, 29 light
    rail cars from Dallas and over 1,000 driver/operators from 47 States,
    including Hawaii. These 1,000 drivers were senior operators, and were
    literally ``the best of the best'' from around the country and a key
    reason for our overall effectiveness.
        There are 5 major points I would like to make regarding our
    involvement in the Olympics:

              1. We had excellent planning and took advantage of the lead-
            time we had--preparing for the logistics of the Olympics. We
            had the support of many different organizations from around the
            country. I would especially like to single out, Dave Huber, our
            Director of Operations who was on loan to the Salt Lake Olympic
            Committee for 2 years who designed and helped execute a
            magnificent transit plan.
              2. Communications: The Utah Transit Authority, the Utah
            Department of Transportation and the Salt Lake Olympic
            Committee worked together as one during the whole process. We
            had a state-of-the-art Nextel phone radio system where we could
            communicate with each other, with the one thousand out of town
            operators and deal with transit issues as they arose.
              3. We empowered people to be able to make decisions: We
            assigned location captains and staff to separate locations
            around Salt Lake City and empowered them to make decisions on
            the spot in the field. For example, a lower level UTA employee
            could out rank me on a park and ride lot that they controlled.
              4. We had experienced, high-quality operators as I have
            previously mentioned who could handle surprises without
            difficulty. Remarkably, we had only 2 minor accidents during
            this period of time.
              5. Finally, we were able to receive the bus and light rail
            equipment in time to check out each vehicle to make sure it
            could handle the altitude and was reliable transportation.

        We moved over four million people during the Olympics. On our peak
    day, Mr. Chairman, our light rail system carried an incredible 144,000
    people.
        There were public opinion surveys taken during the Olympics. They
    revealed that 92 percent of the visitors and local residents thought
    transportation was going better than expected and 94 percent said that
    they had a good to excellent experience.
        We had no serious security problems but were prepared to handle
    them if they had occurred.
        In summary, there was a USA Today article and quote that summarizes
    some of the pride we feel in Utah today. The article stated, referring
    to Utah: ``The little city that could, did!''
        Mr. Chairman, this concludes my statement and I am happy to respond
    to any questions that the Committee may have for me.

     RESPONSE TO WRITTEN QUESTIONS OF SENATOR REED FROM NORMAN Y.
                                 MINETA

    Q.1. Mr. Secretary, what do you see as the greatest challenge
    facing our Nation's transit systems?

    A.1. Since 1993 the Nation's use of public transportation has
    increased nearly 28 percent, the fastest rate of growth amongst
    all forms of surface transportation. Most recently, our
    preliminary estimates indicate that over 9.6 billion trips were
    taken by public transit in 2001, an increase of 2 percent over
    2000. Notwithstanding the record levels of Federal, State, and
    local investment in vehicles, bus and rail maintenance
    facilities, track, and stations, our transit systems face an
    enormous challenge in coping with this substantial growth in
    ridership. Specifically, the Department's most recent Condition
    and Performance Report (1999) projects an annual capital
    funding need for public transportation of $17.4 billion (in
    2002 dollars) to improve the condition of each type of major
    asset to at least a level of ``good'' and to improve
    performance by increasing nationwide operating speeds and
    reducing nationwide occupancy rates. The greatest investment
    requirements are for vehicles and fixed guideway elements, such
    as tracks, tunnels, and bridges. Thus, there is a strong
    relationship between projected ridership growth and the amount
    of capital needed for investment in transit infrastructure to
    accommodate that growth.
        The Department expects to release the 2001 Condition and
    Performance Report in early September 2002. The estimated
    annual amount needed to improve conditions and performance of
    the Nation's transit systems is likely to rise, given the
    increases in transit service levels and usage since issuance of
    the last report.

    Q.2. Mr. Secretary, in the wake of September 11 can you give us
    an understanding of what the new Transportation Security
    Administration is doing in the area of transit security? How
    much of TSA's funding and staffing are dedicated to transit?

    A.2. The responsibilities for transit security will remain
    within the Federal Transit Administration (FTA). The
    Transportation Security Administration (TSA) will provide
    direction and guidance for FTA's security activities. TSA staff
    will work with FTA to ensure effective communication and
    coordination between the two administrations.
        In addition, let me please note the five-part security
    initiative FTA has undertaken in the wake of September 11 to
    enhance the security of the Nation's public transportation
    systems. This initiative will be funded with fiscal year 2002
    appropriations and $18.7 million in emergency supplemental
    funding. This initiative is comprised of the following specific
    activities:

              (a) Assessments: FTA has completed 11 of 33 scheduled
            security assessments of large transit agencies. Chosen
            because of their high ridership levels, the inherent
            vulnerability of subway systems, and the potentially
            serious consequences of a successful terrorist attack,
            these 33 transit agencies are voluntarily participating
            in the assessment program. Each assessment is conducted
            by a professional team of antiterrorism, transit
            operations, and emergency response experts, and
            includes a threat and vulnerability analysis, an
            evaluation of the security and emergency response
            plans, and a focused review of the agency's unified
            command structure with external emergency responders.
              (b) Emergency Response Planning: Based on the
            assessment findings, FTA is assisting agencies in
            evaluating and in updating their emergency response
            plans. These plans serve as a blueprint for action in
            the wake of an attack, and articulate who will take the
            specific steps necessary during an emergency response.
              (c) Emergency Response Drills: It is critical that
            emergency response plans and any new equipment that may
            be acquired be tested in full-scale drills. FTA will
            provide assistance and partial funding for such drills,
            as needs are determined by the assessments.
              (d) Security Training: FTA is expanding its free
            security and emergency response training to incorporate
            new security strategies and tactics, and will be
            offering regional security workshops to give more local
            transit managers the opportunity to attend. The
            workshops are scheduled to start in April, and will
            include transit managers, fire and police, and
            municipal emergency operations management personnel. In
            addition, FTA has expanded the scope of the National
            Transit Institute Safety Training Program to include a
            series of security courses to educate transit workers
            on how to identify and respond to potential explosive,
            chemical agent, and biological agent incidents.
              (e) Research and Development: FTA has committed $2
            million of fiscal year 2002 research funding to
            security-
            related transit research under the auspices of the
            Transit Cooperative Research Program of the National
            Academy of Sciences. With $4 million in emergency
            supplemental funding, the Department is also
            accelerating the PROTECT (Program for Response Options
            and Technology Enhancements for Chemical Terrorism)
            program in collaboration with the Department of Energy
            and the National Institute of Justice, in addition to
            pursuing other research for enhanced security
            technology applicable to the transit environment.
            Project PROTECT is being piloted in Washington DC.

        Let me note, also, that in the wake of September 11, FTA
    immediately compiled and mailed security toolkits to more than
    600 transit agencies across the Nation. These kits included
    security assessment and emergency response planning tools, an
    FTA resource guide, and information on security-related
    opportunities being offered in fiscal year 2002. An additional
    400 toolkits have since been distributed, and demand continues.
    Moreover, FTA has recently developed guidelines for the
    handling of chemical and biological incidents in subways to
    serve as a blueprint for emergency response planning.
        Last, the FTA has refocused certain fiscal year 2002
    funding to improve the Transit Safety and Security Reporting
    Module of the National Transit Database, identify technological
    options for a nationwide Transit Emergency Notification System,
    and develop and implement the Model Bus Safety and Security
    Program. Salt Lake City was used as a test bed for the security
    module of the Bus Safety Program in preparation for the 2002
    Winter Olympic Games.
        Indeed, public transportation agencies across the Nation
    have stepped up their own security efforts in the wake of the
    September 11 attacks. Their efforts typically include
    increasing the number of security personnel and/or police in
    stations and on transit vehicles, purchasing protective
    equipment for transit personnel who will be the first to
    respond to emergencies, removing trash receptacles in which
    bombs could be placed, providing emergency response training to
    employees, and reminding riders and the general public how they
    can help with regard to security. FTA is an active participant
    in the American Public Transportation Association's security
    task force, and a co-sponsor of a security workshop for the
    large transit agencies.

     RESPONSE TO WRITTEN QUESTIONS OF SENATOR GRAMM FROM NORMAN Y.
                                 MINETA

    Q.1. Several Members of the Committee have expressed concern
    about a March 6, 2002, article in the Boston Herald entitled
    ``MBTA Launches Bidding Process for Commuter Lines'' that
    details the efforts of the Massachusetts Bay Transit Authority
    to rebid a commuter rail contract. This contract was the
    subject of two prior hearings before the Committee and
    continues to be a source of concern. According to the report,
    the new contract specifications dictate that the winning bidder
    must retain all current employees and must adopt existing wage
    and benefit structures,
    although there is no precedent for such an action. The costs
    associated with such an action would be quite significant and
    would certainly erect a major impediment to competing the
    contract.
        Please let the Committee know what actions the Federal
    Transit Administration has taken and will take to ensure that
    the taxpayer dollars spent to support this contract are used in
    accordance with existing statute and regulatory guidance.

    A.1. FTA takes numerous actions to ensure that all recipients
    of taxpayer dollars, in the form of FTA grant funds, comply
    with all applicable Federal statutory and regulatory
    requirements and certify to FTA each year that they will
    continue to do so. To monitor grantees' compliance with Federal
    requirements, FTA employs a number of means, including
    Triennial, Planning, Financial Management, Procurement Systems,
    Safety Systems, and Civil Rights compliance reviews, carried
    out under the 49 U.S.C. Sec. 5327 Project Management Oversight
    Program, as well as regularly scheduled site visits, progress
    reporting, and related activities. All of these activities have
    been taken, and will continue to be taken, to ensure the MBTA's
    compliance with our requirements.
        FTA does not, however, have jurisdiction over all Federal
    statutory and regulatory requirements affecting FTA grant
    funds. Specifically, the authority over one labor provision of
    Federal transit law, 49 U.S.C. Section 5333(b), is expressly
    reserved by the statute to the Secretary of Labor (DOL), and
    the provision specifies that FTA grant awards are subject to
    DOL's certification that certain labor arrangements are in
    place. The newspaper article providing background to this
    inquiry speaks to the MBTA's bidding process being in
    compliance with current DOL policy guiding its implementation
    of the requirements of 49 U.S.C. Sec. 5333(b). While the FTA
    cannot exercise jurisdiction over DOL policy, FTA notes that
    the MBTA is currently expending FTA grant funds in accordance
    with all relevant statutory and regulatory requirements and DOL
    policies issued pursuant to those requirements.

    Q.2. I am encouraged that the Federal Transit Administration
    plans to conduct an international symposium on the benefits of
    competitive contracting in the rail industry. As we continue to
    learn more about successes in other countries, what are some
    specific areas where you think competitive contracting might
    improve transit services and provide cost savings?

    A.2. Several nations, including the United States, are
    experiment-
    ing with a variety of innovative procurement techniques for
    planning, financing, building, and operating rail passenger
    systems. Particularly promising are variations in public-
    private partnerships reflecting differing mixes of public and
    private responsibility for elements such as financing, design
    and construction, risk management, and operation, using design-
    build methods of competitive contracting.

    Q.3. The Federal Transit Administration, under the leadership
    of Jennifer Dorn, has recently reinvigorated the Coordinating
    Council whose mission is to make recommendations for
    coordination and consolidation of transportation programs
    operated through the Department of Health and Human Services
    and DOT. However, I am interested in hearing about the
    continued progress of the Council and their attempt to achieve
    their strategic plan.
        As the Committee continues to identify areas that should be

    addressed in the reauthorization of TEA-21, what modifications
    to existing law might the Administration suggest that would
    improve coordination of transportation services--particularly
    transportation to access health care for children?

    A.3. The Coordination Council strategy to foster improved
    coordination of transportation services funded by DOT and HHS
    programs focuses on three specific objectives. First, to
    identify and remove impediments occasioned by Federal program
    requirements and actions that may make transportation
    coordination more difficult. Second, to provide information,
    technical assistance, and guidance on how to effectively
    coordinate State and locally administered human service
    transportation programs. Third, to encourage States to take
    effective policy actions to promote human service
    transportation coordination within the programs they
    administer.
        Most recently, FTA, working together with the Department of
    Health and Human Services (HHS), has developed an Action Plan
    for 2002 to guide Federal human service transportation
    coordination efforts and to ensure more accountability.
    Important components of this Action Plan are the completion of
    a Transportation Planning Tool Kit, including best practices
    and case studies; an improved coordination website; and the
    dissemination of information on how ITS technology can aid
    coordination activities. From experience, FTA and HHS recognize
    that the availability of successful examples and good
    information can be a positive influence for State and local
    officials in their efforts to coordinate their transportation
    strategies.
        Moreover, since a significant amount of Federal funding is
    provided for Medicaid transportation, FTA and HHS will continue
    to promote both the Medicaid Transit Pass Option and State-
    sponsored Medicaid and Human Service Transportation Brokerages.
    We have seen a good many constructive results for localities in
    their expansion of transportation services and reduction of
    costs through pass programs and brokerages.
        Additionally, FTA and HHS are working with the National
    Governors Association, public interest groups, and human
    service and transportation providers to inform their
    constituencies about the benefits of coordinated transit and
    human services transportation systems; continue our dialogue on
    the impediments to coordinated service delivery; and establish
    coordination performance measures to better gauge the progress
    we are making.
        Finally, with several Federal transportation and human
    services programs scheduled for reauthorization, including TEA-
    21, FTA and HHS are soliciting suggestions from State and local
    officials and other interested parties on potential legislative
    initiatives that would promote the coordination of services
    across programs. We are very aware of the critical role that
    transportation plays in insuring health care for large segments
    of the population, and especially for children and the elderly.
    Following DOT's public outreach for TEA-21 reauthorization this
    year, the Administration's proposal for reauthorization of the
    Federal transit programs will address these subjects.

     RESPONSE TO WRITTEN QUESTION OF SENATOR REED FROM WILLIAM W.
                                 MILLAR

    Q.1. Mr. Millar, in listening to your testimony, one consistent
    theme has been the great demand for transit across the country,
    what is the greatest challenge to meeting this demand and if it
    is resources how does APTA propose to generate them?

    A.1. There is significant demand for transit across the
    country. Over the last 6 years, transit usage has grown faster
    than the population (4.5 percent), highway use (11.8 percent),
    and domestic air travel (12 percent).
        The strong growth in transit ridership is sending a message
    loud and clear: people are leaving their cars at home and using
    public transportation more and more. Now more than ever,
    steadily growing congestion is causing people to seek
    alternative forms of transportation to commute to work,
    complete errands, make health care visits, and to get to and
    from sports and entertainment events.
        But as new systems open doors and existing systems expand
    their service, demand is exceeding the speed at which new
    service can be funded and implemented. Clearly, the biggest
    challenge in meeting this demand is providing the additional
    investment needed to maintain existing infrastructure, expand
    core transit system capacities, and to build new systems.
        In that regard, APTA has developed a Transit Needs
    Synthesis Report, which summarizes and makes projections based
    upon the estimates of transit capital needs studies conducted
    by APTA, the Federal Transit Administration (FTA), and the
    Community Transit Association of America (CTAA). Based on our
    report, preliminary estimated total transit industry capital
    needs from fiscal year 2004 through fiscal year 2009 will be
    $253 billion. This is an average of $42 billion per year, in
    fiscal year 2003 dollars.
        Our membership is still working on the details of our
    reauthorization proposal, including how to generate the Federal
    resources needed to address transit is strong growth. But given
    that the Federal transit program is supported by a combination
    of Federal gas tax and general fund resources from the Federal
    budget, it seems likely that, absent an increase in the gas
    tax, general fund budgetary resources would have to be
    increased to meet the demand for additional transit capital
    improvements.

       RESPONSE TO WRITTEN QUESTION OF SENATOR REED FROM DALE J.
                                MARSICO

    Q.1. How would your organization propose we find the resources
    so we can continue the success of TEA-21?

    A.1. Today, the MTA of the Highway Trust Fund makes up a
    significant portion of the current program, with a small amount
    from general revenue funding. Our proposal envisions a more
    balanced and diversified approach to transit investment. We
    propose building on this foundation and creating a mix of trust
    fund, general fund, and tax credit investment to meet the
    expanding need for public and community transportation
    alternatives for all Americans. This proposal envisions
    continuing local contributions in the form of matching funds as
    consistent with the ratios found in current law. During the
    life of our proposed reauthorization Federal investment rises
    from $13.9 billion in the first year of the new reauthorization
    to $25.5 billion in fiscal year 2009, 6 years later. We propose
    splitting these amounts roughly in thirds, with the MTA of the
    Highway Trust Funds paying approximately $5 billion in the
    first year, an equal amount from General Revenue of $5 billion
    during the same period and approximately $3.9 billion in
    transit tax credits which brings us up to the $13.9 billion
    total for our fiscal year 2004 projection. Based upon the final
    year of the current authorization, neither the amount from
    General Revenue or the Mass Transit Account is dramatically
    different from the current path forecast in TEA-21 as revenue
    sources for transit.
        The most significant departure from the current program
    funding involves an innovative use of tax credits to finance
    mobility growth and expansion. Tax credits are a proven,
    effective model for public-private partnerships; more than 30
    major tax credit and tax-
    exempt bond programs currently exist, generating more than $300
    billion a year to the national economy. Two related initiatives
    are excellent models for transit experimentation with tax
    credits. Amtrak currently has plans for tax-credit financing,
    under consideration by both the House and Senate. Before his
    Administration left office, then-President Clinton created the
    New Markets Tax Credit Program of more than $25 billion to
    address economic development in low-income communities. We
    envision transit tax credits as a way to finance capital-
    intensive projects, such as rail-related transit projects,
    buses and bus facilities, as well as other important transit
    capital investments.
        Besides tax credits, our proposal continues to utilize the
    Mass Transit Account of the Highway Trust Fund to finance part
    of America's investment in the future of public and community
    transit. We project small but steady growth in transit revenue
    over the life of the next reauthorization. Trust funds and tax
    credits alone cannot meet all the Federal investment
    requirements for a truly national public and community transit
    program. Our proposal calls for providing general funds from
    the Federal budget to enhance national transit activities.
    Addressing the lack of services in rural America, air quality
    issues, congested highways, and guaranteeing access for
    America's seniors are important priorities for national
    financing whether through trust funds, tax credits, or general
    funds.

                                PERSPECTIVES ON

                            AMERICA'S TRANSIT NEEDS

                                  ----------

                            TUESDAY, OCTOBER 8, 2002

                                           U.S. Senate,
              Committee on Banking, Housing, and Urban Affairs,
                                                        Washington, DC.

        The Committee met at 10:07 a.m. in room SD-538 of the
    Dirksen Senate Office Building, Senator Paul S. Sarbanes
    (Chairman of the Committee) presiding.

             OPENING STATEMENT OF CHAIRMAN PAUL S. SARBANES

        Chairman Sarbanes. Let me call the hearing to order.
        This morning, the Committee on Banking, Housing, and Urban
    Affairs meets to continue its consideration of the Federal
    transit programs in preparation for next year's reauthorization
    of the Transportation Equity Act for the 21st Century,
    colloquially known as TEA-21.
        This hearing follows on the heels of the excellent series
    of hearings that have been held on the transit issue by our
    Housing and Transportation Subcommittee, chaired by Senator
    Reed of Rhode Island, working together with Senator Allard.
        I commend them on the record they have laid and look
    forward to working with them and all of my colleagues on the
    Committee as we move forward with the reauthorization process.
        At our earlier hearings, a variety of witnesses testified,
    including Secretary of Transportation Mineta, Federal Transit
    Administrator Jenna Dorn, who is joining us again today,
    representatives of transit agencies from around the country,
    mayors, business leaders, environmentalists, and transit
    riders.
        I think the overwhelming point made in the testimony of
    these witnesses has been that TEA-21 has worked, that it
    significantly increased our commitment to transit, and that
    this investment is paying off in terms of increased ridership,
    economic return, and improved quality of life.
        As Administrator Dorn testified in April of this year
    regarding the impact of TEA-21's investment on transit
    ridership: ``Transit has experienced the highest percentage of
    ridership growth among all modes of surface transportation,
    growing over 28 percent between 1993 and 2001. Over the last 6
    years, transit use has grown faster than the population, and
    more than double the rate of domestic air and road travel,
    which grew approximately 12 percent.''
        TEA-21's investment has also engendered significant
    economic return. In testimony last June, Hank Dittmar of the
    Surface Transportation Policy Project, presented evidence that
    the new DART system in the Dallas region has generated over
    $800 million in development already, and that the full system
    is projected to generate $3.7 billion in economic activity when
    it is finally built out.
        Moreover, we heard testimony from individual businesses
    which recognize that transit produces positive economic
    returns.
        Herschel Abbott of Bell South testified that his company
    had recently chosen to consolidate its widely spread suburban
    office locations into three downtown Atlanta locations. Mr.
    Abbott noted that after these moves, ``approximately 85 percent
    of Bell South's employees in Metro Atlanta will be working
    within walking distance of a rail line.'' And he went on to say
    that this is ``a plan that makes good business sense.''
        Of course, transit is about more than our economic life. It
    is also about our quality of life, as Mrs. Lavada DeSalles from
    AARP testified in July: ``From our research, we know that
    mobility is a critical element of overall life satisfaction and
    is strongly linked to feelings of independence.''
        Several of our witnesses observed that the increased
    investment in transit and paratransit services under TEA-21 has
    provided the crucial link between home and a job, school, or
    doctor's office, for millions of people who otherwise might not
    have been able to participate fully.
        But we also heard that these successes were bringing new
    challenges. Communities across the country realize that transit
    offers a solution to many of the difficult problems facing
    them--moving people from welfare to work, alleviating
    congestion, reducing energy consumption, and safeguarding the
    environment.
        As we will hear today, State and local governments have
    increased transit funding at an even faster rate than the
    Federal Government, and the demand continues to grow.
        It is becoming, I believe, increasingly clear that we will
    have to markedly step up Federal support for transit to help
    local communities make the investment in infrastructure and
    system preservation that will be required as we move into the
    next century.
        We are very fortunate this morning in having the Federal
    Transit Administrator as our lead-off witness. She will be
    followed by a panel, and I will introduce the panel when we get
    to them.
        We are very pleased that Administrator Dorn is with us
    today. As I understand it, she will be presenting the
    Department's most recent estimates of the cost of maintaining
    and improving our transit systems.
        I want to commend the Administrator for her leadership in
    developing the Federal Transit Administration's response to the
    events of September 11. Those tragic attacks showed us, on the
    one hand, the vital role that public transportation can play in
    emergency situations, while at the same time raising our
    awareness of the need for increased security of the systems
    themselves. And I know that is an issue that she has been
    paying a great deal of attention to.
        Ms. Administrator, we are pleased to have you back before
    the Committee, and before I turn to you for your statement, I
    will yield to my colleagues for their opening statements.
        First, to Senator Reed. I mentioned before you arrived,
    Senator Reed, the work that the Subcommittee which you chair,
    the Housing and Transportation Subcommittee, has been doing in
    this area and the very important contribution it has made to
    the work of the Committee, and we appreciate that very much.
        Senator Reed.

                     STATEMENT OF SENATOR JACK REED

        Senator Reed. Thank you very much, Mr. Chairman. And I want
    to welcome Administrator Dorn and compliment and commend her on
    her efforts.
        The release of this report could not come at a more
    important time. With the Administration developing its TEA-21
    authorization proposal, I can think of no more vital
    information for the FTA, DOT, and OMB's analysis than this
    report.
        After reviewing it, one can reach only one conclusion--
    unless we can continue our significant investment in transit,
    the great gains in ridership and all its attendant benefits are
    in serious jeopardy.
        The report highlights what the Members of my Subcommittee
    have heard from every witness at our hearing. The American
    public uses and supports transit. They understand that a
    balanced transportation policy helps to preserve and expand our
    society's mobility and economy.
        However, this report also highlights the immense challenge
    facing our Nation's transit systems, a critical need for
    investment in transit. Indeed, according to the Department of
    Transportation's analysis, we need an annual investment of $14
    billion just to maintain the system we have in place, never
    mind the great interest of cities like Denver, Phoenix, and
    Dallas in new transit service.
        For comparison's sake, total Federal, State, and local
    capital investment in 2000 was roughly just $9 billion. This
    investment gap is the greatest challenge facing advocates of
    the balance in national transportation policy, and it is the
    most important issue facing the Members of this Committee as we
    prepare to reauthorize TEA-21.
        I look forward to the witnesses' testimony and I would hope
    that this report will guide the Administration's thinking on
    its reauthorization proposal.
        Finally, Mr. Chairman, one of the things that was evident
    to me in our hearing is that if you do not continue to invest
    in transit that will it get worse, it doesn't just stay the
    same. So the challenge we face is not simply trying to hold the
    line, but we need to add more resources.
        And the other point that emerged is, that when transit is
    reliable, attractive, and convenient, people use it. And when
    it is not well maintained, they do not.
        So our challenge is not simply to maintain the status quo,
    but to find ways in which we can continue this resurgence and
    revival of transit.
        Thank you, Mr. Chairman.
        Chairman Sarbanes. Good. Thank you, Senator Reed.
        Senator Corzine.

                   COMMENTS OF SENATOR JON S. CORZINE

        Senator Corzine. Thank you, Mr. Chairman. I have a formal
    statement that I would put in the record.
        I must say that this is a truly vital element of discussion
    for our Nation. As I know Ms. Dorn understands, New Jersey has
    the third largest mass transit system in the country. It has
    great impact on our economic life, a quality of life with
    regard to congestion and environmental conditions.
        Obviously, this is not just a New Jersey issue, it is a
    national issue. The kind of considerations that Senator Reed
    just mentioned with regard to if we do not step forward, we
    actually take double steps backward because of maintenance and
    quality of service.
        I hope that your report and the framing of the need for
    investment in our mass transit system will ring true if my
    colleagues both here in our Committee, but across the Congress,
    because it is absolutely vital to our national and economic
    security of our Nation. I am pleased to be a part of it and I
    look forward to the testimony and also moving forward with
    reauthorization of TEA-21 in a way that supports mass transit.
        Chairman Sarbanes. Thank you very much, Senator Corzine.
        Administrator Dorn, we would be happy to hear from you.

                     STATEMENT OF JENNIFER L. DORN

             ADMINISTRATOR, FEDERAL TRANSIT ADMINISTRATION

                   U.S. DEPARTMENT OF TRANSPORTATION

        Administrator Dorn. Thank you, Mr. Chairman.
        Chairman Sarbanes. I think if you pull that closer to you,
    it would help. You have to really speak right into it.
        Administrator Dorn. Okay. Great. Thank you very much.
        I appreciate the opportunity to testify before you and
    wanted to make one comment in addition to wholehearted
    agreement with all of the speakers today that transit
    investment is a very important investment for our Nation's
    communities.
        I wanted to mention the issue of security, and mention that
    it has been the strong partnership with the transit industry
    and State and local officials, including fire, police, and
    emergency responders, that has allowed transit to play an even
    more important role in emergency response and planning. So that
    effort has been a very important collaborative effort, of which
    I am very proud.
        Thank you for the opportunity to testify today on something
    more specific, and that is the conditions and performance of
    our Nation's public transportation infrastructure. My
    testimony, as you mentioned, draws upon the key findings of the
    2002 Conditions and Performance Report.
        I am pleased to report that record levels of investment in
    transit by Federal, State, and local governments have improved
    transit conditions and increased transit capacity and
    utilization in America. That is very good news. Between 1990
    and 2000, total transit capital investment spending doubled,
    from $4.5 billion to $9.1 billion. The pace of growth in State
    and local spending increased the State and local share
    considerably, from 42 percent to 53 percent during that decade,
    as the Chairman mentioned. So in spite of the fact that the
    Federal Government's pace of investment increased, the State
    and local investment even outpaced that growth.
        These increased investments at all levels of government
    reflect a growing recognition of public transportation's
    benefits to our communities and to our Nation. Public
    transportation, as you mentioned, is an essential thread in the
    fabric of American life, resulting in greater personal freedom,
    enhancing the economic vitality of our communities, and making
    our Nation safer and healthier.
        ISTEA and TEA-21 have played an important role in
    maintaining and improving the condition and performance of
    America's transit systems. This, in turn, has played an
    important role in attracting passengers to transit and it is
    the point that has been made by all three distinguished Members
    of the Committee.
        Moreover, public transportation is a key component of our
    Nation's emergency response and evacuation plans in the event
    of a natural disaster or terrorist incident.
        I would like to provide a brief overview of the state of
    transit assets and operations and make a comment on the short-
    term investment needs, as well as the implications of increased
    investments in transit.
        The growth in capital investment under ISTEA and TEA-21 has
    resulted in a significant expansion of the Nation's transit
    infrastructure, particularly rail. New and modernized transit
    vehicles and facilities have prompted a dramatic increase in
    transit use. As has been mentioned, we have seen an increase in
    the number of passenger miles traveled over the decade by 12.2
    percent, and certainly over the last few years, a doubling of
    even that.
        Increased capital investments have also reversed the
    decline in the physical condition of transit vehicles and
    slowed the deterioration of bus and rail facilities. Vehicle
    conditions, according to the report, remained relatively
    constant between 1997 and 2000, indicating that recent
    investments supported by ISTEA and TEA-21 were sufficient to
    maintain conditions.
        The Conditions and Performance Report provides an estimate
    of the investment level that will keep future indicators of
    public transit conditions and performance at the current
    levels, as well as the investment level projected that will
    improve transit. The investment requirements identified are for
    all levels of government, so the report does not make a
    distinction as to the appropriate share--Federal, State,
    local--for this investment, but rather, a collective investment
    by all the sectors.
        The report does not address the policy question of what the
    relative investment share should be, as I mentioned. And in
    addition, the Conditions and Performance Report makes long-term
    projections of investment needs and reports a single ``average
    annual'' investment requirement for the entire 20-year period.
    As you know, Mr. Chairman, the amount of transit infrastructure
    to be maintained will grow over that period as new investments
    are made. Thus, in the near-term, the estimated investment
    needs are measurably lower than the projected investment needs
    in the out-years.
        So, we can take a 20-year horizon or a shorter period
    horizon, and in the near-term, those investment needs will be
    smaller than in the long-term. Now the cost to maintain transit
    over the 20-year horizon is $14.8 billion per year. This
    represents the estimated average annual capital cost for the
    20-year period from 2001 to 2021, from all sources--Federal,
    State, and local governments. This investment would allow
    transit to keep conditions and service quality at current
    levels, while growing ridership at the modest 1.6 percent per
    year average rate, which has been the estimate made by the 33
    Metropolitan Planning Organizations in their long-range plans.
    Now in order to improve transit over that 20-year horizon, it
    is estimated that the average annual contribution or investment
    of all the sectors would be $20.6 billion per year.
        I would like to emphasize that through 2003, current
    estimated expenditures are projected to be sufficient not only
    to maintain conditions and performance, but also to begin
    addressing the backlog of investment needs as well. We will be
    able to improve transit conditions and performance. The
    President's proposed budget in 2002, as well as 2003, combined
    with the projected spending by State and local governments,
    will put us well above the requirement for maintenance, and
    will do a great deal toward improving the system, which is very
    good news.
        As I mentioned, in the last decade, total transit capital
    investment spending doubled. During this time, the Federal
    investment in transit capital increased by an impressive 62
    percent, while local spending increased even more dramatically,
    tripling over the decade. By 2000, combined State and local
    funding capital investments in transit represented over half of
    the Nation's total capital spending in transit. The growth in
    local capital investment is particularly impressive in light of
    the fact that beginning in 1998, Federal formula funds could
    not be used for operating expenses in areas with populations
    over 200,000.
        The notable increased investment at all levels signals the
    public's awareness of transit's value. Communities throughout
    America, as you have stated, Mr. Chairman, recognize that their
    investment in transit is more than repaid in economic growth,
    increased mobility, and an enhanced quality of life.
        In summary, America's investment in public transportation
    is reaping substantial benefits. We continue to make progress
    in the conditions and performance of our transit assets.
        Mr. Chairman, Members of the Committee, this concludes my
    formal statement. I would be happy to answer questions.
        Chairman Sarbanes. Would you pick up on the Federal share
    that is in your statement? I want to hear your position on
    that.
        Administrator Dorn. The overall Federal share.
        Chairman Sarbanes. It is right at the end of your
    statement.
        Administrator Dorn. You mean the share of the Federal
    investment vis-a-vis the State and local investment?
        The State and local investment has increased from 42
    percent to 53 percent of the overall spending.
        Chairman Sarbanes. I would like you to go to the paragraph
    in your statement just before the conclusion.
        Administrator Dorn. In my written statement?
        Chairman Sarbanes. Yes.
        Administrator Dorn. Okay. Let me just get that.
        [Pause.]
        Is that near the middle of the statement?
        Chairman Sarbanes. It is the second to last paragraph of
    the statement submitted to the Committee.
        [Pause.]
        Administrator Dorn. You are talking about New Starts
    issues. I apologize. And what aspect of that?
        Chairman Sarbanes. Why don't you just give us that
    statement? Then we can key our questions off of that.
        Administrator Dorn. Fine. In my formal statement, I said:
    As you know, one important source of funds for new transit
    capital investment projects is Section 5309 ``New Starts''
    program. In 2000, $0.98 billion was invested by the Federal
    Government through this program. In 2003, the President has
    proposed spending $1.21 billion on New Starts. The President
    has also proposed a 50 percent cap on the Federal match for
    such projects. This proposal reflects not only the willingness
    of communities to share equally in transit investments, but
    also the hard reality that more and more communities will be
    seeking such funds in the future. We believe that this proposal
    will not only permit scarce Federal resources to help more
    communities, but will also recognize and reward communities
    that embrace transit as a vital part of their community.
        Chairman Sarbanes. Does the Administration support lowering
    the cap for highway projects? Currently, it is an 80/20 match.
    Is that correct?
        Administrator Dorn. For highway projects.
        Chairman Sarbanes. And for transit.
        Administrator Dorn. And for transit.
        Chairman Sarbanes. In each instance, 80/20.
        Administrator Dorn. That is correct.
        Chairman Sarbanes. So currently, the Federal Government
    puts up 80 percent of the capital cost and the localities put
    up 20 percent, whether it is a highway project or a transit
    project. Is that correct?
        Administrator Dorn. That is correct.
        Chairman Sarbanes. Now, you are proposing here to lower the
    Federal match to 50 percent for transit projects?
        Administrator Dorn. In the New Starts arena only, which
    less than 20 percent of the total. So under the
    Administration's proposal, more than 80 percent of our program
    would remain at the 80/20 match. It is only in the category of
    New Starts, major capital projects, where we would seek to have
    a 50/50 match.
        Chairman Sarbanes. Which projects would not have the 50/50
    match?
        Administrator Dorn. Everything other than New Starts, which
    would be fixed-rail modernization, bus, discretionary. So of
    the $7.2 billion, approximately 83 percent of that Federal
    expenditure, would be at the 80/20 match.
        We are saying, Mr. Chairman, that only for that portion,
    large capital grants for fixed guideways, which is less than 17
    percent of the budget, that would be at a 50/50 match.
        Chairman Sarbanes. Is there going to be a comparable 50/50
    match on comparable highway projects?
        Administrator Dorn. Well, let me just answer that by saying
    that, overall, in transit and in highways, the Federal match,
    if you count all of Federal spending in transit and highways,
    it is approximately at the 50 percent match for both, the
    practical application versus the statutory allowance.
        We do not believe that that is a problem.
        Chairman Sarbanes. I do not understand that statement. What
    do you mean by that?
        Administrator Dorn. Okay. The way the money is spent and
    allocated to State and local governments, in both transit and
    highways for capital projects, the match that actually occurs
    is less than 50 percent Federal, if you take the total capital
    investment that is made.
        So, whereas there is a permissiveness of being at 80
    percent for highways, the practical reality is the capital
    investments that the Federal Highway Administration makes is
    about 50 percent match. That is the same as in transit. In
    other words, we have the permission to do for New Starts, major
    capital programs, an 80/20 match. However, over the period of
    the last number of years, the average match has been, I think,
    51 or 52 percent Federal share.
        Chairman Sarbanes. For Federal transit?
        Administrator Dorn. For transit.
        Chairman Sarbanes. And you are asserting the same thing is
    the case for highways?
        Administrator Dorn. That is the information that I have
    been given, that both highways and transit, the overall capital
    expenditure for capital projects is less than 50 percent match.
        Chairman Sarbanes. You are going to change the matching
    formula on highways, then.
        Administrator Dorn. That is not currently in the proposal
    and to date, we have not perceived it to be a problem.
        If it is a problem, I would suggest that the solution is
    not to maintain the 80-percent share in transit, but to use
    other solutions.
        Chairman Sarbanes. Like what?
        Administrator Dorn. Like looking at all options, one would
    be reducing the highway discretionary capital grants to a 50/
    50. Now that is not an official position. That is a personal
    view, which is inappropriate for me to say. I just happen to
    believe it.
        Chairman Sarbanes. Do you perceive a problem if I am at the
    local level trying to make a decision on my transportation
    mode, and if I go one way, I get a 50/50 match, and if I go the
    other way, I get an 80/20 match?
        Administrator Dorn. There may be anecdotal examples of
    which I am not aware. However, in general, that has not
    appeared to be a problem.
        Chairman Sarbanes. It is not a problem now because they
    have the same matching figures, don't they?
        Administrator Dorn. At this point, that is correct.
        Chairman Sarbanes. Suppose you change that.
        Administrator Dorn. I do not believe that it would be a
    problem because one of the issues is that the transit community
    and the local decisionmakers recognize that they need to make
    the decision on the merits.
        They have chosen to use flexible funding options. They
    could get highway money. Instead, they get transit money. And
    there has been a very strong willingness to invest in transit
    because they know that their options for highway projects that
    will solve congestion are not really there.
        I am making the point, though, that is my firm belief that
    it is not a problem. However, if Congress, in its wisdom, and
    the Executive Branch, in its wisdom, believes it is a problem,
    I think the more appropriate solution is to address it from the
    other side, which is highway discretionary capital projects,
    because I believe that the State and local governments have
    clearly demonstrated they are willing to make investments. They
    have outpaced the growth of the Federal Government.
        And so, if you believe that kind of a level playing field
    is important at the local level in order to make unbiased
    decisions, then I would suggest other alternatives.
        I think that we need to spend Federal investment over a
    broader number of communities, rather than having this match at
    80 percent. I am concerned not only about the level of spending
    for transit, but also I want more communities to have transit.
    And I
    believe that if we are aggressive about an 80-percent match and
    if more and more communities take advantage of the 80-percent
    match, there will be fewer communities that have transit.
        So it is not just a question of how much. I am a strong
    advocate, and this Administration has supported increased
    investments in transit. We believe that we need to spread it
    over more communities and that the communities who give us the
    best projects are the ones that have a commitment, and they
    would be willing to make it.
        Chairman Sarbanes. Do you think you get an unbiased
    decision on the transportation mode if, by going down one path,
    you get an 80-percent Federal share, and if you go down the
    other path, you get a 50-percent Federal share? Do you regard
    that as presenting the local transportation decisionmakers with
    a level playing field, as we say, and an unbiased framework
    within which to make the determination?
        Administrator Dorn. Well, I believe that the merits,
    particularly in communities that understand everything from
    good land-use planning to reducing congestion and to increasing
    our ability to solve the air pollution problem, will go the way
    that they believe will solve those problems, irrespective of
    the match.
        However, I take your point.
        Chairman Sarbanes. So do you think you should throw into
    the scale, the additional weight of having to have a much
    larger local contribution?
        Administrator Dorn. I just think that the trade-offs
    between having fewer projects at 80 percent and a greater
    number of projects at 50 percent, I would err on the side of
    making sure that we are able to spread our dollars.
        Chairman Sarbanes. Doesn't the same rationale apply to
    highways? If you had a lower match, you could have more of
    those projects, too. And lots of communities want them. They
    are lined up as well.
        At the moment, I am not arguing the issue of the level of
    the match. We can come back and revisit that. I am arguing
    whether the level of the match should be the same for transit
    and for highway projects.
        Administrator Dorn. Well, I certainly believe that you
    raise a
    legitimate point and all solutions should be on the table.
        Chairman Sarbanes. Jon.
        Senator Corzine. Thank you, Mr. Chairman. I follow your
    logic. The extra resources certainly will have some impact in
    focusing where people put their priorities.
        I would like to go parochial a second.
        The Administration recently announced a $4\1/2\ billion
    rebuilding of the transportation infrastructure in lower
    Manhattan. And quite honestly, I am quite complimentary of
    everyone with regard to the flexibility that was allowed with
    that so that the footprint that was there prior to September 11
    is not necessarily the exact footprint that has to be rebuilt.
        I understand about, if I am not mistaken, $1.8 billion of
    the funds that are for that $4\1/2\ billion rebuilding project
    are from the FTA and, if I am not mistaken, $2\3/4\ billion
    from FEMA.
        It is also my understanding that there is a working group
    that is deciding how that money is going to be used and how it
    will be expended on projects--the City and State of New York,
    Metropolitan Transportation Authority, the Port Authority of
    New York, New Jersey, and the Lower Manhattan Development
    Corporation.
        As you can imagine, given that New Jersey has 200,000
    commuters a day coming in and out of New York City, given the
    impact of September 11 on the New Jersey community, there is
    some legitimate angst that the interests of New Jersey are not
    well represented in this working group that is looking at these
    projects.
        I am actually fairly concerned about this. I just would
    like to hear your impressions whether you would work to help us
    secure some greater representation from New Jersey's voice, not
    that the bulk of the funds or other things should not be
    considered, but the commuting patterns that support the economy
    of New York City and the rebuilding in this tragic area I think
    should legitimately consider that the Hudson River happens to
    be there.
        But the fact is that we are one metropolitan community.
    There is serious concern that New Jersey's entities are not
    having a voice--New Jersey Mass Transit, the transportation
    department, the Administration, and others. And then there are
    a number of projects that are specifically interlinking. We are
    fighting to have, and supportive of, the Olympics in New
    Jersey. But the reality is that a number of the venues would be
    interconnected.
        I use that only as an example. You take the commuters. You
    take the interconnectedness of the economic region and there is
    virtually no voice.
        So, I wonder, Administrator Dorn, if you would be willing
    to work to ensure that New Jersey has a greater voice in that,
    and are New Jersey proposals being considered in that process?
    Is it being done in an even-handed, level playing field basis?
        Administrator Dorn. Thank you, Senator, for the question.
    It is a very good one and a very important one.
        This Administration has a strong commitment with you and
    all of the delegation in that area, and with America, to help
    bring America and New York back.
        We believe very strongly in the Department of
    Transportation that local decisions should prevail. And in this
    instance, as in a growing number of instances across the
    country, local is in the eye of the beholder and it very often
    crosses jurisdictions that have been developed years ago. So
    bottom line is that I believe very strongly that the current
    committee has a bias toward making sure that this serves the
    community.
        Senator Corzine. The regional community?
        Administrator Dorn. The regional community. That is their
    goal, as has been expressed to us.
        I would be very eager to work with the FEMA Director, Joel
    Albaugh, and that committee in discussing other ways to make
    sure all representation that is relevant to bringing New York
    back is assured on that committee or any other decisionmaking
    body.
        So it is important that at the end of the day, when those
    decisions are made, that they are, to the largest degree
    possible, supported by the broad community that is going to
    both live in New York and equally as important, commute to New
    York from other jurisdictions.
        I just received your letter yesterday addressed to Mr.
    Albaugh and myself. I will be happy to talk with him and to
    talk with you and others to see how we could address this
    issue.
        Senator Corzine. It would be very much appreciated. I would
    be anxious to see the specifics of that and how it unfolds.
        Thank you.
        Chairman Sarbanes. I have a couple more questions I would
    like to ask the Administrator.
        The Conditions and Performance Report depends on
    projections of future ridership growth. Correct?
        Administrator Dorn. That is correct. It is one element that
    they use to produce the model. So that is correct.
        Chairman Sarbanes. I understand that your estimate of
    future ridership growth was based on an average of the growth
    projections prepared by the local Metropolitan Planning
    Organizations, and that gave you a figure of 1.6 percent.
        Administrator Dorn. That is correct.
        Chairman Sarbanes. How does that number compare with what
    we have actually seen over the last few years?
        Administrator Dorn. Well, certainly in the last couple of
    years, or actually, the last 6 years, we have seen a 28-percent
    growth, and in the last 10 years, a 12-percent growth. In the
    recent past, according to reports, there has been a decrease,
    probably due to the effects of September 11 and economic
    situations.
        So the overall projection of 1.6 percent by the MPO's,
    based on their long-term plans, we believe to be a reliable
    percent. Given that, I think that the 1.6 percent annual
    increase should not be our goal. It should be far greater than
    that, and there are many ways that we can increase ridership to
    make transportation an even greater benefit to the local
    community.
        Chairman Sarbanes. I am just trying to get a handle on how
    realistic that figure is, since you then base your Conditions
    and Performance Report on it. How do you square projecting 1.6
    percent out when you look back over the last decade at least
    and the figure is much higher than that?
        Administrator Dorn. As I understand it, when you project
    over a 20-year period, you get an average annual increase of
    1.6 percent.
        So just as you have a fairly dramatic difference between
    the last 6 years at 28 percent, and then when you take it over
    10 years, it is 12 percent. If you take it over 20 years, the
    1.6 percent, particularly when it is based on those who are
    making the local plans, we believe it is reliable.
        Now is any projection foolproof ?
        Chairman Sarbanes. What was it over the last 20 years?
        Administrator Dorn. Pardon me?
        Chairman Sarbanes. What was the figure over the last 20
    years?
        Administrator Dorn. I will have to check on that. I am not
    sure if we know that. Could we get back to you, either now, as
    we compute, or for the record?
        Chairman Sarbanes. But you are telling me that you do know
    that the figure over the last 10 years has been 12 percent. Is
    that correct?
        Administrator Dorn. That is correct.
        Chairman Sarbanes. So 12 percent.
        Administrator Dorn. Not per-year. That is an overall
    increase.
        What we are projecting is that every year in the 20-year
    horizon, we will see an average 1.6 percent growth.
        Chairman Sarbanes. Well, now, your Executive Summary says:
    ``The average annual growth rate, in PMT, of 1.6 percent used
    in this report is a weighted average of the most recent,
    primarily 2001 MPO forecast available from 33 metropolitan
    areas.''
        Administrator Dorn. Okay.
        Chairman Sarbanes. I am reading from your report: ``PMT
    increased at an average annual rate of 3.2 percent between 1993
    and 2000.'' And then you go on and you say, ``Varying the
    assumed rate of growth in PMT significantly affects estimated
    transit investment requirements,'' which I think is obvious,
    and that is the point we are trying to get at. And the point I
    am trying to get at is how realistic is it to project a 1.6
    percent average annual growth rate in PMT in light of what we
    have experienced in the period leading up to where we are now?
        Administrator Dorn. We believe it to be a reliable
    projection. No projection is foolproof. But based on the
    information that we have from the MPO's, that is what they
    collectively project.
        Chairman Sarbanes. You just took their figures and accepted
    them. Is that it?
        Administrator Dorn. That is correct. They are the ones that
    do the local planning----
        Chairman Sarbanes. Did anyone say to them, how can you give
    us these figures in light of what the increases have been over
    the last decade?
        Administrator Dorn. We looked at their long-range plans and
    as they plan to increase investments in transit, that would be
    reflected in the 1.6 percent projection.
        I am not saying that it is foolproof, but based on the
    experts that have analyzed these plans, that is what they
    project that they will be using.
        Chairman Sarbanes. Let's go at it a little more.
        Administrator Dorn. Okay.
        Chairman Sarbanes. How did you pick the 33 Metropolitan
    areas on which you base your figures?
        Administrator Dorn. I believe they were the largest that
    would have the greatest impact on the figures. So it was the 33
    largest Metropolitan Planning Organizations.
        Chairman Sarbanes. Are those all areas that currently have
    mass transit?
        Administrator Dorn. Yes, all of them do.
        Chairman Sarbanes. What about areas that want to get mass
    transit?
        Administrator Dorn. Well, I am not sure that that was a
    particular factor. However, those would be in much smaller
    areas that probably wouldn't have as great an effect on the
    ridership number. But I do not want to get beyond my expertise
    here and not be completely objective with you.
        I would suggest that, in terms of analyzing the adequacy of
    these projections, we need to take a look at other projections
    which may differ than the 1.6 percent, and the basis on which
    they made those calculations, which we would be happy to do.
        Chairman Sarbanes. It would help if you gave a submission
    to the Committee on your methodology in putting this together.
        Administrator Dorn. Certainly.
        Chairman Sarbanes. And just how realistic the 1.6 percent
    figure is. We may have a very substantial understatement of
    what is needed both in terms of maintenance and enhancement by
    the use of this figure. Obviously, if the figure were 3.2
    percent, as it has been, over the last 7 or 8 years, the need
    for the program would be substantially larger, would it not?
        Administrator Dorn. If that was the case, the need would be
    much larger.
        Chairman Sarbanes. Yes.
        Administrator Dorn. However, it is not necessarily a direct
    correlation between the need for greater investments and other
    things that we can do.
        And I would just like to say, Mr. Chairman, that is one of
    the reasons that the whole reauthorization piece is so
    important, that the planning component is terribly important in
    order to make sure that transit is utilized. The transit
    agencies need to do an even more valiant job in customer
    service, and improving the reliability, the immediacy, and the
    convenience that transit can provide.
        There are a number of important ways to increase ridership.
    And I wish that the projections were more pessimistic than
    reality, because I strongly believe that we need to increase
    ridership if we are going to solve some of the Nation's most
    important problems.
        So, I will be very happy to get back to you on our
    methodology and do whatever we can to review other assumptions
    which may say that we are off base.
        Chairman Sarbanes. I also want to understand what is being
    measured in the Conditions and Performance Report. The figures
    you cited of $14 billion to maintain and $20 billion to improve
    transit is conditions and performance, does that take into
    account rural transit needs?
        Administrator Dorn. Yes, it did, sir.
        Chairman Sarbanes. All right.
        Administrator Dorn. To just broaden that a little farther.
    The capital investment requirements, as I understand it, for
    rural operators are estimated to be about $241 million on an
    average annual basis in order to maintain. So, you can see that
    is just a very small, but I think critically important piece of
    the program. But because the expenditures are relatively small
    compared to the larger and largest metropolitan areas, it kind
    of gets lost in the discussion.
        I can assure you that the needs for rural transportation
    are not being lost in any discussion in the Administration
    about transit and its importance.
        Chairman Sarbanes. But those needs are encompassed within
    your projected figures?
        Administrator Dorn. Yes, sir.
        Chairman Sarbanes. Does your model include extensions of
    existing systems, as well as completely new systems that will
    begin operation sometime in the future?
        Administrator Dorn. Yes, they did, and they were factors in
    putting together the model. We would be happy to share the
    methodology with that as well.
        Chairman Sarbanes. And does your model take into account
    the increased security needs identified since September 11?
        Administrator Dorn. I do not believe that there was any
    specific activity that would identify security needs in this
    report.
        Chairman Sarbanes. Presumably, the report encompasses
    security needs. But I take it that answer means that you just
    did it on the basis of historical need and not what we are
    confronting now, post-September 11. Is that correct?
        Administrator Dorn. That is correct. And we did it in the
    context of safety and security in terms of analyzing the
    conditions and performance. But that was done in advance of the
    September 11 terrorist attack.
        Chairman Sarbanes. What is the position on guaranteed
    funding? Is the Administration committed to maintaining the
    budgetary firewalls that produce the guaranteed resources for
    transit? Do you want to sustain that arrangement in order to
    ensure guaranteed funding for the transit account?
        Administrator Dorn. The guaranteed funding commitment, in
    terms of the Administration's point of view, has been one of
    the key successes of ISTEA and TEA-21. Most importantly, in our
    view, it has leveraged State and local investments in transit
    and in transportation generally, and we would seek to retain
    that commitment for guaranteed funding.
        Chairman Sarbanes. Madam Administrator, thank you very
    much. We look forward to working very closely with you as we
    move ahead on this very important issue.
        Administrator Dorn. Thank you very much, Mr. Chairman. I
    appreciate it.
        Chairman Sarbanes. If the next panel would now come
    forward, we would be happy to hear from them.
        [Pause.]
        We will now turn to our second panel. We are very much
    looking forward to hearing from these witnesses. Let me just
    introduce the panel, and then we will go to them.
        Our first witness will be Mayor Patrick McCrory of
    Charlotte, North Carolina. Mayor McCrory has been a leader in
    improving public safety, transportation and land use in the
    city of Charlotte. He has been recognized nationally for his
    leadership in developing Charlotte's 25-year transportation
    plan and initiating pedestrian-friendly land-use policies.
        Our second witness is Mr. Eric Rodriguez, the Director of
    the Economic Mobility Initiative of the National Council of La
    Raza, a nonprofit organization established in 1968 to improve
    opportunities for Hispanic Americans. The National Council of
    La Raza reaches more than 3\1/2\ million Hispanics annually and
    Mr. Rodriguez is
    responsible for their programs relating to economic and
    financial security.
        Our third witness, David Winstead, has, I gather, been
    delayed. We may skip and come back. Ed Mortimer is here to do
    David's statement if he does not make it. So there is some time
    here, Ed, if he gets here. Mr. Winstead is the Chairman of the
    Transportation Coalition at the Maryland Chamber of Commerce
    and will be testifying on behalf of the U.S. Chamber of
    Commerce.
        Our fourth witness will be Wendell Cox, a Visiting Fellow
    with The Heritage Foundation and a Principal of the firm of
    Wendell Cox Consultancy. He has consulted for the U.S. DOT and
    other public agencies.
        Finally, we will hear from Secretary Roy Kienitz of the
    Maryland Department of Planning. Secretary Kienitz has served
    as Executive Director of the Surface Transportation Policy
    Project and was on the staff of Senator Moynihan with the
    Senate Committee on Environment and Public Works. He also has
    founded and chairs the Executive Committee of Smart Growth
    America.
        What we will do is hear from each of the panelists and then
    go to the question and answer period. I think that is probably
    the best way to proceed, and also, we may be able to get some
    back and forth amongst the panelists as well.
        Mayor McCrory, we are happy to hear from you. Welcome to
    the Committee.

                    STATEMENT OF PATRICK L. McCRORY

                    MAYOR, CHARLOTTE, NORTH CAROLINA

        Mr. McCrory. Thank you very much for the invitation,
    Chairman Sarbanes. I am actually wearing three hats.
        One is the Mayor of Charlotte, which I am proud to say is
    now the second-largest banking center in the United States of
    America, home of Bank of America and Wachovia.
        I am also the Environmental Chairman for the U.S.
    Conference of Mayors, and this, of course, is a very important
    subject as it relates to the environment.
        In addition, I am Chairman of the Republican Mayors and
    Elected Officials Association. I might add that this is a
    bipartisan issue and many of us feel very strongly that transit
    is a very important part of our future.
        I also want to say on behalf of all the cities that the
    major metropolitan areas are now the largest employers for our
    many citizens throughout the United States, for major
    transportation and trading hubs, and transit is an extremely
    important part of all metropolitan areas' future, including
    your great city of Baltimore.
        As I talk about Charlotte, some of the same stories can be
    repeated, whether you are in Phoenix, Dallas, Houston, or
    Denver, and the list goes on and on.
        Charlotte was the second fastest growing city in the
    1990's, with a 36-percent increase in its population. Our
    growth in vehicle miles has outpaced the population growth,
    causing incredible traffic congestion and air quality issues
    that threaten the quality of life and our continued economic
    growth and prosperity.
        The fact of the matter is Charlotte, like many cities
    throughout the United States in the 1960's, 1970's, 1980's, and
    1990's, did not think grow very well as the country had this
    tremendous growth. As we grew, we had corridors in which you
    could not distinguish whether you are in Dallas, Charlotte,
    Denver, or, for that fact, in Baltimore. And that is because we
    did not do good land-use planning. We did not do good transit
    planning; for that matter, we did not do very good road
    planning.
        We are convinced, and I think most mayors are convinced, in
    order to have a good transit system in the future, and a good
    city in the future, you also have to have good land-use
    planning.
        It is a combination of all three, which is vitally
    important as we spend very limited dollars that we all have on
    one of the highest priorities of every metropolitan city.
        I might add, in Charlotte, about 7 years ago, when I was
    elected Mayor of Charlotte, and I am in my fourth term now, we
    introduced a major corridor planning program, which is a
    comprehensive plan of transit, roads, buses, and land-use
    planning. We presented this to the voters of Charlotte and
    they, as a result of that plan, approved a half-cent sales tax
    by a 58-percent voter referendum, and we are very pleased to
    get that.
        As a result of that, we have further developed a five-
    corridor program, and we have several of those programs that
    are in front of your Committee and also in front of other
    committees throughout Congress. We have expanded light rail on
    the first rail. We are recommending plans which include an
    integrated approach between bus systems, light rail systems,
    and also busways.
        However, this does not just include transit planning. Part
    of our plan does include transit station development principles
    and joint development guidelines, pedestrian-friendly overlay
    districts, and we are also preparing stations with incredible
    economic opportunities around our stations, which we think will
    provide more jobs in the future for our citizens. We are also
    coordinating that with some environmental issues of brownfields
    and housing and making an integrated approach around other
    important subjects as it relates to our cities.
        This is not just happening in Charlotte. It is also
    happening with many of my peers from Ft. Worth, Seattle,
    Portland, and so forth.
        Our recommended system plan is to meet the tailored needs
    that exist in our corridors and utilize a mix of transit modes
    rather than one-size-fits-all approach.
        In Charlotte, our recommended system plan is estimated to
    cost $2.9 billion over 20 years, of which $1.9 billion is for
    rapid transit. Now in Charlotte, we are assuming 50 percent
    Federal funding for rapid transit projects. Even with this, we
    need $990 million from the FTA's New Start program.
        On behalf of all mayors, however, we do want to emphasize,
    we think there is a strong need to keep the program 80/20, as
    we do for other forms of transportation, including roads. That
    does send a strong message that transit is as important as our
    road network. And by the way, I feel very strongly that they
    should work parallel and integrated with each other.
        We are also counting on $643 million in FTA formula grants
    over the 20-plus years for capital improvement to maintain the
    other parts of the transit system. Our total need in Federal
    support over the period is just over $1.6 billion or 56 percent
    of the estimated total capital cost.
        We are not just seeking to build a transit system as an end
    in itself. We are trying to change how our community will grow
    and prosper in the future and protect our quality of life and
    our environment. And by doing this, we expect to cut down on
    the growth of VMT's, which will help us with our air quality
    programs and also provide greater access to our jobs and our
    educational opportunities. This is, by the way, very important
    to our banks so that we can get people to and from work in a
    reasonable amount of time, and to our other major manufacturing
    firms.
        It will also allow our community to sustain its growth and
    have a choice over congestion, and I think that is a point that
    is often not made. I know my critics get me on this item a lot
    about congestion. We are not planning to solve the congestion
    problems just through this. But we need to provide a choice for
    the consumer, and that is extremely important as we keep the
    economic vitality of all cities alive and thriving.
        I encourage this Committee to continue to provide Federal
    support that is predictable to help us develop multi-year
    investment plans and to take advantage of opportunities to
    leverage private financing. So, we need some predictability
    over a long period of time as we change and elected officials
    change.
        I encourage you to consider reauthorization of the Federal
    transit program in the year ahead and I urge this Committee,
    along with all other mayors and the U.S. Conference of Mayors,
    to grow the size of the transit program and to maintain the
    annual funding guarantees established under TEA-21.
        Thank you very much for this opportunity and I look forward
    to having a discussion with you later on.
        Chairman Sarbanes. Thank you very much, Mayor McCrory.
        Mr. Rodriguez.

                      STATEMENT OF ERIC RODRIGUEZ

                 DIRECTOR, ECONOMIC MOBILITY INITIATIVE

                      NATIONAL COUNCIL OF LA RAZA

        Mr. Rodriguez. Thank you, Mr. Chairman, for the invitation
    to speak today and share with you the perspectives and views of
    the Nation's Hispanics on transportation equity issues.
        I also want to take this opportunity to thank you for your
    leadership on predatory lending issues, which, as you know, is
    a critical issue concerning the economic security of the Latino
    families across the Nation. We look forward to working with you
    in the future Congress.
        Mr. Chairman, I appear here today on behalf of the National
    Council of La Raza, the country's largest national Hispanic
    constituency-based organization representing over 300
    community-based organizations and 33,000 individual associate
    members. Since 1968, NCLR has worked tirelessly to alleviate
    poverty and improve the economic security of the Nation's
    Hispanics.
        As you well know, Latinos across the Nation rely heavily on
    the country's transportation systems to get to and from work
    and access important educational and health services for their
    children. But, for the most part, the transportation policy
    process remains a mystery to many Latino advocates and
    community leaders who are often focused almost exclusively on
    other pressing community needs. As a consequence, Latinos,
    traditionally, have not engaged heavily in debates on the
    future of Federal transportation policy. In light of this, we
    appreciate the opportunity to share our thoughts with you as
    this debate begins to unfold.
        As you may well know, between 1990 and 2000, the country's
    Hispanic population grew by 58 percent and is now 12.5 percent
    of the total U.S. population. This growth has been accompanied
    by impressive economic labor market and political gains for
    Latinos. Hispanic purchasing power is on the rise, now over
    $580 billion annually, and Latinos make up the fastest-growing
    segment of new voters nationwide.
        More importantly, however, especially with respect to this
    debate, the influence and reach of Hispanics is now more
    dispersed than ever before, with growing numbers of Latinos in
    States such as North Carolina, Rhode Island, Georgia, Iowa, and
    Arkansas, just to name a few.
        Driven by the desire to work and provide for their
    families, Latinos have moved where jobs exist. In many
    instances, they have settled in regions of the country where
    transportation needs are most severe. What is more, in spite of
    the strong work ethic among Latinos, many continue to face
    serious economic and employment challenges. In 2001, 21.4
    percent of the Nation's Hispanics were poor. Latinos are three
    times more likely than other Americans to be working, yet still
    poor. And Latino families now make up one in four families in
    the TANF system nationwide.
        As the composition of the Nation's working families changes
    to reflect the growing presence of Latinos, systems designed to
    serve, strengthen, and protect these families should begin to
    weigh more heavily the distinct challenges facing these
    families. In this sense, refining and modifying systems to
    account for Latinos is much less a question of equity than it
    is one of good policymaking.
        Safety net systems and Federal policy in general will not
    effectively meet the growing needs of families and States if
    they fail to respond to the challenges in the populations they
    serve. With this in mind, transportation systems across the
    country must also begin to respond to the changes in
    communities and neighborhoods.
        From our standpoint, several items are important to
    consider for Latinos in the context of transportation policy.
    First, 9 in 10 Latinos reside in metropolitan areas and 45.6
    percent of Latinos reside in central cities. Almost one-quarter
    of these residents are poor, meaning public transportation and
    transit are particularly important for Hispanics.
        Second, Welfare to Work transportation issues have become
    especially relevant to the more than 500,000 families in the
    TANF system. Access to jobs initiatives that target
    transportation services for families that need to get to a job
    or training are key.
        Third, the emergence of Latinos in isolated areas of the
    country and the concentration of Latinos in regions where
    transportation challenges are especially acute, such as along
    the United States-Mexico border, as well as on the Island of
    Puerto Rico, mean that transportation initiatives targeted to
    the neediest areas of the country are an important focus for
    Hispanics as well.
        Fourth, poor or insufficient transportation policy outcomes
    for Latinos in their communities are a direct result of the
    limited role Latino community leaders and advocates have played
    in setting and shaping national, local, and regional
    transportation policies.
        Finally, system-wide transportation process issues
    concerning public information, participation, and
    accountability are major priority areas for the Nation's
    Hispanics.
        In view of this, from the perspective of Latinos, good
    Federal transportation policy would improve the flow of
    information on important transportation policy issues and
    questions to Latinos, increase Latino participation in
    transportation policy decisionmaking, ensure that
    transportation projects do not have disparate impacts on Latino
    communities, and deepen the relationship between transportation
    policymakers and administrators and Hispanic-serving community-
    based organizations.
        As the debate in Congress unfolds, lawmakers can take
    several specific steps that meet these broad objectives,
    including the following: Expand and strengthen the Job Access
    and Reverse Commute Program. More Latino families are beginning
    to reach their TANF time limits while jobs are becoming more
    scarce. In order to more successfully connect would-be workers
    to jobs, this program should be doubled in funding and refined
    to ensure greater innovation by improving the ability of
    community-based groups to compete for resources.
        Make targeted investments in public transportation.
    Policymakers should retain a uniform ratio of Federal-State
    investment in new capital capacity and public transit and
    highways and take steps to encourage, perhaps through the use
    of incentives, increased funding in public transportation, a
    key area for Latino families and workers.
        Strengthen guidance and implementation of language policy
    standards. The DOT has issued guidance regarding ways to better
    serve those that are limited-English-proficient. States need
    additional support and resources to effectively improve
    services, especially States with emerging communities, such as
    Georgia and North Carolina, dealing with the challenges of new
    immigrant populations with serious English language challenges.
        Encourage greater economic and community development. Two
    transportation measures can help to promote economic and
    community development where Latinos reside. First, States can
    be encouraged to set aside a portion of their Federal highway
    transportation funds for recruitment, training, and supportive
    services for minorities in transportation construction fields.
    Second, local hiring agreements for communities where
    transportation projects are built can be an effective tool for
    connecting unemployed Latino residents to jobs.
        Strengthen civil rights protections. There are clear
    patterns of disparate impact from transportation policy
    decisions across the States. Much more needs to be done to
    strengthen the existing protections built into the system,
    including issues around data-collection and accountability.
        And improve public participation in the transportation
    planning process. Full disclosure of the annual list of
    projects by Metropolitan Planning Organizations would improve
    accountability and equip local community leaders to engage in
    the process. Also the composition of the Metropolitan Planning
    Organizations should be adjusted to ensure that low-income and
    Latino residents can contribute to the decisionmaking process.
        Taking clear steps to address these concerns would go a
    long way toward improving transportation policy outcomes for
    Latinos and the States, cities, and neighborhoods where they
    live and work.
        I appreciate the opportunity to testify today and encourage
    you to call on us in the future.
        Chairman Sarbanes. Good. Thank you very much.
        Mr. Cox, I think we will go to you and we will give Mr.
    Winstead a chance to catch his breath. I will probably go to
    Mr. Kienitz, too, and then I will let Mr. Winstead conclude,
    since he was delayed getting here.
        We would be happy to hear from you, sir.

                        STATEMENT OF WENDELL COX

              VISITING FELLOW, THE HERITAGE FOUNDATION AND

                   PRINCIPAL, WENDELL COX CONSULTANCY

        Mr. Cox. Thank you, Senator. I will blame my lousy
    performance on not being ready. You took me by surprise.
        [Laughter.]
        By the way, in my prepared statement, I identified a couple
    of places where there were some errors and have an errata sheet
    here. I have 16 copies for you, Senator, if you would like
    them.
        Chairman Sarbanes. I would like to have them.
        Mr. Cox. I will obviously divert from my written statement
    and ask that my statement be accepted into the record.
        Chairman Sarbanes. Without objection, so ordered, along
    with the correcting sheet.
        Mr. Cox. Thank you, Senator.
        You are going to hear from me some perspectives that you
    have not heard before.
        Chairman Sarbanes. That happens to us from time to time
    here.
        [Laughter.]
        Mr. Cox. Nothing is predictable.
        I am talking this morning from the perspective of a
    situation where we have, as I think we all know, a very serious
    urban mobility problem in this country and a very significant
    problem of traffic congestion.
        We have seen over the last 10 years, according to census
    data, the average work trip travel time increase in this
    country 3.1 minutes, which is four times the increase from 1980
    to 1990. And my sense is we are liable to see that kind of
    geometric increase continue because we are not providing the
    new roadway capacity at this point to accommodate the continued
    traffic growth that virtually every Metropolitan Planning
    Organization in this country accepts is going to continue to
    happen.
        I am not suggesting it is real easy to go in and provide
    all sorts of new freeways in the cities. That can be done. But
    the point is we have a very difficult problem. And so, I am
    going to talk to you mainly from a perspective of how to make
    the transit program more effective in terms of dealing with
    traffic congestion in our urban areas.
        Now, the last 10 years have been a time of success and a
    time of failure for public transit. We have seen the overall
    numbers of public transit riders with respect to passenger
    miles increase. At the same time, the Census Bureau tells us
    that transit has now hit a 40-year low in terms of work trip
    market share. The reason work trip market share is so important
    is because it is the work trip that is of course concentrated
    two times during the day, that creates most of the traffic
    congestion that recurs in our urban areas.
        So that, over the last 40 years, all of the governments of
    this country have spent nearly $500 billion in 2002 dollars on
    public transit and there are fewer people using public transit
    today to get to work than at any point since the Census Bureau
    began asking the question 40 years ago.
        Chairman Sarbanes. What is the question that is asked on
    the basis of which you make that statement?
        Mr. Cox. Essentially, it is how did you get to work last
    week?
        In fact, Roy, I think that you have the exact question in
    your testimony.
        Mr. Kienitz. It says, ``How did this person usually get to
    work last week? If this person usually used more than one mode
    of transportation during the trip, mark the box of the one used
    for most of the distance.''
        Mr. Cox. Okay.
        Chairman Sarbanes. So if I go to work three times a week by
    car and twice a week by transit, then I do not use transit
    under this question. Would that be correct?
        Mr. Cox. It depends on how the question's answered. I would
    argue that if you asked me the question, when I used to ride
    the Park & Ride bus in Los Angeles three times a week, I would
    say I went by transit. If I went only 2 days a week, the
    appropriate answer would be, I did not go by transit. I went by
    some other means, that would be my interpretation.
        Chairman Sarbanes. I thought that is what I said.
        Mr. Cox. I perhaps misunderstood. See, you took me by
    surprise by putting me ahead here.
        In any event, the point is that the problems that we see,
    and even if we assume that transit ridership has been
    understated by the census surveys, even if we look at the
    transit increase over the last 10 years, which is only 16
    percent over 10 years in passenger miles, that would give you a
    bare increase in market share, very small. Still around 5
    percent of travel to work.
        The fact is, however, transit is a very attractive way for
    people to travel and people use transit where it is auto-
    competitive in the world. In Tokyo, for example, where you have
    a more than thousand-mile rail system with more than a thousand
    stations, 60 percent of the travel is on transit. In Paris,
    something like 24 percent of the travel is on transit. Yet, 80
    percent of the people live outside the city and 80 percent of
    the people work outside the city. And even with the fine
    transit system that they have in Paris, very little of the
    mobility between the suburbs where most of the people live and
    work is by transit.
        We look at the United States. In Manhattan, for example,
    where south of 59th Street, 75 percent of the workers get to
    work on transit, very successful. Yet, if you look outside the
    city of New York, where something like 70 percent of the people
    get to work on transit, in Senator Corzine's area and in
    Connecticut and in Westchester County, and Long Island, only 4
    percent of New Yorkers get to work on transit outside the
    central business district.
        Or if you look around the country, what you find is that
    transit is essentially about downtown. That is to say, you take
    the city of Chicago and the city of New York, not the
    metropolitan areas, and you take the 10 next largest business
    districts in this country, and you get 53 percent of the
    transit ridership to work. Fifty-three percent of the transit
    ridership to work goes to 600 square miles or less than 1
    percent of the urbanization of the United States. It is a very
    concentrated situation. And my basic point is that transit is
    about downtown and because it provides auto-competitive service
    essentially only to downtown, and in a very few, very large
    core cities like New York and Chicago, it really has no
    potential to make a significant impact in traffic congestion.
        This is illustrated, if you look, for example, at the
    Chicago area, where if you look at suburban-to-suburban trips
    that are available by transit for the work trip, average travel
    time on transit is something like 2 hours or even more--in a
    community where the average auto trip to go to work is only 30
    minutes. The point is, outside the central area, outside in the
    suburbs where people live and work, you find that most of the
    people that travel by transit do not have cars. They have much
    lower incomes. And the reason is because auto-competitive
    transit service is not available.
        Go to Portland, Oregon, which has done a significant job in
    trying to increase transit service and smart growth and so on,
    and you find that 70 percent of the locations in the urban area
    are accessible by auto-competitive transit to downtown. Only 5
    percent, however, when you get out to the suburbs.
        So transit is about downtown, and the basic problem with
    the Federal program and with the program of transit agencies is
    there are no plans to significantly change that. We do not see
    rail systems or bus systems that are going to make much of a
    difference in the suburbs and we cannot expect that to happen
    because even when you go to Europe, you find that the sprawling
    suburbs--and they have sprawling suburbs in Europe--you will
    find very little transit service between suburbs in places like
    that because auto-competitive transit service is limited
    essentially to the core areas and to the downtown areas.
        Now this is not because transit is no good or ineffective.
    It is because the urban forum is such that transit is unable to
    successfully serve the sprawing urban areas.
        We have seen a number of new transit rail programs around
    the country that are very popular. At the same time, the census
    data shows, for example, that transit ridership to work in the
    Dallas area, with three light rail branches and a commuter rail
    line, went down in the 1990's. We see that in the St. Louis
    area, with a very successful new light rail line, transit
    ridership went down to work in the 1990's. Or if you look at
    Portland, you find that traffic congestion in Portland has
    increased since the opening of the first light rail line by
    more than any community in the country, except for the Los
    Angeles area.
        My point is that, with respect to traffic congestion and
    transit, we need to be looking not at how many people are on
    the train, but how many people are being taken out of the
    roadway by virtue of being attracted to the train. All of the
    new travel that is anticipated in this country virtually is
    anticipated to be by automobile. And to best improve urban
    mobility, we need to be focusing, I believe, on reducing the
    hours of travel delay that people experience in this country.
        Now there were some rays of hope in the census data. We
    saw, for example, that while transit ridership was trending
    downward slightly, carpooling went up by about 250,000. And in
    a number of cities like Phoenix, Dallas, Houston, Seattle, and
    Atlanta, there were very substantial increases in carpooling.
    Or even better, take a look at telecommuting, where 750,000 or
    more new telecommuters were identified by the Census Bureau.
    That does not cost public money at all, and yet, takes people
    off the road without any question at all.
        Let me just close here by spending just a moment talking
    about smart growth because there are some proposals being
    talked about to expand Federal regulation in the land-use area
    with respect to the public transit and the transportation
    system.
        We need to understand that for all of the talk to the
    contrary, smart growth and the compact city does not reduce
    traffic congestion, despite the claims. It increases traffic
    congestion. All of the data, international and national, shows
    a strong correlation between higher densities, which smart
    growth requires, and higher intensities of traffic congestion.
        I believe it would be a mistake to impose any further
    regulations that encourage more dense development. Let the
    communities make their own decision because traffic congestion
    gets worse with smart growth.
        In addition to that, there is a much more difficult issue,
    and that is the issue of homeownership and housing
    affordability. The fact is that smart growth largely involves
    the rationing of land. And if there is anything we know about
    economics, it is that rationing increases prices.
        For example, Oregon, with the most comprehensive smart
    growth laws in the country, saw its housing affordability drop
    more, according to census data in the last 10 years, than any
    other State by far. The point is that when you ration land, you
    increase the price of housing which in turn creates real
    problems and it creates the most problems for lower income
    people who are denied homeownership, and those people are
    disproportionately minority.
        Dr. Matthew Kahn of Tufts University recently published a
    report to the extent that African-American homeownership was
    higher in more sprawling urban areas than in less sprawling
    urban areas. Or there is a new study that has just been
    published in the last 6 months by Harvard, and it is in my
    report, but I do not remember the exact names of the professors
    that did it. But they basically come to the conclusion that the
    differences in housing affordability in this country have
    largely to do with zoning and land-use differences. The more
    regulation, the more is the difference and the higher the
    housing prices.
        The real problem we have here is this Nation has managed to
    retain itself as the most affluent Nation in the world by far.
    Actually, there is one nation, Luxembourg, approximately the
    size of Fresno, that is more affluent, but that doesn't count,
    in my view. The point is that homeownership is a crucial
    element of the creation of wealth in this country. And smart
    growth reduces homeownership, raises prices, and, in the long
    run, will create a system where we have a less inclusive
    society.
        So where does that lead us? Let me suggest three
    recommendations. First of all, I would urge you to ask the
    Government Accounting Office to look very seriously at
    alternatives to better used transit funding to get the most, as
    it were, bang for the buck.
        How might we use transit funding, for example, to encourage
    more people to work from home, which is a very effective way of
    getting people out of their cars? How might we use transit
    funding to do a better job with high-occupancy vehicle lanes,
    carpools, bus rapid transit, and high-occupancy toll lanes that
    create a situation where transit might begin with these kinds
    of flexible systems to be able to serve more of the urban area.
        Second, I would suggest in the long run there is a need in
    this country to look more in the long run at the cost per-
    reduced hour of traffic delay, per-reduced hour of personal
    travel delay in terms of getting our programs more efficient.
        Finally, I would urge you to not increase regulation or
    impose any new smart growth regulations with respect to the
    reauthorization. Smart growth increases traffic congestion and
    it reduces homeownership, and those are not things that I think
    are good for this country.
        Thank you, Mr. Chairman.
        Chairman Sarbanes. Thank you.
        Mr. Kienitz.

                        STATEMENT OF ROY KIENITZ

               SECRETARY, MARYLAND DEPARTMENT OF PLANNING

        Mr. Kienitz. Thank you, Mr. Chairman.
        My name is Roy Kienitz. As you said, I am the Secretary of
    Planning for the State of Maryland. I will focus my remarks
    principally on the transit portion of what has been discussed
    today.
        As you just heard, a lot of figures have been cited to
    paint a seemingly bleak picture using data from the 2000 census
    long form about transit ridership. I would urge you to take
    that data with a significant grain of salt for a couple of
    reasons.
        The first of which is that other data sources actually show
    a markedly different trend in transit usage than is shown by
    the census data. As Ms. Dorn cited earlier, we saw a 22-percent
    increase in transit ridership over about the last 5 years. That
    was both the greatest increase that we have seen in many
    generations, as well as it was the first time since records
    have been kept that transit grew faster than driving over a
    period of 5 years. We have a conflict between the census data,
    which shows essentially no growth, and the actual data of
    paying customers showing significant growth. I think that would
    motivate us to look further at this issue.
        The second of which is, as you heard, the census
    questionnaire asked people about their journey to work. What
    people in the transportation community know is that work trips
    are about one-fifth of total trips. This methodology
    necessarily would miss the increase in the use of transit for
    this other 80 percent of trips, which almost certainly did
    occur and was missed.
        As to the question of transit and traffic congestion, it is
    fair to say that transit does not solve traffic congestion. I
    think Mayor McCrory said that, and Mr. Cox as well, and that is
    a true statement. But there is a lot more to the story than
    that.
        A metric has been developed to try to describe this and it
    is called the Congestion Burden. It is an indicator that allows
    you to look at both what the intensity of actual rush hour
    congestion is in any given metropolitan area, but to take that
    in the context of what portion of the population at any given
    time is being subjected to that congestion. I will give one
    example.
        The San Franciso and Detroit urbanized areas have about the
    same population. But the level of congestion is significantly
    more intense in the San Francisco area. And in fact, it was
    ranked second in the Nation by the Texas Transportation
    Institute in their report last year. But about three times as
    many people in the Bay Area do not participate in the
    congestion because they are using some other means of
    transportation rather than getting in their car and getting on
    the freeway and driving. The net result is that the burden that
    congestion places on the region is not second in the Nation.
    Their ranking dropped significantly to something like 29 out of
    the 70 largest cities.
        Detroit, on the other hand, has one of the lowest transit
    mode shares of a major city. And so, even though the intensity
    of its congestion is less, almost everybody is being subjected
    to it. The burden that that congestion is placing on that
    region is significantly higher, and it would rank third in the
    Nation, according to this particular measure of congestion
    burden.
        Chairman Sarbanes. Let me see if I understand that concept.
        Mr. Kienitz. Yes, sir.
        Chairman Sarbanes. Let's take New York, south of 59th
    Street. I think that is the figure you used. About 75 percent
    are using transit.
        Now if I am on the street in New York in my automobile, I
    may experience an incredible congestion problem. I may just
    inch along block by block, as many of us have encountered it.
    So the congestion is pretty intense, but the number of people
    affected by it as a percentage of the total population is a lot
    less. There is a whole significant element of the population
    who are not impacted by that street traffic congestion.
        Whereas, in Detroit, where there is not much transit, the
    intensity of the congestion may be less than in New York. In
    other words, I do not inch along. I move along by feet or
    yards, let's say. But the number of people impacted by that
    congestion is very high because there are not the alternative
    modes.
        Mr. Kienitz. That is exactly it. Mr. Cox is correct to say
    that the density of jobs and housing is directly related to the
    speed at which cars move on those roads. But you can have
    highly functioning, highly competitive, economically vibrant
    places that have slow road speeds because the system has been
    built around that principle. And Lower Manhattan is the prime
    example of that in our country.
        To dismiss transit as not solving congestion, requires us
    to determine whether the other ways in which we could spend
    that money would solve congestion. The principal alternative
    advocated by some people is take the money and spend it on more
    road capacity. And a lot of work has gone on in the last couple
    of years to trying to figure out whether that strategy is
    actually working.
        In my testimony, you see there is one figure that examines
    a group of the cities that were tracked for congestion over
    time. The group of cities that did the most to add roads found
    road capacity per person going up by 17 percent over the decade
    of the 1990's. The group that had done the least found road
    capacity per person actually falling by 14 percent over the
    course of that decade as population grew, but the road system
    essentially did not.
        According to the conventional wisdom, you would expect to
    see that the traffic problem in that second group was bad and
    getting worse, and that the first group was faring better. But
    in fact, that is not what you actually see.
        If you track these actual groups of cities over the course
    of the 1990's, at the end of the decade, the congestion is
    essentially the same in those two groups of cities, and the
    rate of change of congestion over the period of the 1990's was
    also essentially the same. We see slight differences of a few
    percent, but nothing major.
        And this actually tracks with our common sense experience,
    which is, Atlanta and Houston did a whole heck of a lot of
    road-building and the traffic is pretty bad there, and other
    cities did not, and they also have bad traffic.
        So, I do not think it is fair to dismiss transit as not
    solving the traffic problem, given that we do not seem to have
    much of a solution anywhere to the traffic problem.
        I think the Mayor placed the emphasis correctly, which is
    to say, if we do not have things in the toolbox that are going
    to eliminate congestion, then you have to adopt a different
    goal. And this goal is giving the individual the choice as to
    whether to tolerate that congestion or not, rather than having
    it be a choice made by the Government, in which we choose that
    people have to tolerate it.
        Rather, we want to give the individual the choice. And for
    those who, for whatever reason, wish to drive and put up with
    the congestion, they have that choice. Those who do not can
    make another choice.
        I would also like to talk about funding for a moment. When
    we talk about spending on transit, we usually are talking about
    Government spending. But, by far the greatest amount of
    spending on transportation is actually done by families.
    Businesses and families spend something like five times as much
    as Federal, State, and local government put together.
        And it turns out that the nature of the transportation
    system that the Government has provided has a huge effect on
    how much we have to spend as individuals. The Commerce
    Department reports that about 18 cents out of every dollar in
    the budget of the average American family is spent on
    transportation. But this varies widely.
        In Houston and Atlanta, it is 22 percent. And in New York
    and Chicago, it is 15 percent. An analysis has been done
    showing that the degree of sprawl in these areas and the access
    to good quality transit is a major determinant of how much
    families have to spend.
        Of course, this benefit is not entirely free. People in New
    York probably pay taxes at a higher level than in other cities
    in order to support their transit system.
        So, we went and looked at that and found that the average
    household in the New York region is probably paying $400 a year
    in taxes locally more than a family in Houston might be paying,
    where they do not offer much in the way of transit service. But
    personal expenditures per capita on transportation as a whole
    are $2,900 per year less for a household in New York than in
    Houston, and that is because car ownership rates are lower. The
    amount of driving that they do is lower. And they spend more
    money on transit, but transit is in fact a much cheaper choice
    for most people.
        We have to look not just at where the Government dollars
    are going, but how they are influencing where the private
    dollars are going. And by that measure, I think transit is a
    good bargain.
        I will cite one last statistic, too, which is you can look
    at these figures on a gross regional product basis, and look at
    different cities around the country. We did a comparison of
    Detroit, Chicago, and Toronto, three cities around the Great
    Lakes.
        What you find is that in the Detroit area, 15 percent of
    the gross regional product is going into passenger
    transportation. In Chicago, which has a much more extensive
    rail system, and has done somewhat less roadbuilding, it is 12
    percent of the gross regional product. But in Toronto, which
    has really aggressively invested in transit and did not build a
    lot of the roads over the course of the last 30 years, the
    share of gross regional product going to passenger
    transportation is 7 percent. That frees up a huge amount of
    money, usable for other things, whether housing, health care,
    or education, both for private investment and for public
    investment.
        To conclude, you can make a good case that transit is not
    now and is not going to be the dominant mode of transportation
    in the United States. And that is true.
        But that does not answer the pertinent question for the
    Committee, which is, where should the next dollar of public
    funds be invested? Because we have invested so heavily in the
    road system in this country over the last 50 years, additional
    marginal investments in that system actually provide a much
    smaller benefit than the first dollar we spent, which likely
    provided a very large benefit. The reverse is true for transit.
        As Mr. Cox pointed out we have significant and effective
    transit systems in the major metropolitan areas in the United
    States. But in many medium-sized and smaller cities, we do not
    yet. And that means that you can get a potentially larger
    marginal benefit by spending your dollars there. I would just
    say that, when you count everything, transit is a good buy.
        Thank you.
        Chairman Sarbanes. Thank you very much.
        Mr. Winstead.

                      STATEMENT OF DAVID WINSTEAD

                   CHAIRMAN, TRANSPORTATION COALITION

                      MARYLAND CHAMBER OF COMMERCE

                            ON BEHALF OF THE

                        U.S. CHAMBER OF COMMERCE

        Mr. Winstead. Senator Sarbanes, Members of the Committee,
    it is a pleasure to be here this morning, back before you,
    Senator.
        I am David Winstead and I am a partner in the law firm of
    Holland & Knight. I am here representing the U.S. Chamber of
    Commerce and I am also Chairman of the Maryland Chamber of
    Commerce's Transportation Coalition Committee, which is a
    statewide group in Maryland made up of the local chambers
    committed to mobility and better transportation for businesses
    in the State.
        The U.S. Chamber is the largest business federation
    representing more than 3 million companies and organizations of
    really every size and sector of the economy, as well as region.
        I would like to really articulate three basic objectives
    for the Committee's consideration. I would like to talk about
    the importance of adequate funding for transportation to meet
    the needs business commerce, as well as commuters and mobility
    of residents, to highlight the U.S. Chamber's TEA-21
    reauthorization, or TEA-3 policy principles, and also to
    discuss the objective of the Americans for Transport Mobility
    Coalition, which is out there and the U.S. Chamber is promoting
    this to build public and political support for safe, more
    efficient transportation systems.
        A little bit of a qualifier. I had the privilege of serving
    from 1995 to 1999 as the Maryland Secretary of Transportation.
    Senator Sarbanes and I worked very closely during those years.
    And in 1998, I was President of ASHTO, who did work with
    Congress during the reauthorization of TEA-21, very closely
    looking at both the transit and highway elements.
        Fortunately, for Maryland, we have a very integrated
    transportation department with five modes, including airport,
    port, both transit, bus, as well as the highway system.
        But both the United States and the Maryland Chamber of
    Commerce understand the importance of investments in our
    Nation's public transportation system. Increased investments is
    critical to the future economic growth of our metropolitan
    markets and our States, to keep competitive internationally.
    Obviously, it impacts on quality of life.
        We have heard a lot of evidence on this panel about the
    increased cost of congestion and the kinds of reactions
    businesses are forced to take in off-peak hours to move goods
    to consumers.
        And national security, that we need to be able to manage
    these systems and to get people on public transit. Particularly
    in the National Capital Region, we are very worried about
    evaluation and being sure that people can get out, where there
    unfortunately to be another incident.
        I would also like to mention, because Roy Kienitz, a former
    colleague of mine, and still with the State of Maryland, has
    pointed to this whole issue of land-use planning, which is key
    to this.
        As an aside, this morning, Senator, I spent time with the
    property-owners around the Largo station, which is a station of
    WMATA that will open in December 2004. And there are three
    primary property-owners, including the owner of the land, the
    lessee of the land that is redeveloping the old Cap Centre.
        And I will tell you that the focus on what happens after or
    before these public transportation systems, fixed-rail systems,
    are built is key to this whole thing. Taking the smart grown
    principles, looking in advance in terms of the kind of mixed-
    use densities that drive ridership and complement the community
    around there that is concerned about traffic congestion
    generated by transit stations. So that is ongoing. ULI this
    afternoon has a program in transit land-use planning.
        A lot of people are trying to deal with this factor of
    after the systems are in place, how do you best manage them
    from a development standpoint, from a land-use control
    standpoint, to get the most return from those transit dollars
    invested?
        But at a time when the business community and the Nation at
    large are more reliant upon seamless, multimode transportation
    systems, our systems, because they are aging, are really in
    many cases ill-equipped to handle the increasing volumes of
    people and freight. The Washington Beltway is a classic case of
    that every day. The businesses are modifying the distribution.
    The public is commuting, trying to get on fixed-rail and other
    rapid bus alternatives to accommodate essentially the problems
    we are having with road capacity.
        And in fact, public transportation, as Roy and others on
    this panel have talked about, is increasingly an important role
    in the American intermodal transportation system.
        In 2001, we saw 9.5 billion times that Americans used our
    public transportation system and ridership has grown since 1995
    by 23 percent. This represents the highest level in more than
    40 years. A lot of what we are seeing is paying off. These huge
    increases, the light rail in Baltimore, the subway, the
    extension of WMATA here. We are seeing rapid growth in terms of
    ridership increases. These ridership gains are directly
    attributable to the significant Federal investment. Without it,
    these systems would not be in place.
        In Maryland, for example, TEA-21 authorized, and the
    Senator took a lead in that, along with Senator Mikulski and
    other members of the delegation, in a $120 million investment
    in the light rail system in Baltimore. That was absolutely
    necessary. We opened during my tenure the extensions to Hunt
    Valley, a major business park north of Baltimore, and to BWI
    Airport.
        In portions of that system it was single-tracked, which
    really inhibited us from being able to have the frequencies of
    flows to generate ridership. And you have to have a system that
    is dependable, that is there, within a gate of time that people
    will use it. But that is a vital project that is now moving
    forward as an example of where this money has gone.
        Across America, investments are paying off. For every
    billion dollars in Federal capital funds, about 47,000 jobs are
    being generated and about $3 billion gain in sales. So for
    every billion in the transit or highway investments of the
    Feds, that is the kind of payoff you are getting.
        The consequence of not meeting the mobility demands placed
    on transportation systems are going to be increased congestion,
    decreased productivity, and increased traffic accidents. One of
    my major concerns as Secretary in Maryland was my concern about
    this vicious cycle of congestion leading to anxiety,
    overaggressive drivers, accidents, and more congestion. And we
    have to, through an aggressive driving program of the State
    police, we are helping. But congestion does lead to increased
    slowdown on our highway systems. And the cost of road
    congestion is ever increasing. It is nearly $78 billion
    annually, in 1998. That is more than triple what the cost of
    congestion was 20 years ago.
        To meet the transportation challenges facing the Nation, we
    must invest our limited resources in better, more efficient
    matters, and I think this panel has addressed some of the
    innovative transportation and public transit systems that are
    being considered.
        I know that the Washington area is considering rapid bus
    transit as a major alternative because of its reasonably low
    cost to fixed-rail or light rail investments. And the U.S. DOT
    estimates that $20 billion in capital investment is needed
    annually just to maintain and improve our current public
    transit systems. So the future success of the Nation's
    businesses and of our economy is predicated on mobility and
    efficient system.
        And the U.S. Chamber has created a coalition called the
    Americans for Transportation Mobility, to assist governments
    and other stakeholders in bringing about strong support for
    reauthorization. This coalition is made up of more than 350
    national, State, and local organizations in favor of building
    safer, more efficient intermodal transportation systems, and
    the Chamber has formulated a nine-point agenda for
    reauthorization for your consideration, which we hope will help
    increase surface transportation investments.
        Today, I will highlight very briefly four or five core
    planning principles and values. First, the U.S. Chamber
    strongly advocates that during reauthorization, the Senate and
    the Congress recognize the multimodal nature of the States'
    transportation network and strives to improve mobility,
    flexibility, funding, and competitiveness between these
    systems.
        Second, the U.S. Chamber advocates the Nation's need to
    spend all the revenues collected in the Highway Trust Fund for
    surface transportation investment, as well as expand on the
    public-private funding initiatives.
        There are many engineering firms and many investors out
    there. There are several, like Conex in Europe and Yellow
    Transportation in Maryland, that are very willing to enter into
    privatization of public transit systems to be able to better
    manage and better market those systems. And that is another
    alternative.
        Third, the U.S. Chamber recommends that all fuels used for
    the highway system users, including ethanol, be taxed at the
    same rate as gasoline and have these revenues dedicated to the
    Highway Trust Fund, with 80 percent dedicated to the Trust Fund
    and 20 percent to the mass transit account. Further, 2\1/2\
    cents per gallon of the ethanol tax that is currently placed in
    the U.S. Treasury should be transferred to the Highway Trust
    Fund again with an 80/20 split with Federal, State, and local.
    We must fully utilize all the current funding mechanisms before
    considering new options. But the Chamber's priority is to have
    the Federal Government grow its investments in the surface
    transportation systems. That will meet our Nation's business
    needs, as well as our traveling public's needs.
        Fourth, the Chamber supports ways to accelerate product
    delivery once the decision is made to maintain and improve our
    transportation infrastructure. Senator, you were involved in
    this during the reauthorization. I know there was a lot of
    discussion at DOT with Emil Frankel and his group. But, in
    truth, there is a lot to be gained from ensuring on the Federal
    level that the permit review processes are not streamlined,
    that they are not reduced to save environmental degradation or
    issues that we are trying to protect the environment, but are
    approved from a process standpoint.
        Concurrent reviews of the Federal permitting processes with
    the Federal national resources agencies tied into the State
    reviews can help move projects forward, in the estimate of the
    American Council of Engineers, some 30 percent faster, which
    would mean, Mr. Chiarman, on the Intercounty Connector, you
    could move that project forward. Maybe instead of 10 years,
    maybe 7 years, or WMATA's purple line. So there is great
    savings, we think, as a Chamber, in implementing good review
    mechanisms of the permitting processes.
        In conclusion, the U.S. Chamber and the Maryland Chamber
    and the Nation's business community at large looks forward to
    working with Congress, this Committee, and the President, to
    see that the Nation improves our multimodal transportation
    network to meet growing demand needs and keep our
    competitiveness, and obviously, try to wrestle with what all of
    our metropolitan areas are dealing with, and that is increased
    congestion and increased time in commuting, and increased loss
    of productivity.
        Thank you, Senator.
        Chairman Sarbanes. Thank you very much.
        The first question I want to ask is, how do we, if not
    value, give sufficient consideration to the externalities that
    come as we discuss this issue?
        For example, the environmental benefits that flow from
    people using mass transit rather than being in their
    automobiles, or the mobility advantages that come because
    children or young people can use transit. The elderly can use
    transit. As Mr. Rodriguez emphasized, we still have a
    population where affording an automobile is a pretty expensive
    proposition.
        Now all of these, it seems to me, are benefits that we
    realize from transit, but are hard to quantify in some
    measurable way. And yet, it seems to me, these should be
    criteria that we consider as we try to evaluate these programs.
        I would be interested in people's reaction to that.
        Mayor.
        Mr. McCrory. Mr. Chairman, I think you bring a good point
    about the environment. We tend to concentrate on just saying
    the air environment. I know Mr. Cox mentions the density
    argument. There is a major advantage to having some new density
    come into major cities and there is an environmental argument
    for that.
        We have areas in Charlotte, due to a transit line just
    being planned, that used to be an area of total blight,
    brownfields, unemployment, inactivity, and no tax base, we now,
    because of a transit line, have people who would typically have
    moved out to sprawl greenfields, have moved into the center
    city area. I am not talking about the downtown area. I am
    talking about outside the downtown area in the three-mile
    radius directly out of downtown, many areas of major
    metropolitan areas that have continued blight and decay.
        What is happening in our New Start project is we have this
    new development that has occurred which I believe has helped at
    least slow down some of the sprawl, or the greenfields that may
    have been developed 30 or 40 miles outside of our city because
    some of the new workers now have a choice to live a mile or two
    from the workplace. And that, in the long-run, then, has a
    long-term measurement on our air pollution because we would not
    have as many people traveling 30 or 40 miles in during rush
    hour typically in an automobile.
        One other item I wanted to say about the smart growth, and
    I am a very strong advocate of good growth and quality growth
    about housing.
        If you look at the areas in the 1960's and 1970's in any
    city, I do not care what city it is, they all look the same.
    And if you look at the value of the homes in those cities,
    especially of the middle-class and lower-class homes, their
    values have gone down because of the congestion, the poor
    planning, the poor quality of work, and no zoning. And now,
    with the promise of transit coming through and good urban
    planning, all of a sudden, the values of those houses are going
    up.
        That is a good thing for poor people and middle-class
    people. They would rather have the value of their homes go up
    than go down. And I guarantee you want to ask every one of them
    that question because they should have the same investment
    opportunities that I have had.
        And what is happening around the transit stations that we
    are planning, the property value is going up. But the middle
    class and the lower middle class actually like that because
    that is often their major investment for their lifetime. And
    that to me is both an economic argument and an environmental
    argument.
        I do think, I have stated this in the past, the previous
    Administration and the new Administration, to the EPA
    Administrators, some of our EPA policies actually work against
    transit. We have these attainment areas which actually
    discourage density in the urban areas because we have the
    attainment areas that, yes, in the short term, your air
    pollution will go up.
        For example, when we built a football stadium in downtown
    Charlotte, that works against our attainment area. Well, it
    made a heck of a lot more sense to build a football stadium in
    downtown Charlotte than 40 miles out in the greenfield, where
    we would have to build new infrastructure.
        The environmental policies actually sometimes contradict
    some of our sound transit land-use policies, and I think they
    need to be more integrated in the future.
        The Administrator, by the way, who I am very impressed
    with, who gave the testimony, I think she is a strong advocate
    of awarding those people who not only have good transit plans,
    but also have good land-use plans.
        Chairman Sarbanes. Good. Anyone else?
        Yes, David.
        Mr. Winstead. On your question about the environmental
    benefits of transit, in both Baltimore and Washington, you
    obviously have the planning process at the Baltimore
    Metropolitan Council and the Council of Governments, and a
    conformity plan that they need to develop annually.
        So, you can see the direct benefit for projects, for
    example, the purple line that is being proposed, in terms of
    its contribution or benefits to clean air versus a new highway
    lane.
        There is a way under the conformity and the modeling going
    on at the Council of Governments and the Baltimore Metropolitan
    Council to actually document that existing and new plan transit
    systems, what they are contributing to in terms of clean air.
    That is something that I might mention to you.
        The other thing, your question about transit and
    incentivizing, I think the ITS issue is important here because,
    in Maryland and many other WMATA buses, increasingly, they are
    putting on DJS systems that will tell the operators exactly
    where every bus is and in the shelters. The bus shelters are
    going to be digital. There are some models of this now in
    Maryland, that tells you when the bus will be there.
        I think the more we can make transit systems consumer-
    friendly in terms of dependable information about arrival and
    departure times, the more people will opt for them.
        And the last thing, which, again, is this transit argument,
    I think one of the biggest distractions to trying to get more
    people on transit is that when you get down to this concept of
    local land-use control and Federal investment, there has been a
    disconnect in many ways.
        I know the last bill did have land-use elements in it and I
    understand that they are going to be strengthening those in
    terms of the transit funding, looking at land-use decisions
    that will aid ridership once the system is in place.
        But what happens continually, and it is still happening
    daily in the Maryland marketplace and the Washington region, is
    local political opposition from community groups that know they
    are getting a new Metro station or an existing one. There is
    still a lot of opposition to high-density around those
    stations. That is exactly where the high density should occur,
    residential, retail, and office.
        Again, trying to get more people on transit, I think part
    of the problem is that disconnect on the local level of land-
    use planning and decision that is very deferential to community
    groups in and around those areas. Roy Kienitz could draw a
    circle around a transit station and define what the best mix of
    uses and the densities. Trying to translate that and to sell it
    locally is often our problem.
        And I could cite Greenbelt and Largo as current examples,
    and others, where for example, the policy on smart growth of
    the Feds, of the State of Maryland, and some of these counties
    about mixed-use, high-density development of these transit
    stations gets broken down in the inability politically to sell
    it to the neighborhoods around those areas.
        That is something that is going to continue to play out,
    but I think that is a distraction to trying to get more
    ridership on some of these systems.
        Mr. Cox. Yes, Mr. Chairman. There are also many negative
    externalities to the building of the expensive rail systems. A
    number of communities in the central city, where low-income
    people live, and perhaps 25, 30, 35 percent of the households
    do not have cars, have seen their bus services decline as a
    result of the investment in the rail systems.
        We are probably all pretty much aware of my old agency in
    Los Angeles, which has been involved in building an expansive
    rail system and the Federal courts came in and basically told
    them stop or slow down because you are taking away from the bus
    system on which the low-income people in this community rely.
        In the early 1980's, people in our community in the Los
    Angeles area, the South Los Angeles area, and the East Los
    Angeles area, oftentimes had to wait for two or three buses to
    go by before they could get space on those buses. That
    situation exists today.
        Back in 1985, we had a low-fare program in Los Angeles
    which created a situation where we were carrying 500 million
    riders a year. Today, they are carrying only about 420 million
    riders, despite the addition of seven commuter-rail lines, two
    light rail lines, and a metro-line.
        The point is that we are not using our transit money to get
    the most impact. And the most impact, I believe, needs to be
    obtained where people need transit the most. People need
    transit the most in our inner cities.
        If you look at St. Louis, example, where major service
    reductions have occurred in the bus system in recent years at
    the same time that the light rail system has continued to
    operate at full level.
        My basic point is that the people who are prepared to ride
    transit and need it oftentimes are the people who are penalized
    as a result of a vain effort to try to attract upper middle-
    income and middle-income people out of their cars for the
    travel to the downtown work location. Because, remember, as we
    pointed out, you go around the country, you cannot find any
    place in this country besides the downtown area where a
    significant percentage of workers are getting their on transit.
        So that is why I think we have to be looking at two things.
    First, with respect to maintaining current systems, we need to
    be putting more money into getting more riders, especially
    those riders that need the services, because if you take
    surveys in the lower-income sections of our central city, you
    are not going to find people that are overly happy with the
    transit system. And second, with respect to service expansion,
    we need to be doing things that reduce traffic congestion and
    hours of delay the most.
        Chairman Sarbanes. I should note, my understanding is that
    under the New Starts program now, a jurisdiction seeking New
    Starts funds, as part of their effort, has to show that they
    are not going to deteriorate the existing bus service.
        Now that may well have come out of the Los Angeles example
    you gave, and I know there was a lawsuit in Los Angeles. But my
    understanding now is that there is a hurdle, a threshold you
    have to cross to show that you are not going to deteriorate,
    for instance, the bus service. Is that right, Mayor? I saw you
    nodding.
        Mr. McCrory. That is my understanding. I just might add, in
    Charlotte, as we institute our new rail system, we are putting
    an incredible amount of new money into expanding our bus system
    and integrating the two.
        Chairman Sarbanes. I am looking at your map and I notice
    that.
        Mr. McCrory. That is right.
        Chairman Sarbanes. You have red and blue lines and it is
    rail transit and bus.
        Mr. McCrory. And we are also creating bus hubs in between
    the corridors. For example, at the shopping malls.
        I agree with Mr. Cox, on the one aspect, you shouldn't
    reduce your buses. In fact, you should increase your buses at
    the same time.
        The other point is, one of the reasons that the downtown
    areas are hubs, which statistically is correct, is because we
    do not have smart growth out in the suburbs. The developments
    that have been occurring in the last 20 years, there are no
    sidewalks, a lot of times no curb and gutter if you go to any
    modern city. We did not even have basic infrastructure, much
    less smart growth.
        So that is one of the reasons. If you are going to build a
    new transit system, whether it be bus or rail, people need to
    be able to walk to and from those stations.
        I think we have learned that some of the systems that did
    not work in the last 10 or 20 years, is that when people get
    off at a certain stop, there is nowhere to go safely. And so,
    it must be an integrated approach at all levels.
        Chairman Sarbanes. I want to address this decreasing
    congestion problem. I am having some difficulty working this
    through.
        First, if we do not have the transit so that all those
    people are thrown onto the roadways, we would have an
    incredible congestion problem, would we not?
        Mr. Winstead. Absolutely.
        Chairman Sarbanes. The 5 percent that are using it, if that
    is the figure, or whatever the figure may be, may be a critical
    figure in terms of shifting that ridership over to another mode
    of transportation.
        Mr. Winstead. Senator, there is no question, if you were to
    take the ridership on Metro in a Washington commute and try to
    put them on road systems, nobody would be going anywhere.
        Mr. Kienitz. Perhaps some of the people from the Federal
    Transit Administration can verify this, but I think that the
    figure that has been calculated by someone is that traffic
    would be 37 or 40 percent worse if we were in that situation
    and those people were put back on the roads.
        Now, the truth of the matter is that if you put all those
    people back on the roads, probably some of them would say, ``No
    thank you, I will stay home.'' And so, whether the actual
    result would be that bad or not, I do not know.
        Chairman Sarbanes. Mr. Cox.
        Mr. Cox. Mr. Chairman, only to point out I certainly would
    not want to be misinterpreted as suggesting that we not do what
    we are doing now. I was not suggesting that we should close
    down transit. The fact is that transit does a very significant
    job in some very small areas of this country. And it would be
    inconceivable, for example, to operate the New York business
    district without transit, or the Baltimore business district
    without transit.
        My only point, Mr. Chairman, is that we need to recognize
    that the market of transit with respect to automobile
    competitiveness is limited essentially to downtown, and
    downtown represents only 10 percent of the employment in our
    urban areas. And so, as people continue to suggest that transit
    is an answer with respect to reducing traffic congestion, my
    only point is, not so. Not so in the United States and not so
    in Europe.
        Chairman Sarbanes. Let me pursue that for a moment. I
    presume it is certainly so in certain highly dense urban areas,
    isn't it?
        Mr. Cox. There are no major employment centers outside of
    the downtown areas where a significant percentage of people
    take transit to work.
        Chairman Sarbanes. But the downtown area is an essential
    part of our economic structure, is it not?
        Mr. Cox. It is only 10 percent.
        Chairman Sarbanes. We have to make sure that the downtown
    area can function, do we not?
        Mr. Cox. Oh, indeed. Transit is absolutely crucial with
    respect to downtown.
        Chairman Sarbanes. Yes. And do you think it is crucial to
    Charlotte? Do you think Charlotte has enough downtown that
    transit is crucial to Charlotte?
        Mr. Cox. No.
        Chairman Sarbanes. What do you think about that, Mayor?
        Mr. McCrory. I disagree.
        [Laughter.]
        I am building a 25-year transit plan. I am building a
    transit plan for the next generation. We are one of the
    fastest-growing cities in the United States.
        If Charlotte looked like it was 10 years ago, I would never
    imagine Charlotte's downtown--60 story, 40 story, 50 story
    buildings, 10 years from now and 20 years from now, I am going
    to be dealing with a major issue.
        Chairman Sarbanes. Right.
        Mr. McCrory. First of all, I am out of room for roads. I am
    not like a Texas prairie. I am out of room. If I start building
    more roads, I am tearing down neighborhoods.
        Chairman Sarbanes. Right.
        Mr. McCrory. I can only build the roads so wide. And by the
    way, some roads, I can build 8 or 10 lanes wide, but it doesn't
    make any difference because the land-use patterns are so bad,
    that I would have to put a traffic light every 15 yards so that
    people could get in and out of their neighborhoods. So the
    roads aren't going to help me in that regard, and that is why I
    think it is very important to provide a choice to the people in
    Charlotte.
        And, yes, in our downtown area. By the way, we are going to
    be putting in a major light rail line to our university, which
    I regret to say is in the suburb. I wish it was in downtown
    Charlotte, but it was not designed that way 25 years ago.
        The area where the University of North Carolina at
    Charlotte is located, which has 25,000 students, was a cotton
    field 50 years ago. It is now a huge metropolitan area. It is a
    city unto itself. So our goal is to have students using
    transit. I have a picture of what that area is going to look
    like 25 years from now. If I do not start it now, I sure as
    heck am not going to be able to start 25 years from now because
    I won't be able to find the corridors to begin.
        Chairman Sarbanes. Yes.
        Mr. McCrory. An old chairman of a utility company convinced
    me, you do not wait until the paint arrives to start planning.
    You do it now, before it is too late.
        Chairman Sarbanes. We built both a football and a baseball
    stadium in Baltimore's downtown, within walking distance of the
    business district. So all of the transit that is designed to
    move people in and out to work can be utilized to move people
    in and out to the sports events in these stadiums.
        In addition, the parking for downtown, that accommodates
    the office workers, just seamlessly moves over and accommodates
    the people attending the sporting events.
        We can move a lot of people in and out in a relatively
    short time. We, in effect, intensify our use of the established
    infrastructure, whether it is highways, parking garages, light
    rail, mass transit, bus lanes, the whole bit.
        We are utilizing that fixed investment to a much greater
    degree. And by and large, it is worked pretty well. It is in
    marked contrast with stadiums that are put out in the
    countryside, so to speak, and then they have these horrendous
    traffic jams trying to get people into and then out of the
    stadiums.
        David, you had something to do with all of that.
        Mr. Winstead. Senator, I think that you are absolutely
    right. The business community in downtown Baltimore takes
    advantage of the parking. You have light rail that is heavily
    utilized during both the Orioles and the Ravens games.
        The example of the MCI Center here in town is another
    classic case. When it was out on the Beltway without transit,
    it had very little ridership. Now downtown, right next to the
    WMATA headquarters gets 30 percent of spectators coming to the
    MCI events are doing so by public transit. So in both Baltimore
    and Washington, you are seeing that payoff.
        Chairman Sarbanes. Mr. Kienitz.
        Mr. Kienitz. I might generally address this question of
    building value. Both highway and transit investments build
    value. But they build it in different ways and they build it in
    different places. And this gets to this question of, are the
    traditional downtowns and denser, urbanized areas a place where
    we are going to see more growth or not?
        Transit builds value around the stations in a very
    concentrated way, and you are seeing that, as you referenced,
    in Dallas, but also in Charlotte, and in Portland, and in all
    sorts of places around the United States. And Gallery Place
    here, this intense building of value and this intense rush to
    invest around these places where the system is seen as
    competitive.
        Highway investments build value, too. But the place where
    they build value is in the large, diffused area beyond the end
    of the road, and much of that value is being built into land
    that was previously of very little economic value for
    development because it was greenfield land and the trips were
    too long in order for a developer to think that they could make
    money building it.
        By spending our money on the same old same old, what we are
    doing is adding value into the private sector, but we are
    adding it in the very diffuse areas and we are adding it to
    greenfield land, which then becomes more likely to be
    developed. But when you invest in transit, you are also adding
    value, but you are adding it in a very different way.
        That is why places like Washington, DC, for example, in the
    1980's, you saw residential and office development going
    everywhere else. Now that the transit system has really been
    fully completed and we have done things like the MCI Center,
    the downtown is capturing its share and some might argue, even
    greater its proportionate share of commercial development. It
    seems like it is very hard to argue that that is not a
    desirable outcome, for all of the reasons of all the
    externalities that you cite.
        And so, when you are making the decision about where to
    spend your money, and what kind of trend to reinforce, it seems
    like that is the trend to reinforce.
        Mr. McCrory. Mr. Chairman, if I could add just one fiscally
    conservative viewpoint, too.
        Chairman Sarbanes. Mayor.
        Mr. McCrory. A part of the equation that I think would be
    wise for your Committee to look at is if you do transit and you
    have high density in urban centers in metropolitan cities, that
    actually saves my taxpayers' money because I do not have to
    build a new interchange 20 miles out, which one bridge now can
    cost millions upon millions of dollars. So there is some cost
    savings of major infrastructure that I wouldn't need for a
    football stadium in downtown Charlotte, which, I might add, we
    did play the Baltimore Ravens recently this year.
        I did not want to mention that.
        [Laughter.]
        But the infrastructure to build a stadium way out, and not
    just a stadium, but businesses and housing, would cost me a
    great deal that I think has to be part of the equation. And I
    think that is one reason you are seeing taxpayers put some
    local money in for the short-term for transit.
        Chairman Sarbanes. Mr. Cox.
        Mr. Cox. Senator, I just wanted to comment because this
    issue has come up a couple of times.
        Secretary Kienitz mentioned the fact that costs of
    transportation are higher in more sprawling cities. The same
    data shows that cost of housing more than make up the
    difference. So if you add the cost of housing and
    transportation together, more sprawling cities are less
    expensive for people than less sprawling cities.
        Now, by the way, that does not mean that I favor sprawl. I
    think we have to allow people to live and work how and where
    they like, unless there is some good reason not to. And I do
    not think there is one. But I wanted to make that point, sir.
        Chairman Sarbanes. Well, that is a correlation. I do not
    know that it is a causation. There are lots of other factors
    that go into what the cost of living in an area might be. The
    more sprawling city may be in a less developed part of the
    country, so to speak, and so, I do not quite know how you
    establish the causation.
        Mr. Cox. I would suggest, Senator, that if it is
    appropriate to comment, that it is more costly to travel in a
    more sprawling city, it is appropriate to comment that it costs
    less to live there.
        Chairman Sarbanes. All other factors being equal. But you
    have to look at what the other factors are.
        Mr. Cox. Indeed.
        Chairman Sarbanes. Yes, Mr. Kienitz.
        Mr. Kienitz. I would say that you are right, the list of
    confounding factors is far too long to explore in any detail
    here.
        But I would say that I would generally agree with Mr. Cox
    that there tends to be an inverse relationship: In places where
    people spend a large portion of their personal budgets on
    transportation, they are spending less on housing. And the
    places where people spend a small portion of their personal
    budget on transportation, they are spending a larger portion on
    housing. Those two things tend to float up and down together.
        The interesting thing is, what is the result for the
    economic fortunes of that household in making that choice? The
    thing you find is that the money that goes into transportation
    is money that is spent on personal property, largely. It is
    spent on a car. And as every one of us who has ever bought a
    car knows, you put down your $20,000, you buy your new car, and
    then 7 or 8 years later, you sell it for $3,000 and you go out
    and buy another one for $20,000. That is a rapidly depreciating
    asset.
        By contrast, if you choose to spend less money on that and
    more money on your housing, you are putting into a very
    different type of investment. It is a real property investment,
    which, on average, the value of which goes up over time.
        And so, although I cannot speak to the question of whether
    it is genuinely an inverse relationship with these things. But
    presuming for a moment there is, I would argue that the wiser
    choice financially for the individual family is to spend less
    of their money on transportation, which is mostly money down
    the drain, and put more of it into housing, which is money that
    grows over time.
        Mr. Cox. Mr. Chairman, If I might make one quick comment.
        Chairman Sarbanes. Senator Carper is here and I want to
    yield to him.
        Mr. Cox. The homeownership is also higher in the more
    sprawling cities. So in the less sprawling cities, people may
    be spending more on housing, but they are not necessarily
    getting more in wealth as a result of home appreciation because
    the renting percentage is significantly higher.
        Chairman Sarbanes. Senator Carper.

                  COMMENTS OF SENATOR THOMAS R. CARPER

        Senator Carper. Mr. Chairman, how is this panel? Are they
    pretty good?
        Chairman Sarbanes. We have had an interesting discussion.
        Senator Carper. How about the ones from Maryland?
        Chairman Sarbanes. And we had the Administrator before this
    panel and she was quite good.
        Senator Carper. I apologize for missing your presentations.
    Some of us have been over at the White House today talking
    about transit in Baghdad and how much that is going to cost.
        [Laughter.]
        What that leaves for other things here.
        I thank you all for being here and for sharing your
    thoughts with us today and responding to our questions.
        As I understand it, both APTA and ASHTO have been
    advocating significantly higher levels of investment in our
    Nation's transit systems than has the FTA.
        A two-part question, why the discrepancy between what APTA
    and ASHTO are saying they think we need as compared to the FTA?
    And do you think that, for your own communities, the FTA's
    estimates are what you all need?
        Mr. McCrory. If I could answer that first, sir, if you do
    not mind. I have a flight to catch, too, and I really
    appreciate this opportunity.
        Senator Carper. Where are you going?
        Mr. McCrory. Back home to Charlotte.
        I would like to say, I think a fair question was asked of
    the Administrator by the Chairman before you came regarding
    some of the statistical analysis.
        I do think we need to look at, first of all, some of the
    more faster-growing cities and make sure that they are included
    in some of the numbers for the next 20 years, because
    comparing, say, a Phoenix with a Detroit and looking at the
    demographics of the two, I do not think is a fair comparison,
    just from a demographics and growth standpoint.
        So, I think it is fair to analyze the statistics that you
    are looking at to see what the real growth patterns will be,
    especially as it relates to some of the newer sunbelt cities,
    but also some of the cities like Baltimore and others that are
    now again growing, especially outwardly, and dealing with some
    of those growth issues.
        I think that was a fair question that you asked to make
    sure that we are getting analysis because I would see a higher
    number needed, and I think most of the mayors would, too.
        Senator Carper. Thanks.
        Chairman Sarbanes. Mayor, I think we should excuse you
    because I know you have a flight to catch. If there is any
    elected public official whose presence is close to
    indispensable on the scene, it is the mayor. So, we understand
    that. We very much appreciate your coming today.
        Mr. McCrory. It was an honor to be here, sir.
        Chairman Sarbanes. Thank you.
        Mr. McCrory. Thank you very much.
        Senator Carper. The four of you who are still here have an
    opportunity to answer a two-part question.
        Mr. Winstead. Senator, I think the DOT is going to have
    their needs assessment back out. I think the figure that I am
    aware of, and I am here representing the U.S. Chamber, is about
    a $60 billion annual need. And I know that between ASHTO and
    APTA, that there is a discrepancy. I think it is reflected
    pretty much in the difference between the dollars that the
    transit industry would like to see going into New Start
    programs, and the cost to maintain an existing highway system
    and bridges, which is substantial.
        So, I think that is really what you are seeing in terms of
    the APTA that is the custodian of the metropolitan transit
    systems, and ASHTO, that is multimodal, but still has a lot of
    focus on the highway elements and through the chief engineers.
    I think that is probably the difference.
        Senator Carper. Mr. Winstead, where do you live?
        Mr. Winstead. I am sorry. I live here in Maryland.
        Senator Carper. But where?
        Mr. Winstead. Chevy Chase.
        Senator Carper. Okay.
        Mr. Kienitz. My only comment would be, sir, that this being
    the Government, the decision about the level of investment
    rarely has to do with the level of the need.
        So, although you may well be right that the level of the
    need is understated by virtue of what you might call a
    relatively low projection in how much transit use is going to
    grow over the next 20 years, perhaps you are a better judge
    than I about whether the level of need that is stated in the
    reports, regardless of what it is, is a determining factor in
    how much we then actually spend.
        Senator Carper. All right. Thanks.
        Mr. Cox, where are you from?
        Mr. Cox. St. Louis area.
        Senator Carper. Do you want to take a shot at the questions
    I asked?
        Mr. Cox. Actually, I think that one has to be very careful
    as you look at projecting what is going to be the future in
    terms of transit ridership. We have heard a lot of discussion
    this morning before you came in about the large increases in
    industry-reported data from 1993, which happened to be pretty
    much the low point, the nadir, as it were.
        Senator Carper. Did you say nadir?
        Mr. Cox. Nadir, as in n-a-d-i-r, right, the low point.
        What a lot of people do not tell you with respect to the
    big increases in transit, and as Roy has indicated, transit
    percentage-wise has increased faster than highways, for
    example, over the last 5 years. At the same time, highway use
    has increased 35 times the number of passenger miles that
    transit has increased.
        We have a situation where in the early 1990's, transit was
    dropping very substantially. And so, if you look at the last 10
    years, the overall annual increase in transit passenger miles,
    according to the APTA data, and the APTA data is a little more
    expansive than the FTA data, it is like 1.6 percent annually.
        So when FTA says 1.6 percent annually, I think that is a
    fairly reasonable figure.
        Senator Carper. All right. Thank you.
        Mr. Rodriguez.
        Mr. Rodriguez. Sure.
        Senator Carper. And where is your home?
        Mr. Rodriguez. I am actually based here in DC, but I am
    from Brooklyn, New York.
        Senator Carper. Okay.
        Mr. Rodriguez. I know transit.
        Senator Carper. So, you can answer the questions from a new
    perspective.
        Mr. Rodriguez. I know transit very well, yes.
        I think it is fair to say that there is a balance, in
    determining need and the course of policy, between some of the
    transportation efficiency questions that were raised today, as
    well as the needs articulated by people in the communities
    themselves, and some of the social goods that transportation
    produces as well.
        Hence, I do believe that some of the particular pieces
    where communities are able to engage and to participate in the
    process of planning, to articulate what their particular needs
    are and their will is very important to the process. And I hope
    that as we move forward in determining policy, that we continue
    to include those perspectives in the debate.
        Senator Carper. Well, good.
        Anybody else? Any closing words?
        Mr. Winstead. Senator, your State and Maryland, which I was
    Secretary in Maryland for 4 years----
        Senator Carper. When were you Secretary?
        Mr. Winstead. From 1995 to 1999, in Maryland.
        Senator Carper. I bet you knew Ann Canby.
        Mr. Winstead. Excuse me?
        Senator Carper. I bet you knew Ann Canby, our Secretary of
    Transportation.
        Mr. Winstead. I knew Ann Canby very well. We had some
    meetings at Amtrak stations.
        Senator Carper. I think I recall one. We still have
    meetings at Amtrak stations, by the way.
        Mr. Winstead. I am sure you do.
        [Laughter.]
        Maryland and Delaware still have a huge split in transit.
    Right now, in Maryland, for example, and I am not sure of the
    figure in Delaware, for the first time in the history of
    Maryland's trust fund, which is State funding, it is now almost
    50/50. And just 7 years ago, it was more like 60 highway and 40
    transit.
        Senator Carper. And now it is 50/50.
        Mr. Winstead. It is almost 50/50 now, in terms of State
    dollars.
        But I want to answer your question about APTA's call for
    money versus ASHTO's call for money. I think the reality is
    most States now, because of the economy, and even though
    interest rates are down and people are buying cars whenever
    they get zero APR, the reality is that the State coffers are
    very dry, as reflected with the Federal.
        The concern that is being expressed--and I know that I can
    speak for this in Maryland--that on the highway portion, there
    is very little new money to be added to the highway capacity in
    the State of Maryland until reauthorization comes around, when
    you all deal with that.
        A lot of the people, and again, the mobility factors, if
    you look at 90 percent or 96 percent, using highways on a 24-
    hour basis and 4 percent transit, whatever it is, it varies.
    But the dominance in terms of the automobile use, that the lack
    of those monies on the State side and the State coffers is
    putting a huge call through ASHTO for $40 billion or whatever
    their number is that they are trying to get reauthorization.
    So, I think that is why you are seeing that increased call.
        Senator Carper. Mr. Cox.
        Mr. Cox. Yes. One thing I forgot to mention in my
    statement.
        I do believe it is important for this Congress to recognize
    at the moment that there are very significant funding
    imbalances in our urban areas.
        Since 1980, we have seen spending on transit go up 40 times
    the rate per passenger mile that spending on highways has gone
    up.
        All over the country, we have situations like in Atlanta,
    where over the next 25 years, 55 percent of the regional
    resource will be spent on transit to get the community from a
    market share per transit of 2.6 percent to 3.4 percent.
        And I would suggest, Mr. Chairman, that there is a real
    need to reexamine our policies because the fact is, all of the
    MPO's in the country--Metropolitan Planning Organizations--
    anticipate that virtually all the new demand in this country is
    going to be for highways. That is, automobiles. Yet, we are
    spending it elsewhere. And in the long run, we are going to be
    much worse for it with respect to traffic congestion in our
    communities.
        Senator Carper. All right.
        Well, let me give the benediction. Chairman Sarbanes has
    walked out of here and left the gavel to me. This does not
    happen every day. I am tempted to call up a couple of bills and
    get them to move through quickly.
        [Laughter.]
        But if I did that, it would be the last time he would leave
    the gavel to me.
        [Laughter.]
        I was over at the White House this morning and had an
    interesting conversation with the National Security Council
    Advisor and some others on the situation that we face in Iraq.
        I am reminded that today, we will import, I have been told,
    as much as a million barrels of oil indirectly from Iraq, and
    that the country that some think we will be at war with within
    a matter of several months. I hope not, but it could be.
        Over half the oil that we use in this country now comes, as
    you know, from places outside our borders, and a lot of it from
    places that the people who control it do not like us too much
    and do not always have our best interests at heart.
        I would hope as we move forward from this discussion, that
    we continue to focus on not only how can we fund transit, but
    also how can we make it attractive so that instead of that
    being to move the needle from 2.6 percent to 3.4 percent, we
    are moving it a good deal higher.
        I really do appreciate your being here. Thank you so much.
        Mr. Rodriguez. Thank you.
        Mr. Winstead. Thank you.
        Mr. Kienitz. Thank you.
        Mr. Cox. Thank you, Senator.
        Senator Carper. The hearing is adjourned.
        [Whereupon, at 12:30 p.m., the hearing was adjourned.]
        [Prepared statements, response to written questions, and
    additional material supplied for the record follow:]
                  PREPARED STATEMENT OF SENATOR JON S. CORZINE
        Thank you, Mr. Chairman, for holding this latest hearing on
    reauthorization of the Transportation Equity Act for the 21st Century--
    TEA-21, and I would like to join you in welcoming Administrator Dorn
    and the other witnesses.
        Mr. Chairman, as the Banking Committee focuses on the state of the
    Nation's mass transit infrastructure, it is clear that the amount of
    funding Congress is providing for mass transit does not meet the
    demands that are being made. It is true that TEA-21 greatly increased
    the amount of funding available for mass transit. But the Department of
    Transportation shows us in its report on the status of the Nation's
    transit system that we need much more just to maintain transit at the
    level it is currently at.
        As a Senator who represents a State with the third largest mass
    transit system in the country, I can attest to the need that is out
    there. New Jersey's transit system has been impacted by the events of
    September 11, as well as by the fact that it is home to many of the
    people who work in Philadelphia and New York and crowd road and rail
    every day. As a 25-year commuter to New York City myself, I can testify
    that things are getting worse and a dramatic increase in funding is
    necessary,
        As I have testified to this Committee in the past, New Jersey is
    working hard to create mass transit opportunities to get more drivers
    off the road. Rail lines such as the Hudson-Bergen and Newark-Elizabeth
    Light Rail lines are being built to alleviate traffic congestion, as
    well as help revitalize New Jersey's urban areas. I will fight to
    secure sufficient Federal funding for these projects in the next TEA-21
    legislation. I will also work hard to secure funding for an additional
    rail tunnel under the Hudson River.
        Mr. Chairman, I look forward to working with you to develop
    legislation that will meet the needs of New Jersey and the other States
    in the Nation. Thank you for holding this hearing and I look forward to
    hearing from our witnesses.

                                   ----------

                     PREPARED STATEMENT OF JENNIFER L. DORN
                 Administrator, Federal Transit Administration
                       U.S. Department of Transportation
                                October 8, 2002

        Mr. Chairman and Members of the Committee, thank you for the
    opportunity to testify today on the conditions and performance of our
    Nation's transit infrastructure. As you may be aware, Federal Transit
    Administration Deputy Administrator, Robert Jamison, testified on this
    topic before the House Subcommittee on Highways and Transit on
    September 26, 2002. Like his statement, my testimony today draws upon
    the findings of the 2002 Conditions and Performance Report, which is in
    final clearance. A summary of the major findings of the report with
    respect to transit is attached to this statement.
        I am pleased to report that record levels of investment in transit
    by Federal, State, and local governments have improved transit
    conditions and increased transit capacity and utilization in America.
    Between 1990 and 2000, total transit capital investment spending
    doubled, from $4.5 billion to $9.1 billion. The pace of growth in State
    and local spending increased the State and local share considerably,
    from 41.9 percent in 1990 to 52.8 percent in 2000.
        These increased investments reflect growing recognition of the
    important benefits that public transportation provides to our
    communities and our Nation. Public transportation is an essential
    thread in the fabric of America, resulting in greater personal freedom,
    enhancing the economic vitality of our communities, and making our
    Nation safer and healthier.
        Whether to reduce travel time, ease the stress of a daily commute,
    or contribute to a healthier environment, more and more Americans are
    choosing to ride transit. Public transportation provides people with
    mobility and access to employment, community resources, medical care,
    and recreational opportunities in communities across America. It
    benefits those who choose to ride, as well as those who have no other
    choice: Over 90 percent of public assistance recipients do not own a
    car and must rely on public transportation. Public transit provides a
    basic mobility service to these persons and to all others without
    access to a car. Greater accessibility to public transportation and the
    development of paratransit services has significantly increased
    mobility for people with disabilities.
        The incorporation of public transportation options and
    considerations into broader economic and land-use planning also helps
    communities expand business opportunities, reduce sprawl, and create a
    sense of community through transit-oriented development. By creating a
    locus for public activities, such development contributes to a sense of
    community and can enhance neighborhood safety and security. For these
    reasons, areas with good public transit systems are economically
    thriving communities and offer location advantages to businesses and
    individuals choosing to work or live in them. And, in times of
    emergency, public transportation is critical to safe and efficient
    evacuation, providing the resiliency America needs in its emergency
    transportation network.
        In addition, every trip on public transportation helps to reduce
    road congestion and automotive emissions, and contributes to meeting
    local air quality goals. Public transit agencies are also contributing
    to a cleaner environment by using clean natural gas and other
    alternatively fueled buses, and high occupancy transit vehicles that
    move more people at lower energy cost. The Intermodal Surface
    Transportation Efficiency Act of 1991 (ISTEA) and Transportation Equity
    Act for the 21st Century (TEA-21) have played an important role
    maintaining and improving the condition and performance of America's
    transit systems. This, in turn, has played an important role in
    attracting passengers to transit. Providing communities with the
    continued resources to make investments that will attract new riders
    and encourage even more regular ridership could help America achieve
    significant reductions in energy consumption and improve air quality
    without imposing new burdens on industry.
        Finally, public transportation is an important component of our
    Nation's emergency response and evacuation plans in the event of
    natural disasters or terrorist incidents. Transit vehicles often serve
    not only as a means of moving people away from affected areas, but also
    as an important means to transport emergency workers to the site or as
    a temporary shelter for both workers and victims.
        Mr. Chairman, we believe that giving State and local governments
    additional flexibility to choose the best means of dealing with local
    transportation problems from among the variety of potential solutions
    will help the Nation meet the growing demand for improved
    transportation.
        The Conditions and Performance Report provides detailed statistical
    information. Rather than repeat that detail, I would like to provide an
    overview of the state of transit assets and operations, and then
    discuss some additional perspectives on the following two key issues:
    (1) Short-term investment needs, and (2) the implications of increased
    investments in transit.

    Overview

    Infrastructure and Ridership Growth
        The growth in capital investment under ISTEA and TEA-21 has
    resulted in a significant expansion of the Nation's transit
    infrastructure, particularly rail. New and modernized transit vehicles
    and facilities have prompted dramatic increases in transit use,
    reflected in an increase in the number of passenger miles traveled,
    which grew by 12.2 percent between 1997 and 2000. Growth in ridership
    on rail grew at twice the rate of growth in nonrail transit ridership.
    At the same time, vehicle occupancy rates reached a new high in 2000 as
    a result of increased occupancy rates on rail vehicles. Vehicle
    occupancy rates for buses, on the other hand, have declined since the
    last report, suggesting that the public is looking for the higher
    quality and reliability that rail has been able to provide. FTA is
    encouraging local transit systems to consider the introduction of a
    variety of improvements to bus service that will begin to improve
    quality of this lower-cost transportation alternative, including
    exclusive bus lanes, traffic signal preference, and limited stops.
    While these features are common to some of the most successful bus
    rapid transit systems, they can often be effectively applied to regular
    bus service, as well, to improve ridership.

    Vehicle and Facility Conditions
        Increased capital investments have also reversed the decline in the
    physical condition of transit vehicles and slowed the deterioration of
    bus and rail facilities. Vehicle conditions remained relatively
    constant between 1997 and 2000, indicating that recent investments were
    sufficient to maintain conditions. Changes in the condition of various
    types of rail and bus facilities have varied. Station conditions, for
    example, have improved significantly, and track conditions have
    remained constant. The condition of power systems and structures has
    improved somewhat, but it is estimated that 20 percent of such
    structures are in substandard conditions. Yard facility conditions,
    which have been impacted by increases in the size of transit fleets,
    have declined slightly, but all remain in adequate or better condition.

    Estimated Long-Term Investment Requirements
        The Cost to Maintain Transit is estimated at $14.84 billion per
    year. This represents the estimated average annual capital cost for the
    20-year period from 2001 to 2021 to maintain transit conditions and
    performance expressed in year 2000 dollars from all sources--Federal,
    State, and local governments. This investment would allow transit to
    keep conditions and service quality at current levels, while growing
    ridership at the modest 1.6 percent per year average rate included in
    Metropolitan Planning Organizations' long-range plans. The Cost to
    Improve Transit is estimated at $20.62 billion per year. This figure
    represents the estimated average annual capital cost to raise
    conditions and performance to ``good,'' again expressed in year 2000
    dollars.

    Short-Term Investment Needs

        The Conditions and Performance Report makes long-term projections
    of investment needs and reports a single ``average annual'' investment
    requirement for the entire 20-year period. Due to a variety of factors,
    including the fact that the amount of transit infrastructure to be
    maintained will grow as new investments are made, the estimated
    investment needs in the near-term are, as one would expect, measurably
    lower than the projected investment needs in the out-years.
        As shown in Table 1, below, estimated expenditures are projected to
    be sufficient to not only maintain conditions and performance through
    2003, but also to begin to tackle the backlog of investment needs,\1\
    and improve transit conditions and performance, as well. The model
    projects that, in 2004, $12.1 billion in capital expenditures would
    maintain current conditions and performance, and $20 billion would be
    needed to improve transit conditions and performance to ``good.''
    ---------------------------------------------------------------------------
        \1\ Like the average annual investment requirement, these figures
    assume a 20-year schedule for reducing current backlog of investment
    needs.

                                                         Table 1
               Short-Term Projections of Cost to Maintain and Improve  Transit Conditions and Performance
                                      (in billions of year of expenditure dollars)
    ----------------------------------------------------------------------------------------------------------------
                           Projected Available  Capital    Estimated Cost to Maintain     Estimated Cost to Improve
            Year                     Funding*              Conditions and Performance    Conditions and Performance
    ----------------------------------------------------------------------------------------------------------------
              2001                          $13.3                           $9.3                          $14.9
              2002                          $14.1                           $8.8                          $14.5
              2003                          $15.0                          $12.1                          $16.3
              2004                           n.a.                          $12.2                          $20.0
    ----------------------------------------------------------------------------------------------------------------
    * Assumes Federal funding levels in the President's Proposed Budget for Fiscal Year 2003.

    Implications of Increasing Investment in Transit

        In 2000, Federal funds accounted for 17 percent of all (capital and
    operating) transit funding. State and local funds represented 51
    percent of transit funding, and system-generated revenue accounted for
    32 percent of funding.
        Between 1990 and 2000, total transit capital investment spending
    doubled, from $4.5 billion to $9.1 billion. While Federal investment in
    transit capital increased by an impressive 62 percent between 1990 and
    2000, local spending increased even more dramatically, more than
    tripling over the decade to $3.8 billion in 2000. By 2000, combined
    State and local funding capital investments in transit represented over
    half of the Nation's total capital spending on transit. The growth in
    local capital investment is particularly impressive in light of the
    fact that beginning in 1998, Federal formula funds could not be used
    for operating expenses in areas with populations over 200,000.
        The dramatic increase investment signals a significant shift in
    America's perception of the value of investing in transit. Communities
    throughout America recognize that their investment in transit is more
    than paid back through economic growth, increased mobility, and an
    enhanced quality of life.
        As you know, one important source of funds for new transit capital
    investment projects is the Section 5309 ``New Starts'' program. In
    2000, $0.98 billion was invested by the Federal Government through this
    program. In 2003, the President has proposed spending $1.21 billion on
    New Starts. The President has also proposed a 50 percent cap on the
    Federal match for such projects. This proposal reflects not only the
    willingness of communities to share equally in transit investments, but
    also the hard reality that more and more communities will be seeking
    such funds in the future. We believe that this proposal will not only
    permit scarce Federal resources to help more communities, but will also
    recognize and reward communities that embrace transit as a vital part
    of their community.

    Conclusion

        Mr. Chairman, I am pleased to report that America's investment in
    public transportation is reaping substantial benefits and we continue
    to make progress in the conditions and performance of our transit
    assets.

                    PREPARED STATEMENT OF PATRICK L. McCRORY
                        Mayor, Charlotte, North Carolina
                                October 8, 2002
    Introduction
        Mr. Chairman and Members of the Committee, thank you for the
    opportunity to testify before you today.
        As a Mayor of a major city I want you to know that I support
    growing and predictable Federal financial support for public
    transportation. Investing in public transportation helps our cities and
    towns meet the mobility needs of all our citizens. This in turn helps
    us to improve the quality of life and sustain economic growth and
    development in our communities. We need the Federal Government to
    continue to be our partner in providing people with safe, reliable, and
    convenient mobility options that are integrated with our local efforts
    to manage the use of our land and improve our communities.
        To help you understand the importance of Federal support for public
    transportation, I would like to describe to you in the time available
    to me how we in Charlotte are seeking to use public transit to grow our
    community smarter.
    The Charlotte Approach: Integrating Transit and Land Use
        As background, Charlotte was the second fastest growing city in the
    Country during the 1990's when our population grew by 36 percent to
    541,000 residents. At the same time, the vehicle miles traveled (VMT)
    in our community grew over 40 percent. This growth has created traffic
    congestion and air quality problems that threaten our quality of life
    and our ability to sustain economic growth in the future.
        The disparity between the growth in VMT and population occurred
    because during much of the 1990's Charlotte growth continued to follow
    the conventional suburban form with low density, widely separated land
    uses and street designs that force people to drive their cars
    everywhere on increasingly longer trips. This form of land development
    is the same one that has plagued other fast growing cities, as well as
    many of our Country's older cities. By the mid-1990's, we in Charlotte
    recognized that if we wanted to protect our excellent quality of life
    while sustaining our growth we needed to do things differently.
        As a result, in 1994 local governments, working with business and
    community leadership, adopted our Centers and Corridors land-use
    Vision. This vision calls for concentrating the majority of future
    development in five travel corridors and a dozen or so major activity
    centers around Mecklenburg County. It also calls for
    creating higher density, mixed use and pedestrian-friendly development
    in these areas. The vision recognized the need to develop a
    comprehensive public transit system, including rapid transit in the
    five corridors, to support this change in land development.
        Over the next several years, private and public interests worked
    together to agree on a strategy for developing the transit system and
    creating more transit oriented development. This cooperative effort
    resulted in the preparation of our 2025 Integrated Transit/land-use
    Plan in 1998. With this Plan, we went to the voters with a half cent
    sales tax initiative to help build and operate a regional public
    transportation system. In November 1998, on our first try, voters
    approved the sales tax by a 58 percent to 42 percent margin, which
    gives you some idea of the priority that local residents placed on the
    need to invest in an alternative to driving.
        Since 1998, we have taken a number of steps to implement the 2025
    Plan including the following:

     Using a combination of Federal, State, and local funds from
        the sales tax, we have expanded and improved our existing bus
        system. As a result, over the last 4 years ridership on our bus
        system has increased by 23 percent, including a 5 percent increase
        over the last 12 months in a soft economy.
     We have now completed Major Investment Studies in all five
        transit corridors. The studies resulted in the selection of light
        rail in our South Corridor for our first project and
        recommendations for a mix of bus rapid transit, light rail, and
        commuter rail services in the remaining four corridors.
     We have also undertaken a number of steps to accomplish the
        land-use component of our 2025 Plan including:

       the adoption of Transit Station Development Principles and
            joint development guidelines to guide station area planning and
            design;
       the adoption of a Pedestrian Overlay District and an Interim
            Transit Zoning Overlay for stations on the South Corridor
            Project; and
       the preparation of Station Area Plans including City-funded
            infrastructure improvements for the South Corridor Project.

        Each of our Major Investment Studies has included a component on
    the land-use strategy for the corridor which has been used in the
    evaluation of transit investment alternatives. Our South Corridor Light
    Rail Project received a ``Highly Recommended'' rating from the FTA last
    Spring in part because of the coordination of land use with the
    Project's development.
        Our recommended System Plan, if adopted and fully implemented,
    would result in a 2025 transit system with:

     23 miles of BRT busways
     21 miles of light rail service
     11 miles of streetcar service
     29 miles of commuter rail service
     60-70 stations with transit oriented development opportunities
     520-bus fleet to support rapid transit and serve other areas
        of the community.

        The estimated capital cost for our System Plan is $2.9 billion in
    escalated dollars of which $1.99 billion would be for rapid transit
    development. In our financial planning, we have assumed 50 percent
    Federal funding for our rapid transit projects and 80 percent Federal
    funding for formula and other grants. As a result, our need for Federal
    funding support to achieve our plans over the next 20 plus years is:
    Nine hundred ninety million dollars in New Starts funding and $643
    million in formula grant funding for a total of $1.633 billion or 56
    percent of the total estimated cost.

        This Federal funding will be matched by $766 million from the State
    of North Carolina (26 percent) and $583 million in local funding (18
    percent). Therefore, the vast majority of our local sales tax will go
    toward subsidizing the operation of the transit system.
        We are not seeking to build the public transit system I have
    described as an end to itself. Rather, our efforts to develop this
    system is to support a fundamental change in how our community will
    grow in the years ahead and to provide our citizens with a real choice
    in how to get around. By doing this, we will:

     cut down on the rate of growth in vehicle miles traveled which
        will help us deal with our air quality problems and reduce our
        local dependency on fossil fuels and imported oil;
     provide all of our citizens with access to jobs, educational
        opportunity, and the other things one needs to lead a quality life;
        and
     allow our community to sustain its growth and economic
        development by protecting our tax base and the investments we have
        made in schools, public facilities, utilities, and other urban
        infrastructure.

        Without the level of Federal funding I outlined, we will not be
    able to make our plans for transit and land use a reality and therefore
    will not be successful in achieving our quality of life and economic
    development goals. We will also not be able to contribute to national
    policy goals like cleaner air; conserving energy resources and reducing
    dependency on foreign oil; access to educational and economic
    opportunity; and national security. So in addition to the availability
    of Federal funding, we also need Federal funds to be predictable to
    help us develop multiyear capital investment plans and to take
    advantage of opportunities to leverage private financing.
        Accordingly, and in conclusion, as you approach reauthorization of
    the Federal surface transportation program in the year ahead I urge you
    to grow the size of the Federal transit program and to maintain the
    funding guarantees established under the current law (TEA-21).
        Thank you again for the opportunity to appear before you today.

                                   ----------

                      PREPARED STATEMENT OF ERIC RODRIGUEZ
      Director, Economic Mobility Initiative, National Council of La Raza
                                October 8, 2002

    Introduction
        Mr. Chairman and Members of the Committee, thank you very much for
    inviting me to appear today on behalf of the National Council of La
    Raza (NCLR), the largest national Latino research and advocacy
    organization. NCLR works to improve life opportunities for this
    Nation's more than 35 million Hispanics through our network of nearly
    300 local community-based organizations and 33,000 individual associate
    members. NCLR has worked since its inception in 1968 to reduce poverty
    and improve the economic security of Latino families.
        Despite having the highest rate of labor force participation,
    Latinos are three times more likely than other Americans to be working
    full-time, year-round, but still poor. Working poor Latino families
    nationwide rely heavily on public transportation to get to work, access
    needed public services, take their children to see doctors, and obtain
    better employment or housing options. In this sense, transportation
    issues, though often overlooked by the broader Latino community, are
    central to the economic security and well-being of Latino workers and
    their families. In light of this, I appreciate this opportunity to
    present testimony on the transit needs of Latinos.

    Background
        Between 1990 and 2000, the U.S. Latino population grew by 58
    percent and is now 12.5 percent of the U.S. population. The growth of
    the Nation's Latino community is also reflected in growing economic,
    labor market, and political influences. The purchasing power of Latinos
    now stands at over $580 billion, Latinos--especially immigrants--
    constitute a substantial share of entrants into new jobs, and new
    surveys show that Latinos make up a sizable share of new voters.\1\
    ---------------------------------------------------------------------------
        \1\ Mobilizing the Latino Vote: Tapping the Power of the Hispanic
    Electorate. Washington, DC: National Council of La Raza, July 2002.
    ---------------------------------------------------------------------------
        Furthermore, Latinos are now more geographically dispersed than
    ever before. The high population growth nationwide is explained, in
    part, by greater than 300 percent growth in the Hispanic population
    between 1990 and 2000 in States such as North Carolina, Georgia, and
    Arkansas.
        Hispanics are becoming a more integral part of the fabric of
    America's cities and States. However, in spite of a growing presence
    and strong work ethic, Hispanics continue to face social and economic
    difficulties. During this period of economic recession, the prosperity
    of the past several years has stagnated and the outlook for Latinos is
    particularly challenging. For instance, data from the U.S. Census
    Bureau reveal that 21.4 percent of the Nation's Latino population were
    poor in 2001, nearly twice the national average of 11.7 percent. The
    unemployment rate for Hispanics has remained near 7.5 percent since
    January 2002, while the national unemployment rate was 5.6 percent in
    September 2002. Furthermore, Latino families composed 25.0 percent of
    the total TANF caseload in 2000, up from 20.8 percent in 1996.
    Governmental systems and structures designed to address the challenges
    facing American workers and their families must weigh more heavily the
    influence of the burgeoning Hispanic community.
        The Nation's safety-net systems, including TANF and Food Stamps,
    are making modest but significant adjustments that ensure that poor
    Latino and immigrant families do not continue to slip through the
    cracks. Other major systems, especially transportation, must also begin
    to acknowledge the changing demographics in the States and cities, and
    take steps to ensure that infrastructures are responsive to the new
    environment.
        Several transportation issues are particularly relevant for
    Latinos. First, public transportation is a key means of gaining access
    to jobs for Latinos. Hispanics are overwhelmingly concentrated in
    metropolitan areas (91.3 percent) with 45.6 percent of Latinos
    concentrated in the central city of metropolitan areas. Meanwhile, the
    poverty rate for Latinos in the central cities was 23.9 percent--higher
    than the overall poverty rate for Latinos (21.4 percent). In addition,
    not surprisingly, the most recent available data revealed that, in
    1992, nearly one in five (18 percent) transit riders was Latino, a
    share that has undoubtedly grown in recent years due to the growth of
    the population and increase in the trend of States denying driver's
    licenses to immigrants. Not only is public transportation an important
    means of getting to work for Latinos, it is also needed for families to
    seek and obtain improved housing, as well as those wishing to access
    important public services, especially health and nutritional services
    for their children. Clearly, there are high levels of need for, as well
    as significant use of, public transportation by Latinos.
        Second, in light of the growing share of the nationwide TANF
    caseload consisting of Latino families, welfare to work transportation
    issues are especially relevant for Latinos. Numerous studies have
    documented the significant barrier that transportation poses to parents
    struggling to move from welfare to work.\2\ Recent studies point to the
    fact that nearly all (94 percent) TANF recipients rely on public
    transportation.\3\ Access to dependable and reliable transportation
    that brings poor Hispanic women to training and job opportunities is a
    critical need.
    ---------------------------------------------------------------------------
        \2\ For additional information regarding the impact of
    transportation barriers on successful exit from TANF, see the Welfare
    Information Network's transportation resource page at: http://
    www.welfareinfo.org/transport.asp, October 2002.
        \3\ Resources, Community, and Economic Development Division,
    Welfare Reform: Transportation's Role in Moving From Welfare to Work.
    Washington, DC: U.S. General Accounting Office, May 1998.
    ---------------------------------------------------------------------------
        Third, while Latinos are more likely to be found in metropolitan
    areas, many Latinos, particularly those in ``emerging'' communities
    across the Nation, are in rural areas where the transportation needs
    are severe. Only 60 percent of rural communities have public
    transportation.\4\ Moreover, research by NCLR has shown that
    transportation difficulties are a particular barrier for TANF
    recipients, and other low-income workers, in semirural and rural areas
    of Puerto Rico, where reliable public transportation is not available
    after 2 p.m. or even earlier, and the nearest area to board transport
    is often a long distance from homes.\5\
    ---------------------------------------------------------------------------
        \4\ Status of Rural Public Transportation--2000. Washington, DC:
    Community Transportation Association of America, April 2001.
        \5\ Boujouen Ramirez, Norma, Welfare Reform Implementation in
    Puerto Rico: A Status Report, Research Paper Series (1-01). Washington,
    DC: National Council of La Raza, April 2001.
    ---------------------------------------------------------------------------
        Fourth, limited opportunity for Latino communities to contribute to
    the transportation planning process has allowed many projects to
    disrupt low-income, minority communities, while not benefiting those
    communities with economic development.
        Finally, there are a host of transportation-related issues with
    respect to maintaining healthy and environmentally safe communities and
    ensuring appropriate and useful public education in key transportation
    issues. For example, the California counties of King, Fresno, San
    Francisco, Riverside, Imperial, San Bernardino, and Los Angeles have
    hospitalization rates for Latinos that meet or exceed the State rate
    for hospitalizations for asthma for all populations. Within these seven
    counties are four of America's five most ozone-polluted cities. The
    high number of Latinos with asthma is a direct result of living in
    environmentally unsafe communities that have consistent poor air
    quality attributable, in no small part, to transportation policy
    decisions.\6\
    ---------------------------------------------------------------------------
        \6\ ``Asthma's Impact on Latinos.'' San Francisco, CA: Latino
    Issues Forum, see website: http://www.lif.org/health/asthma.html,
    October 2002.
    ---------------------------------------------------------------------------
        In addition, motor vehicle crashes are the leading cause of death
    for Hispanics through the age of 25 and the second-leading cause of
    death for Hispanics between the ages of 25 and 44. This mortality rate
    is due in part to a lack of proper driver's training and awareness
    about the use of seat belts.\7\ Proper and adequate involvement by
    Latinos in public education efforts on major transportation issues
    could address this issue.
    ---------------------------------------------------------------------------
        \7\ ``U.S. Transportation Secretary Mineta Marks National Child
    Passenger Safety Week, Urges Parents to Buckle Up Children Correctly,''
    Press Release, Washington, DC: U.S. Department of Transportation,
    February 12, 2001.
    ---------------------------------------------------------------------------
    Latino Priorities
        The condition and performance of our Nation's transportation
    infrastructure has real implications for all families. Whether to
    reduce pollution, ease the gridlock for rush-hour traffic, or enhance
    the economic vitality of our communities, transit must be well planned
    and implemented. To ensure that the Nation's Latino families benefit
    equally from transportation policies, Hispanic communities must have
    meaningful access to all processes that impact transit.
        The following priorities highlight the key transportation policy
    issue areas for Latinos.

     Improve the flow of information on important transportation
        policy issues and questions to Latinos. Important information on
        transportation matters must be conveyed and delivered in an
        appropriate format for those with language barriers. The most
        recent data from the Census Bureau estimate that 46.6 percent of
        the nearly 27 million people who speak Spanish at home speak
        English less than very well. The importance of the effect of
        language barriers on access to transportation cannot be
        underestimated since transportation is essential to participation
        in modern society. Fortunately, the Department of Transportation
        has taken a very important step toward overcoming language barriers
        by publishing guidance on special language service to those with
        limited English proficiency. This document outlines several
        important ways of providing language services, such as translation
        and interpretation services, and pictorial signage rather than
        traditional text to alert of driving conditions. While the LEP
        guidance is integral to beginning to ensure meaningful access to
        transportation programs and activities, additional assistance
        should be provided to ensure that transit authorities reach out to
        communities with concentrations of Spanish-speakers and provide
        them with free language services.
     Increase Latino participation in transportation policy
        decisionmaking; improve representation on Metropolitan Planning
        Organizations. Public involvement in transportation planning is key
        to ensuring that Latino communities benefit equally from transit
        projects. Investments in transportation resources for such areas
        should become the priority since low-income Latinos tend to have a
        higher dependence on public transit. One significant example of the
        need for Latino involvement in transit design can be found in the
        debate surrounding Austin, Texas' proposal for a light rail system
        during the 1990's. It is our understanding that the public voted
        down the light rail initiative partly because the system did not
        fairly address the transportation needs of the city's low-income
        Latinos. The majority of the proposed system would have provided
        access to more affluent areas in western Austin with limited access
        to the predominantly Hispanic area of Central East Austin. Although
        light rail would have provided few benefits to Central East Austin,
        it would have had significant economic, environmental, and social
        impacts there due to the proposed location of a storage and
        maintenance facility in the area. This facility would have
        increased noise and air pollution, and likely led to reduced
        property value. In addition, the proposed light rail station, while
        purported to revitalize Central East Austin, would have had a
        negative impact on existing businesses due to displacement and
        increased competition.\8\ In the case of light rail in Austin, the
        Hispanic community was reactive and, as a result, the proposed
        light rail system failed.

        \8\ For a more detailed discussion of the potential impacts of the
    light rail proposal on Central East Austin, see, Almanza, Susana & Raul
    Alvarez, ``The Impacts of Siting Transportation Facilities in Low-
    Income Communities & Communities of Color.'' Austin, TX: People
    Organized in Defense of Earth and Her Resources, July 1995, see
    website: http://www.fta.dot.gov/library/policy/envir-just/
    backcf.htm#Impacts, October 2002.
    ---------------------------------------------------------------------------
      The inclusion of Latinos in the planning and design of transportation
        projects can lead to better plans for all communities and
        successful execution of such proposals. The increasing political
        and economic influence of the Latino community is better utilized
        when those communities are allowed to be proactive in the
        transportation planning process.
     Ensure that transportation projects do not have disparate
        impacts on Latino communities. Historically, low-income and
        minority communities have relied on public transportation systems
        that are often neglected by transit systems once established. While
        relying on these outdated forms of transportation, new projects and
        infrastructure improvements, such as rail and highway construction,
        have frequently bypassed low-income communities and, instead,
        resulted in environmental hazards and the displacement of homes,
        businesses, and communities. In addition, the jobs created by such
        projects have often not benefited residents of such communities, or
        resulted in the hiring of local construction firms that employ
        Latino workers. NCLR commends the Federal Transit Administration
        for encouraging local transit systems to consider the introduction
        of a variety of improvements to bus service which will improve the
        quality of this lower-cost transportation alternative that
        minorities in many urban communities are far more likely to rely
        upon than other forms of mass transit. Any improvements in services
        should focus on improving cleanliness and safety, reducing
        overcrowding, increasing access to jobs and important centers of
        community life, and addressing language or physical barriers to
        access.
     Take steps to engage and involve Hispanic-serving community-
        based organizations. Community-based organizations are key agents
        providing very important social services to Latino families across
        the Nation. These organizations understand and respond to the needs
        of their local Hispanic constituents. The groups are ideally
        situated to provide guidance on best practices for economic
        development and job creation, as well as serve as a gateway to
        Latino communities for important transportation services, public
        involvement, outreach, and public education.

    Recommendations
        The priorities that the National Council of La Raza has outlined
    are consistent with the historical goal that publicly-funded transit
    systems benefit all communities equitably. In order to address these
    issues, NCLR urges the Members of the Senate Banking Committee to:

     Expand and strengthen the Job Access and Reverse Commute
        program. This program was created to assist poor women on TANF to
        find and keep jobs. It is woefully underfunded, and the need for
        the program is even greater today than when it was created. More
        families on TANF are beginning to reach their time limits, and
        getting to jobs is increasingly urgent for them. Funding levels
        should be doubled to $300 million annually, and the program should
        be further refined to ensure that community-based organizations,
        including many within NCLR's network, that serve needy Hispanic
        families can access these important resources. The share of the
        funding open to a competitive process needs to be expanded
        considerably. Furthermore, technical assistance to community-based
        organizations should be increased to improve the quality of
        transportation services provided by such nontraditional providers.
     Invest in public transportation. Lawmakers should retain a
        uniform ratio of Federal-State investment in new capital capacity
        in public transit and highways, and take steps to encourage,
        perhaps through the use of incentives, increased funding in public
        transportation. Also, proposed new capital capacity projects, for
        example the New Starts program, must not take local or Federal
        funds away from existing public transportation services or
        negatively impact existing resources and communities. In addition,
        special consideration for targeted investment is needed where
        transportation needs are severe, particularly in rural areas with
        new ``emerging'' Latino and immigrant communities, as well as
        especially needy areas along the U.S.-Mexico border.
     Strengthen guidance and implementation regarding language
        policy. While the Department of Transportation's LEP guidance is a
        first step toward ensuring equal access and greater flow of
        appropriate and useful information to Latinos who are limited-
        English-proficient, States need additional support to bridge
        language barriers. Resources should be channeled to States to
        assist them in creating effective language assistance programs, as
        described in the Department's guidance. In addition, the guidance
        should be strengthened to specify thresholds and corresponding
        services to assist recipients of funding from the Department in
        developing and implementing written language assistance plans.
     Advance economic and community development. The Federal
        Government must encourage greater cooperation among transportation
        agencies and agencies from other parts of Government: Workforce
        investment, housing, welfare, etc. A good model of this is the Job
        Access and Reverse Commute program. Furthermore, two provisions can
        promote greater economic and community development in areas where
        Latinos reside. First, States should set aside a portion of their
        Federal highway transportation funds for recruitment, training, and
        supportive services for minorities in the transportation
        construction field. Second, local hiring agreements for communities
        where transportation projects are built can be an effective tool
        for connecting unemployed residents to the workforce, increasing
        job skills, and helping residents earn higher wages.
     Focus on civil rights for minority communities. Due to the
        clear patterns of disparate economic, environmental, and social
        impacts resulting from the historical development of services for
        affluent communities at the expense of low-income and minority
        communities, it is necessary to strengthen legislative language
        around Title VI of the Civil Rights Act of 1964 to clarify that
        individuals have the right to sue States under claims of disparate
        impact. Transportation planning agencies should gather data
        specific to Latino communities with respect to job access and
        environmental justice impacts. Also, any new investment in
        predominantly Latino communities should be culturally sensitive and
        designed to address the needs of these communities and families. In
        addition, clearer performance measures and guarantees of equitable
        transportation investments are needed to ensure that civil rights
        laws are fully enforced, that future projects have more equitable
        outcomes, and that communities can hold transit agencies
        accountable for failing to ensure fair outcomes. Also, a mechanism
        should be developed and implemented to address the needs of
        communities who have been negatively impacted by past projects.
     Strengthen public involvement in planning processes. NCLR
        believes that a minimum expectation for public involvement and
        community control in transportation planning must be established.
        Full disclosure of the annual list of projects by Metropolitan
        Planning Organizations would improve accountability of
        transportation agencies and help local communities better
        understand and be involved in transit plans. The composition of
        Metropolitan Planning Organizations should also be adjusted to
        ensure that low-income and Latino residents can contribute to the
        democratic process of decisionmaking.

        NCLR urges the Committee on Banking, Housing, and Urban Affairs to
    address in a meaningful way the concerns and recommendations that I
    have presented today. I appreciate the opportunity to testify and
    encourage you to call on NCLR as you consider policy proposals related
    to these transit issues.

                       PREPARED STATEMENT OF ROY KIENITZ
                   Secretary, Maryland Department of Planning
                                October 8, 2002

        Mr. Chairman and Members of the Committee, good morning. My name is
    Roy Kienitz, and I am Secretary of the Maryland Department of Planning.
    In addition to my current work, you may recall that I served on the
    staff of the Committee on Environment and Public Works for many years
    working on transportation issues.
        The previous witnesses have done a good job in illuminating the
    transit investment needs presented in the Conditions and Performance
    Report, so I will use my time to speak to the benefits of transit that
    justify its costs, and to specifically refute some of the more commonly
    heard arguments made for reducing our commitment to transit.

    Transit Ridership
        As you have heard, recently released data derived from the 2000
    Census long form show transit usage failing to grow during the 1990's.
    This has been cited as evidence for a number of things, including the
    failure of increasing levels of investment in transit begun around 1994
    to deliver results. This conclusion cannot properly be drawn from this
    evidence for several reasons.

                Figure 1. Net Changes in Transit Ridership and
                           Driving from Previous Year

              1. Other data sources show a markedly different trend.
            Although ridership did decline in the first part of the 1990's,
            thereafter it began to grow at a rate not seen in decades. This
            growth resulted in a 22 percent increase in usage between 1996
            and 2001. In addition, for the first time since reliable data
            has been collected, transit use grew at a faster rate than
            driving for 5 straight years \1\ (See Figure 1.) This data is
            derived from actual counts of paying customers rather than
            self-reporting by a sample of one-sixth of U.S. households.
    ---------------------------------------------------------------------------
        \1\ American Public Transportation Association, National Ridership
    Summaries, 2002 and previous; Federal Highway Administration, Traffic
    Volume Trends Reports, 2002 and previous.
    ---------------------------------------------------------------------------
              2. The Census long form asked respondents to describe only
            their journey to work.\2\ As all transportation professionals
            know, work trips make up only one-fifth of total trips.
            Increasing use of transit for nonwork trips would necessarily
            be missed by this methodology, and probably was.
    ---------------------------------------------------------------------------
        \2\ U.S. Bureau of the Census, Census 2000. Journey to work
    question on the Census 2000 long form read as follows: ``How did this
    person usually get to work LAST WEEK? If this person usually used more
    than one method of transportation during the trip, mark the box of the
    one used for most of the distance.''
    ---------------------------------------------------------------------------
              3. In characterizing their journey to work, respondents were
            told to pick just one mode; specifically, the mode carrying
            them the greatest distance. For most commutes involving a car
            and some other mode, whether through telecommuting 2 days per
            week or using a park-and-ride lot, the car is likely to cover a
            large distance even if the other modes are of equal importance.
            Car trips tend to be longer than transit trips as a general
            rule, and using trip length to characterize a person's main
            mode of travel may unfairly bias the results. Is a 10-mile
            drive inherently more valuable than a 5-mile ride if they
            accomplish the same thing?
              4. Other surveys show much broader use of transit than the
            Census might suggest. The Omnibus Household Survey, a
            nationwide survey of 1,000 households conducted monthly by the
            Bureau of Transportation Statistics, collects data on people's
            travel patterns. This survey shows that many Americans use more
            than one way to get around. While a majority stick to the very
            same mode day in and day out, almost 37 percent complement
            their typical means of travel with a different mode: For
            example, driving for some trips while walking for others.\3\
    ---------------------------------------------------------------------------
        \3\ Bureau of Transportation Statistics, U.S. Department of
    Transportation, Omnibus Household Survey, May 2002.
    ---------------------------------------------------------------------------
     Figure 2. Usage Rates for Various Travel Modes, 2000 Census vs. 2002
                            Omnibus Household Survey

        The Census Bureau reports that less than 5 percent of commuters
    take transit as their usual mode to work; however, the Omnibus survey
    finds that 14 percent of all Americans reported using transit at least
    once for some type of trip in the past month. (See Figure 2.) This
    share climbs to 22 percent when only areas where transit is available
    are counted. This is higher than the number of Americans who fly on a
    commercial airline in the average month--just 11 percent.
        Although different data sources yield different results, the
    overall picture is relatively clear: Prior to 1994, the long-term trend
    in transit use was downward. This trend has since reversed itself
    dramatically.

    Transit and Traffic Congestion
        Another common denunciation of investments in transit is the lack
    of evidence that they have produced measurable reductions in traffic
    congestion. As a factual matter, this statement is largely true. But as
    usual, there's more to the story.

    The Burden of Congestion
        Although the addition of new transit service to an area rarely has
    a major effect on the congestion experienced by those who continue to
    drive, it does reduce the negative impacts of this congestion on the
    region as a whole. This concept is encapsulated by a metric developed
    by the Surface Transportation Policy Project (STPP) called the
    ``Congestion Burden Index.'' \4\ Simply put, this index rates each
    major U.S. metro areas by its Travel Rate Index (a measure of rush hour
    congestion calculated by the Texas Transportation Institute) and the
    degree to which a region's residents avoid this congestion by taking
    transit or other modes. This is illustrated by the following example.
    ---------------------------------------------------------------------------
        \4\ Surface Transportation Policy Project, Easing The Burden, 2001.
    Congestion Burden Index is calculated using the Texas Transportation
    Institute's Travel Rate Index and the share of travelers in each
    urbanized area commuting by car.
    ---------------------------------------------------------------------------
        Both the San Francisco and Detroit urbanized areas have a
    population around 4 million, but congestion is more intense in the San
    Francisco area--the Texas Transportation Institute (TTI) ranked its
    Travel Rate Index (TRI) second in the Nation in its 2001 Report.
    However, more than three times as many people in the Bay Area avoid
    this traffic every day by taking transit than in Detroit. As a result,
    the net effect of this traffic on the region actually ranks 29th out of
    the 68 areas studied by TTI. Detroit, by contrast, ranks 15th in the
    severity of congestion, but third in the burden this congestion imposes
    on the region's people and its economy. This is because such a large
    share of the region's population is subjected to congestion on the
    average day.
     Figure 3. Congestion Severity vs. Congestion Burden, 1999, Detroit MI
                       and San Francisco Urbanized Areas

                               San Francisco, CA           Detroit, MI

    Population                           4,025,000                4,020,000
    Workers Avoiding                       490,000                  119,000
     Traffic
    Workers Stuck in                           76%                      93%
     Traffic
    Rush Hour Traffic Rank                       2                       15
    Congestion Burden Rank                      29                        3

    Are Other Investments Better at Reducing Congestion?
        We cannot dismiss transit because it fails to produce major
    reductions in congestion without first applying this test other
    possible transportation investments. The most popular of these among
    many transit skeptics is additional road building. A longitudinal
    analysis of congestion trends conducted by STPP shows that metro areas
    that have invested heavily in road building have had no more success in
    reducing traffic congestion than those that made relatively few
    investments in new road capacity.\5\
    ---------------------------------------------------------------------------
        \5\ Surface Transportation Policy Project, Easing The Burden, 2001.
    ---------------------------------------------------------------------------
      Figure 4. Change in Road Capacity During the 1990's vs. 1999 Travel
                Rate Index, for Two Sets of U.S. Urbanized Areas

        Figure 4 above compares two groups of cities tracked by TTI. The
    data on the left describe 23 metro areas that expanded road capacity
    per person most rapidly during the 1990's. Road mileage per capita in
    these areas grew by 17 percent during the decade. The data on the right
    describe 23 cities that expanded road capacity the least; road mileage
    per capita actually declined in these areas by 14 percent over the
    decade.
        Regardless of these very different policy choices, traffic
    congestion in the two sets of cities at the end of the decade was
    almost undistinguishable--a TRI of 1.23 for the High Road Building
    cities vs. 1.19 for the Low Road Building cities. In addition, the
    change in rush hour delay over this period, as measured by increases in
    a city's TRI, was similar for both groups, rising 7.2 percent in the
    Low Road Building group and 6.5 percent in the High Road Building
    group.

    Transit Costs Money, But So Does Not Having Transit
        Public sector spending for transportation is a minority of total
    transportation spending. Household and business spending dwarfs
    government spending by almost five to one. For many years,
    transportation was the third largest category of expenditures in the
    average household budget, behind shelter and food. In recent years,
    however, transportation surpassed food to become the second largest
    household expense. The Commerce Department's Consumer Expenditure
    Survey shows that transportation consumes 18 percent of the average
    family's budget. (See Figure 5.)
           Figure 5. Major Categories of Household Expense, 1998-1999

    Families with Few Travel Choices Face Higher Costs
        Household transportation costs are not the same for everyone. They
    vary widely by region, and this variation is heavily influenced by
    access to good quality transit service. Among major U.S. metro areas,
    family costs are highest in Atlanta, Houston, and other sprawling
    cities with low transit usage rates. Families in these two areas spend
    nearly 22 percent of their budgets on transportation. By contrast,
    costs are low in New York, Chicago, and other cities with greater
    travel choices. Families in these two areas spend less than 15 percent
    of their household budgets on transportation.\6\ (See Figure 6 for a
    ranking of major cities.)
    ---------------------------------------------------------------------------
        \6\ U.S. Department of Commerce, 1998-1999 Consumer Expenditure
    Survey, as reported in Driven To Spend, Surface Transportation Policy
    Project, 2000.
    ---------------------------------------------------------------------------
               Figure 6. Household Transportation Expenditures,
                      Major U.S. Metropolitan Areas, 1998

        These benefits are not entirely free. In metro areas with large
    transit systems, such as New York, families do pay higher taxes to
    support these systems, and some of these taxes are not counted by the
    Consumer Expenditure Survey as transportation expenditures. But these
    taxes do not come close to outweighing the almost $2,900 in annual
    savings the average New York areas family achieves when compared to the
    average Houston area family.
        In the New York metro area, public spending on transit in 1998
    amounted to about $5.1 billion, or $655 per household. It was just $413
    million in Houston, or $250 per household. In New York, transit costs
    taxpayers about $400 per household per year more than it does in
    Houston, but even after accounting for this difference, Houston
    families are still paying $2,500 more per year for transportation, even
    when the full cost of transit is included.
    Poor Families Are Hit Hardest By High Transportation Costs
        Car ownership can often be a cruel poverty trap. Owning even an old
    car can be expensive, and transportation costs can become a heavy
    burden for low-income families, particularly when investments have not
    been made in transit and reliable service is not available.
       Figure 7. Household Transportation Costs, as a Share of After Tax
          Income, by Income Quintile, 1998-1999 (Excludes Air Travel)

        As Figure 7 above shows, families in the lowest income quintile
    spend as much as 36 percent of the take-home income on transportation,
    a higher share than any other income group.\7\ Most of this money is
    spent on the car. The average car costs over $6,000 per year to own and
    operate,\8\ but even the oldest car can cost $3,000 per year in
    insurance, fuel, repairs, and many other miscellaneous expenses. By
    contrast, transit costs are much lower, usually $800 to $1,500 per
    worker per year. On a fixed income, this can be the difference between
    staying in poverty and finding a better life.
    ---------------------------------------------------------------------------
        \7\ Ibid.
        \8\ American Automobile Association.
    ---------------------------------------------------------------------------
    Regions That Invest in Transit Spend Less Overall
        Our current level of spending on transportation, when both
    governmental and nongovernmental costs are accounted for, is high both
    by historical standards and when compared to other industrialized
    countries. One multiyear study found that the share of Gross Regional
    Product (GRP) spent on passenger transportation in U.S. metro areas is
    75 percent higher than in European metro areas, and more than double
    that of wealthy Asian metro areas. \9\
    ---------------------------------------------------------------------------
        \9\ Newman and Kenworthy, An Inernational Sourcebook of Automobile
    Dependency In Cities, 1960 -1990.
    ---------------------------------------------------------------------------
      Figure 8. Highway Supply and Transit Serivce Per 1,000 Persons vs.
            Gross Regional Product Spent on Passanger Transportation

        These differences have many causes, but public investment in
    transit is a major factor. Figure 8 compares three Great Lakes cities
    that have taken different paths with regard to transit investments.\10\
    By restricting this comparison to only North American cities, we can be
    confident that factors such as high gasoline prices in Europe and Asia
    do not influence the results.
    ---------------------------------------------------------------------------
        \10\ Surface Transportation Policy Project, Driven To Spend, 2000.
    ---------------------------------------------------------------------------
        Of these three areas, the Detroit metro region has invested least
    in transit, and it uses a relatively high 15 percent of its Gross
    Regional Product (GRP) on passenger transportation. Chicago, with an
    extensive rail system, robust bus service, and relatively fewer road
    miles per person, uses only 12 percent of its GRP on passenger
    transportation.
        In contrast to both U.S. cities, Toronto has invested major
    resources in a wide variety of rail and bus services, while building
    relatively few roads. (Toronto was the site of major antifreeway
    protests in the 1970's that led to cancellation of several major
    freeway segments and the shifting of highway funds to new rail
    service.) As a result, it spends a very low 7 percent of its GRP on
    passenger transportation.
        Because of the choices that this area has made about
    transportation, both its citizens and its governments have money
    available to spend on other things, from education to health care to
    entertainment to housing. Too many U.S. regions do not have this
    option.

    The Policy Choice Before Us
        The transit skeptics make a convincing case that transit is not now
    and is not likely to become a dominant mode of travel in the United
    States. This is true. However, this fact does not resolve the question
    of where the next dollar of public funds should go. Because we have
    made massive public investments in the county's highway system, each
    additional dollar spent to expand this system still further delivers
    relatively fewer benefits than the investments made in earlier years.
    By contrast, in most areas of the county our transit systems are small
    by comparison, and the marginal benefit of adding service can still be
    high.
        Further, we must recognize not just the cost of transit, but the
    opportunity cost of not providing it. When broader social costs are
    considered, transit is a bargain.

    Conclusions
        The broad range of publicly available data relating to the costs
    and benefits of transit allows us to draw the following conclusions.
        1. After years of decline, transit ridership began a period of
    rapid growth in the mid-1990's. In the last 5 years, transit use has
    grown 22 percent while driving grew just 11 percent, an unprecedented
    reversal of the pattern seen for more than a half-century.
        2. This period of growth coincides with a period of increased
    investment in transit due in large part to the reforms adopted in ISTEA
    and continued in TEA-21.
        3. These public investments are reducing the burden that congestion
    places on our major metropolitan areas by giving more people the chance
    to avoid congestion.
        4. Because we failed to invest adequately in transit for many
    decades, our families and businesses are forced to spend heavily on
    transportation
        5. These high transportation costs hit poor families the hardest.
        6. Good transit service costs money, but this cost is offset by its
    many benefits. And it is far less than the costs we will be forced to
    continue bearing if further investments in transit are not made.
        Mr. Chairman, thank you for this opportunity to appear before the
    Committee.

                                   ----------
                      PREPARED STATEMENT OF DAVID WINSTEAD
        Chairman, Transportation Coalition, Maryland Chamber of Commerce
                   On behalf of the U.S. Chamber of Commerce
                                October 8, 2002

        Mr. Chairman, Ranking Member Gramm, Members of the Committee, thank
    you for allowing me to appear before you today to discuss the
    importance of transit in our Nation's rural and urban areas. I am David
    Winstead, Chairman of the Transportation Coalition at the Maryland
    Chamber of Commerce. I appear before the Committee on behalf of the
    U.S. Chamber of Commerce, which is the world's largest business
    federation representing more than three million companies and
    organizations of every size, sector, and region. My testimony will
    address the importance of a national, seamless transportation network
    that meets the mobility needs of moving people in urban and rural
    areas.

    The Importance of Transportation Infrastructure Investment
        For the Nation and for the State of Maryland, investment in our
    Nation's transportation system is critical to our future economic
    growth, international competitiveness, quality of life and national
    security. Our transportation system has supported the Nation's strong
    economic performance. Our "just-in-time" supply chain mindset demands
    that we move our people and freight faster than any country in the
    world. Unfortunately, our transportation infrastructure system is ill-
    prepared to handle the higher and higher volumes of people and freight.
        Public transportation is taking on an increasingly important role
    in America's multimodal transportation network. Americans used public
    transportation a record 9.5 billion times in 2001, and transit
    ridership has grown 23 percent since 1995. This represents the highest
    level in more than 40 years. Over the last 6 years, transit use has
    grown faster than population growth. Fourteen million Americans use
    public transportation every day and 25 million people use transit on a
    regular basis. Supplementing commuter rail, the passenger and intercity
    bus industry serves more than 4,000 communities directly with scheduled
    service.
        These ridership gains are directly attributable to the significant
    Federal investments in public transportation made in the Transportation
    Equity Act for the 21st Century (TEA-21), as well as the guaranteed
    funding under TEA-21. TEA-21 authorized $41 billion for public
    transportation, and guaranteed $36 billion, a significant increase over
    the previous Intermodal Surface Transportation and Efficiency Act
    (ISTEA) authorization. Investments have been made nationwide for bus
    capital; modernization, upgrade, and replacement of capital facilities;
    rural public transportation; and specialized services. These TEA-21
    funds have supported a renaissance in public transportation ushering in
    a new era of interconnected transportation services and facilities.

    Projects that are Making a Difference
        In Maryland, TEA-21 authorized $120 million for the Baltimore
    Central Light Rail Double Track Project. This is a vital project for
    the city of Baltimore and surrounding counties. Construction for the
    Light Rail project is underway and will be completed by Spring 2006.
        In Washington State, TEA-21 funds are being used for the Sound
    Transit's Central Link, a 24-mile light rail system slated to open in
    2006. The light rail system will link Sea-Tac Airport to Seattle's
    University District via the city's business district. Central Link is a
    crucial element of a regional mass-transit system approved by voters,
    including express buses, commuter trains, HOV lanes, park-and-ride
    lots, and transit centers throughout the central Puget Sound area.
        Dallas also has benefited from TEA-21 investments. Carrying nearly
    40,000 riders daily, the Dallas Area Rapid Transit (DART) light rail
    system has been one of the fastest growing in the Nation. To meet
    current and projected demand, DART has begun building extensions to
    suburban Garland and Plano. The new lines, secured with a Federal Full
    Funding Grant Agreement, will add 23 miles, more than doubling the
    existing system.

    Public Transportation Pays Off
        Across America, the investment in public transportation is paying
    off. For each $1 billion in Federal capital funds, 47,500 jobs are
    created and businesses experience a $3 billion gain in sales.
    Transportation accounts for approximately 17 percent of our Gross
    Domestic Product, and for American families transportation represents
    18 percent of their household spending, the second largest household
    expenditure after housing.
        Without a strong TEA-21 program, we will feel the consequences of a
    sub par system--congestion, decreased productivity, more accidents, and
    diminished quality of life. The cost of road congestion to the U.S.
    economy was nearly $78 billion in 1999--more than triple what it was 20
    years ago!

    Funding Requirements Not Meeting Demand for Public Transportation
        U.S. Department of Transportation (DOT) data show that a minimum
    $50 billion per year Federal investment to improve and maintain the
    current physical conditions to meet the demands of the Nation's
    highways and bridges. DOT estimates that $20.6 billion in capital
    investment is needed annually just to maintain and improve current
    public transit services. Inflated to 2003 dollars, and using ridership
    estimates consistent with current experience, brings that number into
    the $30 billion range. Indeed, the American Association of State
    Highway and Transportation Officials (AASHTO) ``Bottom Line'' Report
    indicates an annual transit need of $43.9 billion to improve the
    transportation system. We currently spend $7 billion a year. To meet
    these current challenges, we must invest our limited resources in a
    better, more efficient manner. We must look at innovative financing and
    public-private partnerships to supplement the Federal user fee system.

    Americans for Transportation Mobility
        Last summer the U.S. Chamber helped launch a new coalition called
    Americans for Transportation Mobility, or ATM. ATM is a broad-based
    organization of transportation users and providers, State and local
    organizations, and State and local government officials. The coalition
    has more than 350 organizations whose objective is simple: To build
    public and political support for a safer and more efficient
    transportation system. We hope to achieve our objective through a two-
    pronged approach: (1) Ensuring that Congress fully dedicates Federal
    transportation trust fund revenues for their intended purpose; and (2)
    accelerate the project review process by removing redundancies. All the
    money in the world will not help if we are not efficient in the
    planning and approval for much-needed improvement projects.
        For the first time, the business and labor communities have joined
    together in educating lawmakers on the importance of improved mobility
    and safety to future economic growth. Without meeting the mobility
    needs for the movement of people and goods, our Nation will not achieve
    the economic success and quality of life it demands. The ATM coalition
    looks forward to working with this Committee in ensuring that adequate
    investments are made over the next several years in our transportation
    network.

    Chamber's TEA-21 Reauthorization Policy Principles
        Over the past year, the U.S. Chamber's Transportation and Logistics
    Committee has formulated its TEA-21 reauthorization policy principles.
    A copy of our nine-point agenda is attached. The Chamber strongly
    advocates that TEA-21 reauthorization recognize the multimodal nature
    of the Nation's transportation network and strive to improve mobility
    and competitiveness within the network.
        The Highway Trust Fund has a significant unobligated balance of $20
    billion that is not being spent for transportation projects. Our Nation
    needs to spend all revenues collected into the Highway Trust Fund for
    surface transportation investment and look at public-private
    partnerships where feasible and equitable. The Federal Government
    collects user revenues into the Highway Trust Fund for transportation
    infrastructure maintenance and improvements. With our Nation continuing
    its economic recovery, now is the time to utilize the unobligated
    balance to ensure the safety and security of our Nation's
    transportation system, as well as prevent the unnecessary loss of
    family wage jobs.
        Furthermore, we need to find ways to accelerate project delivery
    once the decision is made to maintain and to improve our transportation
    infrastructure. Due to the complicated permit review process; it takes
    an average of 10 years to complete the permit process for a new transit
    project. We want to see the permit process streamlined so that there
    will not be repeated delays in construction of our public transit
    system.
        During reauthorization of TEA-21, we will advocate that all
    transportation fuel taxes should be placed to the Highway Trust Fund
    that was set up to pay for the maintenance and improvement of the
    system. The U.S. Chamber believes that ethanol should be taxed at the
    same rate as gasoline and that the 2.5 cents per gallon of the ethanol
    tax that is currently paid into the General Fund should be transferred
    to the Highway Trust Fund with an 80/20 split into the Mass Transit
    Account. That is why it is of critical importance to ensure the
    investment of all Highway Trust Fund revenues into much needed surface
    transportation programs.
        The Chamber will continue to review various proposals that could
    provide additional resources to the surface transportation program. We
    must fully utilize all current funding mechanisms before looking at new
    funding options but the Chamber's overall priority is to have the
    Federal Government invest in a surface transportation system that meets
    the demands placed by both business and the public at large.
        The Chamber also will continue to support the distribution of
    revenues collected into the Highway Trust Fund at 80 percent for
    highways and 20 percent for transit. We believe this is a fair and
    equitable way to distribute the Highway Trust Fund revenues and would
    oppose any change in this distribution.

    Fiscal Year 2003 Transportation Appropriations
        We applaud the Senate Appropriations Committee that has recently
    approved a Fiscal Year 2003 Transportation Appropriations bill that
    would fund transit at record levels. The Senate Appropriations
    Committee also fully restored a proposed $8.6 billion reduction to the
    Federal highway program. Restoring the highway funding to the current
    fiscal year 2002 level of $31.8 billion is important as many States
    chose to flex some program funds for transit programs. In fact, more
    than $1 billion in highway program funds has been flexed to transit
    programs in each of the last 6 years. We urge this Committee to support
    fully funding the public transit programs, as well as restoring the
    Federal highway program funding to $31.8 billion. A full restoration is
    critical to ensure continued strong growth in the surface transpor-
    tation program and to serve as the baseline for TEA-21 reauthorization.

    Conclusion
        In closing, the U.S. Chamber will continue to advocate increased
    spending on transportation infrastructure and streamlining of
    environmental review process. We will play an active and aggressive
    part in advancing a transportation agenda that strengthens our national
    transportation system. We are living in a new world that requires new
    thinking and approaches to transportation that should be characterized
    by changed behaviors and measurable results. We will remind the public
    and Congress that infrastructure is not disposable--it is a strategic
    asset that must be renewed and protected.
        The impact of doing nothing will be increased congestion, decreased
    safety on our roads, and setbacks in our ability to improve air
    quality. The U.S. Chamber and chambers throughout the Nation look
    forward to working with Congress and the President to bring about
    continued, predictable investment in our Nation's transportation system
    in TEA-21 reauthorization. Investment in our national transportation
    system will ensure we remain a leader in the global marketplace.
        Thank you, and I am happy to answer your questions.

    RESPONSE TO WRITTEN QUESTION OF SENATOR SARBANES FROM JENNIFER
                                L. DORN

    Q.1. Administrator Dorn, in your response before the Committee,
    you indicated that annual capital investment needs for rural
    operators over the next 20 years are estimated to be $241
    million to maintain the conditions and performance of those
    systems. What is the estimated cost to improve conditions and
    performance of rural operators? I am also interested in knowing
    how these estimates were generated. Does the Federal Transit
    Administration regularly collect data on rural ridership,
    vehicle conditions, service areas, and other relevant measures?
    If not, what is the basis for the estimate of rural needs?

    A.1. The capital investment requirements for rural operators
    are estimated to be $782 million in 2000 dollars to improve
    conditions and performance to an average level of ``good.'' FTA
    does not regularly collect data on rural ridership, vehicle
    condition, and other pertinent measures. For this report, FTA
    uses data on rural transit collected through surveys by the
    Community Transportation Association of America (CTAA). The
    most recent survey was in 2000; the previous survey was
    conducted in 1994. These data include the number and age of
    rural transit vehicles, according to vehicle type, such as
    buses classified according to size or vans.
        Investment requirements for rural areas presented in the
    current Conditions and Performance Report were based on the
    data collected by CTAA in 2000. Requirements were determined by
    estimating the number of vehicles that will need to be replaced
    in each year over the 20-year investment period, and
    multiplying the total number of vehicles in each category by an
    estimated average vehicle purchase price. Average purchase
    prices were based on information reported to FTA by transit
    operators for vehicle purchases made between 1998 to 2000.
        The number of rural vehicles that will need to be purchased
    to maintain or improve conditions is calculated by dividing the
    total number of each type of vehicle by its replacement age,
    with different assumptions made about the replacement ages
    required to maintain or improve conditions. The replacement age
    to maintain conditions is assumed to be higher than the
    industry recommended replacement age because surveys have
    revealed that transit vehicles are often kept beyond their
    recommended useful life. The maintain conditions replacement
    age is calculated by multiplying the industry recommended
    replacement age for each vehicle type by the ratio of the
    average age to the industry recommended age of large buses. The
    replacement age to improve conditions is assumed to equal the
    industry-recommended replacement age.
        The improve conditions scenario also assumes additional
    vehicle purchases in the first year to eliminate the backlog of
    overage vehicles. The number of vehicles necessary to improve
    performance was estimated by increasing fleet size by an
    average annual rate 3.5 percent over the 20-year projection
    period. The 1994 study by CTAA, and more recent studies
    examining rural transit investment requirements in five States,
    identified considerable unmet rural transit needs in areas
    where there is either no transit coverage or substandard
    coverage. The assumed 3.5 percent growth to fulfill these unmet
    rural investment requirements is less than half the 7.8 percent
    average annual increase in the number of rural vehicles in
    active service between 1994 and 2000, but is believed to be
    sufficient since the population of rural areas is declining.
    Between 1990 and 2000, the population in areas with less than
    50,000 inhabitants decreased by 3.4 percent.

             RESPONSE TO WRITTEN QUESTIONS OF SENATOR REED
                         FROM JENNIFER L. DORN

    Q.1. You mention in your testimony that the level of State and
    local investment in transit has increased. Do you believe that
    growth is due to the sizable increase in Federal funding
    available for transit and would local and State investment
    continue to grow if the Federal Government reduced its funding
    levels?

    A.1. The absolute level of State and local investment in
    transit has increased, along with the absolute level of
    investment by the Federal Government. Furthermore, State and
    local funding for capital investment grew at a more rapid rate
    (9.7 percent average annual increase) than Federal funding for
    capital investment (5.0 percent average annual increase)
    between 1990 and 2000. However, the Conditions and Performance
    Report provides no basis on which to determine whether the
    increase in Federal funding contributed to an increase in both
    State and local funding. Further, we have no basis on which to
    predict the effect of a hypothetical decrease in Federal
    funding on State and local investments in transit. We believe,
    however, that the growth in local capital investment is a
    strong indicator of the community awareness of the benefits of
    public transportation.

    Q.2. The Conditions and Performance Report uses a 1.6 percent
    annual growth to develop its funding need. What would
    investment needs be if you assumed a rate of growth similar to
    that experienced over the life of TEA-21?

    A.2. Passenger miles traveled (PMT) on transit were 40.1
    billion in 1997, 41.6 billion in 1998, and 45.1 billion in
    2000. The average annual increase in PMT over this period was
    about 4 percent. (Data for 2001 is not yet available.)
        If PMT were to increase by 4 percent annually between 2001
    and 2020, the average annual transit investment requirements
    would be $22.5 billion to maintain conditions and performance
    and $28.1 billion to improve conditions and performance.

    Q.3. In response to a question from Chairman Sarbanes regarding
    ``New Starts'' matching requirements, you mentioned that on
    average both highway and transit capital projects receive 50
    percent of their funding from the Federal Government and 50
    percent from the localities and States. Could you provide the
    Committee with the specific source or analysis behind that
    claim?

    A.3. As of Spring 2002, there were 30 projects under full
    funding grant agreements with an aggregate cost of $19.2
    billion; the aggregate Federal commitment to these projects is
    $9.46 billion (46 percent). According to the National Transit
    Database, a data source for the upcoming Conditions and
    Performance (C&P) Report, in 2000 Federal funding for transit
    capital expenditures was $4.3 billion (47.2 percent of the
    total) and the State and local funding $4.9 billion (52.8
    percent of the total)?
        According to Highway Statistics 2000, also used for the C&P
    Report in 2000, the Federal Government contributed $25.8
    billion to highway capital outlay (39.9 percent of the total
    capital outlay) and State and local governments contributed
    $38.9 billion (60.1 percent of the total capital outlay).

    STATEMENT OF THE AMERICAN ROAD AND TRANSPORTATION BUILDERS ASSOCIATION
                                    (ARTBA)

    President Ronald Reagan Radio Address to the Nation on Proposed
    Legislation for a Highway and Bridge Repair Program November 27, 1982
              ``One of our great material blessings is the outstanding
            network of roads and highways that spreads across this vast
            continent. Freedom of travel and the romance of the road are
            vital parts of our heritage, and they helped to make America
            great. Four million miles of streets and roads make it possible
            for the average citizen to drive to virtually every corner of
            our country--to enjoy America in all its beauty and variety.
            They also form a vital commercial artery unequaled anywhere
            else in the world.
              ``Our interstate system has reduced by nearly a day and a
            half the time it takes to drive coast to coast. And more
            efficient roads mean lower transportation costs for the many
            products and goods that make our abundant way of life possible.
            But let's face it: Lately, driving isn't as much fun as it used
            to be. Time and wear have taken their toll on America's roads
            and highways. In some places the bad condition of the pavement
            does more to control speed than the speed limits.
              ``We simply cannot allow this magnificent system to
            deteriorate beyond repair. The time has come to preserve what
            past Americans spent so much time and effort to create, and
            that means a nationwide conservation effort in the best sense
            of the word. America can't afford throwaway roads or disposable
            transit systems. The bridges and highways we fail to repair
            today will have to be rebuilt tomorrow at many times the cost.
              ``So I am asking the Congress when it reconvenes next week to
            approve a new highway program that will enable us to complete
            construction of the interstate system and at the same time get
            on with the job of renovating existing highways. The program
            will not increase the Federal deficit or add to the taxes that
            you and I pay on April 15th. It'll be paid for by those of us
            who use the system, and it will cost the average car owner only
            about $30 a year. That is less than the cost of a couple of
            shock absorbers. Most important of all, it'll cost far less to
            act now than it would to delay until further damage is done. .
            .
              ``Common sense tells us that it'll cost a lot less to keep
            the system we have in good repair than to let it crumble and
            then have to start all over again. Good tax policy decrees that
            wherever possible a fee for a service should be assessed
            against those who directly benefit from that service. Our
            highways were built largely with such a user fee--the gasoline
            tax. I think it makes sense to follow that principle in
            restoring them to the condition we all want them to be in.
              ``So, what we're proposing is to add the equivalent of 5
            cents per gallon to the existing Federal highway user fee, the
            gas tax. That hasn't been increased for the last 23 years. The
            cost to the average motorist will be small, but the benefit to
            our transportation system will be immense. The program will
            also stimulate 170,000 jobs, not in make-work projects but in
            real, worthwhile work in the hard-hit construction industries,
            and an additional 150,000 jobs in related industries. It will
            improve safety on our highways and will make truck
            transportation more efficient and productive for years to come.
              ``Perhaps most important, we will be preserving for future
            generations of Americans a highway system that has long beeb
            the envy of the world and that has truly made the average
            American driver king of the road. . .''

    Introduction
        Thank you very much for providing the American Road and
    Transportation Builders Association (ARTBA) an opportunity to submit
    testimony on public transportation investment needs and to present its
    recommendations for the reauthorization of the Federal highway and mass
    transit programs.
        ARTBA marks its 100th anniversary this year. Over the past century,
    its core mission has remained focused on aggressively advocating
    Federal capital investments to meet the public and business community's
    demand for safe and efficient transportation. The transportation
    construction industry ARTBA represents generates more than $200 billion
    annually to the Nation's Gross Domestic Product and sustains more than
    2.5 million American jobs. ARTBA's more than 5,000 members come from
    all sectors of the transportation construction industry. Thus, its
    policy recommendations provide a consensus view.
        ARTBA has long recognized public transportation as an integral and
    vital component of the Nation's surface transportation system. Transit
    programs play a critical role in improving the Nation's economy,
    quality of life, and mobility. In order to continue the improvements
    that have been made under ISTEA and TEA-21 and to meet performance
    goals for the overall surface transportation system, dramatic increases
    in Federal transit capital construction investment are needed.
        ARTBA believes the Federal role in mass transit program financing
    should be limited to design and construction of transit facilities.
    Other transit investments, for rolling stock, maintenance and
    operations, are more appropriately the responsibility of State and
    local governments. For this reason, we believe the provision of law
    that encourages systems to ``capitalize'' maintenance activities should
    be eliminated. It simply transfers scarce resources away from critical
    modernization, rehabilitation, and development activities.
        Federal Transit Administrator Jenna Dorn told the Committee this
    morning that an average annual investment of $14.84 billion in 2000
    dollars by all levels of government would be needed during the next 20
    years just to maintain transit conditions and performance. In recent
    years, the Federal transit program accounted for about half of all
    transit capital investment. This implies that a Federal transit program
    during the next 6 years averaging $7.4 billion per year would be
    sufficient to maintain transit conditions and performance.
        There are a number of reasons why this figure greatly understates
    the required Federal investment in mass transit during the next 6
    years.
        The figure is stated in year 2000 constant dollars. Planning a
    future investment requires taking into account projected future
    inflation, which will add significantly to the investment required. The
    U.S. Government Budget for fiscal year 2003 estimates the inflation
    rate will be 2.4 percent per year for the rest of this decade.
        While the Federal transit program accounts for half of transit
    capital investment, capital investment represents only a fraction of
    total transit funding. One out of every four Federal transit dollars is
    used for noncapital purposes, such as operating subsidies in small
    communities, FTA administrative expenses and research. When computing
    the appropriate size of the Federal transit program, these additional
    funds must be taken into account.
        When these two factors are applied to identified transit capital
    investment requirements, the result is the need for a Federal transit
    program that averages almost $11 billion over the 6-year period fiscal
    year 2004-2009.
        It is important to understand that the U.S. DOT Conditions and
    Performance Report applies to existing mass transit systems. It does
    not address the need for new systems. The demand for new fixed guideway
    transit systems is enormous and is growing. There are dozens of
    projects moving through the new starts evaluation process, many
    receiving ``recommended'' or even ``highly recommended'' status, yet
    there is no available Federal funding. A Federal mass transit program
    that focuses solely on maintaining existing conditions and performance
    would gravely underfund transit needs.
        Finally, the model used in this report assumes a ``modest'' 1.6
    percent annual ridership increase. This figure does not keep pace with
    recent trends in transit passenger miles, and does not reflect data
    contained in the Executive Summary to the 2002 U.S. DOT Conditions and
    Performance Report. The summary found an increase in transit passenger
    miles of 24.5 percent between 1993 and 2000, which is an average of
    about 3 percent annually--nearly double the ridership projections
    contained in the report. The model's projected ridership growth is also
    inconsistent with the findings of the American Association of State
    Highway and Transportation Officials (AASHTO) in its recently released
    ``Bottom Line Report.'' AASHTO found ridership has been growing at 3.5
    percent annually.
        The AASHTO Report also found that--assuming 1.6 percent per year
    ridership growth--$18.9 billion would be needed annually from 2004 to
    2009 to maintain the transit system. This is $4.1 billion more per year
    than the Conditions and Performance Report's stated need just to
    maintain transit.
        These discrepancies suggest the investment scenarios and
    requirements contained in 2002 U.S. DOT Conditions and Performance
    Report are significantly understated.

    Existing Revenue Options
        Financing a $60 billion Federal highway program and a $14 billion
    mass transit program will require more revenues than highway users are
    currently projected to pay into the Highway Trust Fund during the next
    6 years. Based on information such as current highway user fees,
    expected population growth, number of drivers, vehicle miles traveled
    and other factors, the Congressional Budget Office and the U.S.
    Department of the Treasury currently project that revenues into the
    Highway Trust Fund Mass Transit Account will grow from $4.5 billion in
    fiscal year 2004 to $5.5 billion in fiscal year 2009. Projected revenue
    growth between now and fiscal year 2009 will thus be far less than
    needed to meet mass transit investment requirements during the next 6
    years.
        Nearly 2 years ago, ARTBA proposed a number of options for
    enhancing Highway Trust Fund revenues. These include: Spending down the
    current cash balance; indexing the motor fuels excise taxes for
    inflation; crediting interest on the Highway Trust Fund balances;
    eliminating fuel tax evasion; and expanding innovative financing
    programs. If all of these revenue enhancements were enacted by
    Congress, revenues would still be far below the level necessary to meet
    the projected needs.

        Whether Congress will, in fact, adopt any, or all, of these options
    is at this point a matter of conjecture.
        What is abundantly clear is that a minimally adequate Federal
    highway and mass transit investment after TEA-21 will require
    significant new revenues, beyond these options.
        The main sources of funds for Federal highway and mass transit
    investment are the fees paid by highway users in the form of excise
    taxes on motor fuels--gasoline, diesel fuel, and gasohol. Each penny of
    the motor fuels excise taxes currently generates over $1.7 billion per
    year, with about $1.4 billion being deposited into the Highway Account
    of the Highway Trust Fund and $350 million deposited into the Mass
    Transit Account.
        ARTBA has endorsed an increase in highway user fees as needed to
    maintain current structural, safety and traffic mobility conditions on
    the Nation's highways, bridges, and transit systems. But highway users
    should not be asked to pay any more than absolutely necessary. The
    proposal we have outlined here is designed to provide the necessary
    level of Federal highway and mass transit investment during the next 6
    years at the minimum cost to highway users
    ``Two Cents Makes Sense''--A Funding Proposal to
    Meet the Investment Requirements Outlined by the
    U.S. Department of Transportation, AASHTO, and APTA
        On July 16, 2002, ARTBA announced a needs-based financing proposal
    for TEA-21 reauthorization--``Two Cents Makes Sense.'' The financing
    plan is a refinement of the funding recommendations ARTBA published in
    March 2001.
        The ``Two Cents Makes Sense'' plan would provide the revenue stream
    necessary to double the annual Federal investments in highways--to $60
    billion--and mass transit--to $14 billion--by fiscal year 2009. This
    proposal is the only one currently being discussed that would grow
    Federal highway and public transportation investment during the next
    authorization period to the level the U.S. Department of Transportation
    (USDOT), the American Association of State Highway and Transportation
    Officials (AASHTO) and the American Public Transportation Association
    (APTA) Report is the minimum needed just to maintain current safety,
    traffic congestion, and structural conditions.
        The ``Two Cents Makes Sense'' plan would provide steady,
    predictable, and manageable Federal highway program increases--in $5
    billion increments--from $35 billion in fiscal 2004 to $60 billion in
    fiscal 2009. Federal transit investment would increase under our
    proposal by $2 billion in fiscal year 2004 and then $1 billion annual
    increments. This would be achieved through:

     more efficient cash management of Highway Trust Fund (HTF)
        revenues; and
     a small, annual adjustment in the Federal motor fuels excise
        user fee rate to assure the revenue stream necessary to cover the
        Government's cash outlay in that year for the highway and transit
        programs.

        Our proposal is a logical evolution of the concept embraced by
    Congress in TEA-21 of directly linking annual highway investment to the
    user fee revenue stream.
        Under our proposal, the TEA-21 budget firewalls and protections
    would be maintained. This would include annual funding guarantees in
    the authorization legislation and the budgetary protections for the
    highway and mass transit programs, including the separate budget
    categories and the point of order in the House Rules that can be raised
    against legislation that would reduce the guaranteed funding.
    More Efficient Cash Management of Highway Trust Fund Revenues
        Under TEA-21, as has been the case for several decades, the Federal
    Government has been collecting more highway user revenue each year than
    it actually needs to pay the annual bills--or outlays--for the highway
    and transit programs. As a result, this money is being ``warehoused''
    for a number of years before it is actually spent. That's why the trust
    fund balance continues to balloon. Here's how it happens:
        Based on years of analysis, the White House Office of Management &
    Budget and the Congressional Budget Office have determined Federal mass
    transit funds spend out over an average of 6 years. This spend out rate
    is unique among Federal programs. Unlike the case with virtually every
    other Federal program, of every dollar obligated during a fiscal year
    for the Federal transit capital grants program, only 8 cents will
    actually have to be paid out of the HTF Mass Transit Account during the
    first year. The next year, 25 cents will be paid, followed by 25 cents
    the third year, 20 percent in the fourth year, 17 percent the fifth
    year, and 5 percent the sixth year. (See Figure 3.)

        This ``lag'' between collection of user fee revenue from motorists
    and truckers to actual complete spend out of those revenues causes the
    significant annual growth in the Highway Trust Fund balance. Absent
    changes, the Highway Trust Fund's Highway Account balance would grow
    steadily through fiscal year 2010.
        ARTBA proposes to correct this inefficient money management by
    returning the Federal highway program to a true ``pay-as-you-go''
    approach.
    Returning to a True ``Pay-As-You-Go'' Approach
        In the reauthorization, Congress would set annual investment
    targets to work toward accomplishing needs-based performance results.
    Under our proposal, Federal mass transit investment would double by
    fiscal year 2009. Once these authorization levels are established, the
    Congressional Budget Office would determine the annual cash outlay
    needed to fund the new authorization, plus remaining past
    authorizations.
        The reauthorization legislation would also include authority for an
    annual adjustment of the Federal motor fuels user fee excise rate to
    produce the amount of revenue to the HTF needed to meet the highway and
    transit program cash outlays for the year. This adjustment would have
    two parts: (1) a base adjustment to protect that purchasing power of
    the highway and transit programs that would be linked to the annual
    Consumer Price Index (indexing); and (2) depending on U.S. Treasury
    revenue projections for the Highway Trust Fund from all sources during
    the upcoming year (for example, could include possible recapture of
    ethanol revenues, interest on the trust fund, prudent use of the
    existing HTF balance, revenues from innovative financing) an adjustment
    in the motor fuels rate above indexing that is necessary to provide the
    revenue needed to meet the outlay target.
        By implementing these recommended changes, it is possible to
    increase Federal highway and transit investment significantly without a
    large, one time increase in the motor fuels excise user fee rate (which
    would also exacerbate the HTF balance build up just discussed).
        Funding the annual authorizations we have proposed, would, with
    implementation of the changes we have recommended, require at most an
    annual adjustment of the Federal motor fuels excise user fee rate of
    2.2 cents per gallon. Approximately one-half cent of that increase
    would be the result of indexing to the CPI. If the HTF revenue stream
    were enhanced by redirection and equitable taxation of ethanol, use of
    the existing HTF balance, more revenues due to a robust economy--any or
    all--the annual adjustment in the motor fuels excise user fee rate
    would be lower than 2.2 cents per gallon (including indexing)! (See
    Figure 4.)

    Revenue RABA Provision: An Approach that Eliminates Current RABA
    Political and Program Planning Problems
        The ``Two Cents Makes Sense'' proposal would also replace the TEA-
    21's RABA (Revenue Aligned Budget Authority) adjustment with a
    ``Revenue RABA Provision.'' The necessary user fee increases in Figure
    3 were calculated using the most recent Highway Trust Fund projections
    by the U.S. Department of Treasury and the Congressional Budget Office.
    When TEA-21 is reauthorized, new calculations, based on the then
    current data, may indicate user fee increases slightly higher or lower
    than those in Figure 3.
        Under a ``Revenue RABA Provision,'' if revenues into the HTF during
    any given fiscal year were to fall short of outlays, then the following
    year the statutory motor fuels excise user fee rate would be
    automatically allowed (or certified) to increase by the amount required
    to offset the deficit and make the trust fund whole. This would
    eliminate the political problems and program disruptions that have
    occurred with the fiscal year 2003 transportation appropriation caused
    by the current RABA construct.
        Conversely, if revenues to the HTF were to exceed required outlays
    during a fiscal year, then the following year the motor fuels excise
    user fee rate would be automatically decreased by the amount needed to
    offset the resulting surplus.
        This ``Revenue RABA Provision'' would ensure that the highway and
    mass transit program does not contribute to the Federal deficit during
    the next 6 years.
    Looking Rationally at the Impact of an Annual Two Cent User Fee
    Adjustment: The Real World Gas Price Experience
        During the past year and a half, the retail price of gasoline has
    fluctuated by an average 2.5 cents per gallon per week! (See Figure 5.)
    In 14 of the weeks, the average national retail price of gasoline
    either increased or decreased by 5 cents per gallon or more. In 39 of
    the 75 weeks shown in Figure 5--or more than half the time--the average
    retail price nationally fluctuated at least 2 cents per gallon from 1
    week to the next.

        What this means, of course, is motorists are used to paying each
    week the level of annual adjustment in the Federal motor fuels excise
    user fee rate proposed by ARTBA to support a $60 billion Federal
    highway and $14 billion Federal transit program by fiscal year 2009!
        ARTBA commissioned Zogby International to conduct a national survey
    of likely voters July 9 -12, 2002, which found almost 70 percent would
    support an annual 2 cent per gallon increase in the Federal motor fuels
    tax rate if the money it generated was used exclusively for
    transportation improvements. A 2 cent gas tax increase would cost the
    average driver $12 per year, or 6 cents per day. That compares to the
    estimated $259 each motorist pays per year in extra vehicle repair and
    operating costs driving on poor roads.
    Maintenance of Effort Provision to Ensure Program Growth in Every State
        A key component of financing highway, bridge, and mass transit
    improvements is the partnership between Federal, State and local
    governments to develop and maintain the Nation's surface transportation
    network. It is critical for all partners to make an appropriate
    commitment to transportation investment. Unfortunately, a number of
    States let their own funds for highway and bridge investment lag upon
    realizing the increased Federal funds they would receive under TEA-21.
        To ensure increased Federal surface transportation investment
    actually results in more funds for transportation improvement projects,
    ARTBA believes the reauthorization of TEA-21 should include a
    ``maintenance of effort'' provision that makes increased apportioned
    Federal funds contingent on individual State highway and transit
    program investment levels consistent with, at least, their prior year
    investment.
        Mr. Chairman, thank you again for the opportunity to submit our
    testimony to the Committee on this important subject.
          STATEMENT OF THE AMERICAN SOCIETY OF CIVIL ENGINEERS (ASCE)
        The American Society of Civil Engineers (ASCE) is pleased to
    provide this statement for the record on America's transit needs.
        ASCE, founded in 1852, is the country's oldest national civil
    engineering organization representing more than 125,000 civil engineers
    in private practice, Government, industry, and academia who are
    dedicated to the advancement of the science and profession of civil
    engineering. ASCE is a 501(c)(3) nonprofit educational and professional
    society.
        ASCE believes the reauthorization of the Nation's surface
    transportation programs should focus on three goals: \1\
    ---------------------------------------------------------------------------
        \1\ To read ASCE's ``Reauthorizing the Nation's Surface
    Transportation Program: A Blueprint for Success,'' visit www.asce.org/
    govrel/tea3.

       Expanding infrastructure investment
       Enhancing infrastructure delivery
       Maximizing infrastructure effectiveness

        In 2001, ASCE released the Report Card for America's
    Infrastructure, which gave the Nation's infrastructure a grade of
    ``D+'' based on 12 categories. Roads received a grade of ``D,'' bridges
    a ``C,'' and transit a ``C-.''
        The Nation's surface transportation programs have benefited from an
    increase in Federal and local funding currently allocated to ease road
    congestion, to repair decaying bridges, and to add transit miles. In
    our role as stewards of the infrastructure, ASCE developed its first
    Report Card for America's Infrastructure in 1998, and the
    infrastructure scored an overall grade of ``D.''
        Although many Americans were alarmed by these report cards, few
    were surprised. Their daily experience had prepared them. They were
    coping with traffic congestion and crumbling pavement. Their children
    and grandchildren were attending schools so overcrowded that the first
    lunch shift started at 10:15 a.m. or so old and neglected that the roof
    leaked whenever it rained.
        Indeed, ASCE's first report card in 1998 did help to prompt action.
    Soon after its release, Congress passed the Transportation Equity Act
    for the 21st Century (TEA-21), P.L. 105-178, providing record levels of
    authorized funding for roads, bridges, and transit. Voters in
    communities throughout the United States passed bond initiatives to
    provide desperately needed funds to build and restore school
    facilities.
        At the same time, however, growing frustration with worsening
    traffic congestion, school overcrowding, and the other burdens placed
    on our overtaxed infrastructure has led voters to put the brakes on
    development by passing initiatives to limit growth.
    The State of the Nation's Transit Infrastructure
        According to ASCE's 2001 Report Card, the grade for transit
    declined from a C to a C minus. While transit bus and rail facilities
    have improved in recent years and new systems are being built, those
    improvements can't keep up with the heavy strain placed on the system
    by rapidly increasing ridership, which has increased by 15 percent
    since 1995--even faster than aviation or highway transportation.
        Capital spending must increase 41 percent just to maintain our
    transit system at its present level of service. But we need to do more
    than that. Many transit systems were designed to transport workers from
    the suburbs to jobs in urban centers--a pattern that has now shifted to
    include suburb-to-suburb commutes as well. In order to reduce highway
    congestion and the associated pollution, we need to build a flexible,
    coordinated transportation system. Improvements like that will require
    up to $16 billion annually.
        For transit there is both good news and bad news. The bad news is
    that while investments at both the Federal and State/local levels are
    increasing, ridership demand is increasing at an even faster rate. The
    good news is that increased ridership means increased fare box
    revenues. However, it means additional public investment is needed.
    Yet, the question remains, can investment keep pace with demand?
        In 2000, Americans took more than 9 billion trips on transit, and
    transit ridership increased by 4.5 percent over 1998. This continued a
    trend that marked the fourth straight year of ridership increases, and
    amounted to a 15 percent increase since 1995.
        Transit funding is growing, but at a slower pace. Total spending
    for mass transit in 1997 was $25.1 billion. The Federal share was $4.4
    billion, State and local governments contributed $13.2 billion and
    operating revenue provided the rest. For fiscal year 2000, the Federal
    investment increased to $4.56 billion and to $6.2 billion for fiscal
    year 2001. Total spending from all sources on transit capital projects
    for fiscal year 1997 was $7.6 billion.
        The Federal Government invests $7.66 billion annually in mass
    transit capital improvements. However, according to the Federal Transit
    Administration an additional $10.8 billion is needed to maintain
    current conditions and $16 billion to eliminate identified
    deficiencies. Capital spending on transit needs to increase 41 percent
    to reach $10.8 billion annually.
        Even with the increased investment, many people in the United
    States have little or no access to transit at all. The Federal Transit
    Administration reports that 25 percent of the Nation's urban population
    does not have pedestrian access to transit. In addition, 30 percent of
    the Nation's nonmetropolitan counties have no transit service at all.
    This can prevent those without motor vehicles from participating in the
    economy, places the financial burden of automobile ownership on many
    low-income families, and adds unnecessary automobile trips to our
    Nation's congested streets and highways.
        There are substantial benefits to the taxpayer in exchange for
    public investment in transit infrastructure. Transit provides basic
    mobility for those lacking a motor vehicle or who are unable to drive.
    It promotes location efficiency and reduces other infrastructure costs
    by encouraging dense, multipurpose, pedestrian-oriented urban
    development. Transit is more energy efficient on a per-person basis
    than the automobile. Finally, and perhaps most important, it provides
    an environmental benefit. By reducing passenger car traffic transit
    reduces air, noise, and water pollution precisely where those
    reductions are needed most, in major urban areas.
        The U.S. Department of Transportation reports that: \2\
    ---------------------------------------------------------------------------
        \2\ U.S. Department of Transportation, 1999 Status of the Nation's
    Highways, Bridges, and Transit: Conditions and Performance, May 2000.

     Investment in transit continues to increase, including
        increased Federal funding through TEA-21. Transit system route
        miles show a 10-year increase of 44.2 percent in rail service and
        10.4 percent in nonrail service.
     In 1997, there were 149,468 transit vehicles; 9,922 miles of
        track; 2,681 stations; and 1,179 transit maintenance facilities in
        the United States.
     There were 156,733 nonrail route miles of transit service in
        1997.
     Transit system capacity, measured in vehicle revenue miles,
        increased by 19.7 percent from 1987 to 1997, while nonrail
        increased 17.1 percent.
     The average condition of urban bus vehicles was 3.1 on a scale
        of 5.0 or adequate, largely unchanged for the past 10 years. Sixty-
        three percent of urban bus vehicles are full-sized buses whose
        average condition has remained steady at 3.0 for the last decade.
     The average condition of rail vehicles was 4.0 or good. This
        is down slightly and caused by heavy ridership in major urban
        areas.

        According to the Department of Transportation, the estimated
    average annual
    investment required to maintain the same physical conditions and
    operating performance of the Nation's transit systems as in 1997, by
    replacing and rehabilitating deteriorated assets and expanding capacity
    to accommodate expected transit passenger growth, is $10.8 billion. The
    cost to improve conditions and performance is estimated to be $16
    billion.\3\
    ---------------------------------------------------------------------------
        \3\ Ibid.
    ---------------------------------------------------------------------------
    Expanding the Investment in the Nation's Surface
    Transportation Programs

        Establishing a sound financial foundation for future surface
    transportation improvements is an essential part of the reauthorization
    of the surface transportation program. TEA-21 provided record funding
    levels to the States and significant improvements have been made to our
    Nation's infrastructure. In spite of these notable efforts, the
    Nation's surface transportation system will require an even more
    substantial investment. The U.S. Department of Transportation (DOT)
    data reflects the fact that an investment of $50 billion per year would
    be needed just to preserve the system in its current condition. With
    funding as the cornerstone of any attempt to reauthorize TEA-21 it is
    imperative that a variety of funding issues be advanced as part of
    ASCE's overall strategy.
        ASCE supports total annual funding of $40 billion to $50 billion
    for the Federal-aid highway program. To achieve this level, ASCE
    supports an increase of 6 cents per gallon in the Federal user fee on
    gasoline. This would raise approximately $10.2 billion a year, of which
    an estimated $8.4 billion in new revenues would be available in direct
    financing for Federal-aid highway projects annually. The remainder--
    approximately $1.8 billion annually--would be directed to Federal
    transit programs. These increases are desperately needed.
        ASCE supports the following goals for increasing our infrastructure
    investment.

     A 6 cent increase in the user fee with 1 cent dedicated to
        infrastructure safety and security. These new funds should be
        distributed between highways and transit using the formula approved
        in TEA-21.
     The user fee on gasoline should be indexed to the Consumer
        Price Index (CPI) to preserve the purchasing power of the fee.
     The Transportation Trust Fund balances should be managed to
        maximize investment in the Nation's infrastructure.
     Congress should preserve the current firewalls to allow for
        full use of trust fund revenues for investment in the Nation's
        surface transportation system.
     The reauthorization should maintain the current funding
        guarantees.
     Congress should stop diverting 2.5 cents of the user fee on
        ethanol to the General Fund, and put it back into the Highway Trust
        Fund.
     Make the necessary changes to alter the Revenue Aligned Budget
        Authority (RABA) to decrease the volatility of the estimates from
        year to year and ensure a stable user fee based source of funding.
     The current flexibility provisions found in TEA-21 should be
        maintained. The goal of the flexibility should be to establish a
        truly multimodal transportation system for the Nation.

        First to be addressed is the issue of raising the user fee on motor
    fuels. While the gas tax is an important element of the current revenue
    stream feeding the Federal Highway Trust Fund, it continues to erode in
    value due to its inherent inelastic nature. Two strategies must be
    advanced to remedy this condition. First, raise the gasoline user fee
    by 6 cents. This would provide a much needed infusion of funding toward
    the $50 billion per year need. In tandem with raising the motor fuel
    tax, ASCE believes that it is important to shore up the weakness of the
    motor fuel tax and its inability to retain value over the long term by
    adding a provision to the law that would index it based on the Consumer
    Price Index (CPI). This would allow the rate to adjust and reflect the
    current economic conditions of the Nation.
        As the needs of the users change so must the priorities of the
    Nation's transportation owners and operators. Safety and security have
    always been important but have been driven to the top of the priority
    list by events of the last year. In response to this important need,
    ASCE is advancing the position that 1 cent of the proposed 6 cent
    increase in the motor fuel tax be directed toward safety and security
    projects as deemed appropriate by the transportation agencies
    administering the funds.
        Important provisions of TEA-21 are embodied in the principles of
    Revenue Aligned Budget Authority (RABA) and firewalls. RABA was
    established to ensure that the Federal Highway Trust Fund revenues
    would be spent in accordance with the rate at which they were deposited
    into the fund. Over the life of TEA-21 it has allowed states to
    construct many projects with these additional monies that would have
    otherwise languished in the trust fund. In addition, with the
    establishment of firewalls on the Federal Highway Trust Fund, a
    condition was created wherein the states could count on their funds in
    a long term investment strategy. This has eliminated the fear that some
    major projects would fall victim to various budget strategies at the
    national level.
        Any transportation legislation must have two fundamental
    philosophies to build upon. First is the issue of equity. Some measure
    of equity was accomplished through the establishment of minimum
    guarantees. This provision of TEA-21 raised the return to the States to
    a minimum level in order to bring greater equity to the donor/donee
    situation that exists across the country. In addition, a commitment to
    spend the maximum amount possible from the Federal Highway Trust Fund
    was an important part of this legislation. Positive, proactive
    management of the trust fund balance will be essential to addressing
    the critical transportation needs facing our Nation today.

    Innovative Financing
        Even with increases in the gasoline user-fee, it is likely that
    tax-based revenues will not be sufficient to keep pace with the
    Nation's transportation needs.
        There is a compelling need for enhanced funding, to a large extent
    through user-oriented fees that have been demonstrated to be a well-
    accepted and equitable source of infrastructure financing. In the case
    of surface transportation, Federally sponsored studies demonstrate the
    need for higher levels of investment. An additional challenge is to
    convince our citizens and our elected leaders that we must
    either ``pay now'' or ``pay later,'' and that paying now is much more
    cost-effective and prudent in the long run.
        Innovative financing techniques can greatly accelerate
    infrastructure development and can have a powerful economic stimulus
    effect compared to conventional methods. This is the current approach
    in South Carolina, Georgia, Louisiana, Florida, and Texas, where
    expanded and accelerated transportation investment programs have been
    announced. Innovative financing techniques, including toll road-based
    funding, figure heavily in several of these State programs.
        The innovative programs in TEA-21 have been a good start, but more
    needs to be done to expand their scope, and new programs or approaches
    must be introduced. We must find new and innovative ways to finance the
    critical transportation infrastructure needs of the Nation.
        ASCE supports the innovative financing programs and advocates
    making programs available to all States where appropriate.
    Additionally, the Federal Government should make every effort to
    develop new programs.
        ASCE supports the following changes to enhance the existing
    programs:
    Transportation Infrastructure Finance and Innovation Act (TIFIA)
     The TIFIA process for review, approval, and negotiation is
        regarded as burdensome, and could be streamlined.
     TIFIA projects have a minimum eligibility threshold of $100
        million and consideration could be given to lowering this to $50
        million to expand the pool of projects.
     TIFIA loans could be ``fully subordinated.'' Current TIFIA
        legislation is written to subordinate TIFIA loans to other
        creditors. However, in the event of liquidation/default, the TIFIA
        loan advances to parity status with other creditors. This is known
        as the ``springing lien'' provision. It is thought by some that
        this has limited the availability of other credit. The issue is
        controversial, with pros and cons on both sides, but reform should
        be seriously considered.

    State Infrastructure Banks (SIB's)
     With the exception of five States (Texas, Rhode Island,
        Florida, Missouri, and California), TEA-21 did not permit further
        capitalization of SIB's with Federal funds. It is felt that this
        has suppressed SIB activity.
     Federal regulations still apply to loan funds that are repaid
        to the bank, encumbering SIB funded projects with Federal
        regulatory requirements.
    Grant Anticipation Revenue Vehicles (GARVEE's)
     Increase the flexibility of GARVEE bond repayment methods. For
        example, utilize the total apportionment amount as a source of
        repayment (for example, all funding categories), so that no
        particular funding category is overburdened.

        New programs for consideration as part of the next reauthorization
    are:

     Increased use of user fees, tolls, value pricing, and HOT
        lanes.
     Possible indexing of highway trust fund motor fuels tax to
        inflation.
     Establishing a true multimodal funding program (for example,
        funds can be used interchangeably for rail, highway, freight,
        intermodal facilities, etc.).
     Tax credit bonds, private activity bonds, and tax-exempt bonds
        for privately developed projects.

    Long-Term Viability of Fuel Taxes for Transportation Finance
        ASCE supports the need to address impacts on future surface
    transportation funding and believes that provision should be made in
    the next surface transportation authorizing legislation to explore the
    viability of the most promising options to strengthen this funding. In
    particular, the impacts of fuel cell technology should be studied, as
    well as how to create a mileage-based system for funding our Nation's
    surface transportation system as this technology comes to market and
    lessens the Nation's dependence on gasoline as a fuel source for
    automobiles.
        Fuel taxes have long been the mainstay of transportation
    infrastructure finance, but their future is now uncertain. In many
    States, there is a strong reluctance to raise fuel taxes, and some
    State legislatures have even reduced taxes to compensate for the sharp
    increase in average gasoline prices over the last 2 years. Many
    localities and States are supplementing or replacing fuel taxes with
    other sources, such as sales taxes and other general revenue sources.
    There is also a growing trend to use additives to gasoline for
    environmental reasons. The most prominent additive, ethanol, enjoys a
    Federal exemption from fuel taxes that reduces Federal and State trust
    fund revenues by some several billion dollars annually. Looking ahead,
    a slow but steady increase in fleet efficiency--perhaps due to
    increased market penetration by electric, fuel cell, or hybrid
    technologies--would reduce the revenue per mile of use generated by
    users. Whereas cleaner-burning fuels and increased fuel efficiency are
    desirable policy goals in their own right, particularly in regard to
    global warming, they may reduce the reliability of fuel taxes in the
    future.
        A helpful first step in this process will be the Transportation
    Research Board's recently initiated Study on Future Funding of the
    National Highway System, which will describe the current policy
    framework of transportation finance and evaluate options for a long-
    term transition to sources other than fuel taxes. The goals of the
    study are to: (1) determine the extent to which alternatives to fuel
    taxes will be needed in the next two decades or so; (2) analyze the
    pros and cons of different alternatives in terms of political
    feasibility, fairness, and cost; (3) suggest ways in which barriers to
    these alternatives might be overcome; (4) recommend ways in which the
    efficiency and fairness of the fuel tax could be enhanced, and (5)
    recommend, as necessary, a transition strategy to other revenue
    sources. The study's first task, to be summarized in an interim report,
    will provide one or more scenarios to illustrate the time span during
    which petroleum-based gasoline availability and cost might reduce fuel
    tax revenues. The interim report has been requested to provide insight
    to those parties involved in the development of the surface
    transportation reauthorization legislation, particularly with regard to
    projections of fuel tax revenues during the next reauthorization cycle.
    The study will also provide estimates of trends in expenditures for
    transportation infrastructure from sources other than the fuel tax.
    Life-Cycle Cost and Surface Transportation Design
        The use of Life-Cycle Cost Analysis (LCCA) principles will raise
    the awareness of clients of the total cost of projects and promote
    quality engineering. Short-term design cost savings which lead to high
    future costs will be exposed as a result of the analysis. In the short-
    term the cost of projects will increase; however, the useful life of a
    project will increase, and there may be cost savings in operations and
    maintenance over the long-term.
        When the cost of a project is estimated only for design and
    construction, the long-term costs associated with maintenance,
    operation, and retiring a project, as well as the cost to the public
    due to delays, inconvenience, and lost commerce are overlooked. The
    increasing use of bidding to select the design team has resulted in a
    pattern of reducing engineering effort to remain competitive, with the
    result of higher construction and life-cycle costs.
        ASCE encourages the use of Life-Cycle Cost Analysis (LCCA)
    principles in the design process to evaluate the total cost of
    projects. The analysis should include initial construction, operation,
    maintenance, environmental, safety, and all other costs reasonably
    anticipated during the life of the project, whether borne by the
    project owner or those otherwise affected.\4\
    ---------------------------------------------------------------------------
        \4\ American Society of Civil Engineers, Policy Statement 451,
    ``Life-Cycle Cost Analysis,'' 1999.
    ---------------------------------------------------------------------------
    Intermodal Facilities
        TEA-21 continues a surface transportation program with flexible
    funding for highway, transit, and other modal facilities. Traditional
    transportation practice inhibits attainment of a truly intermodal
    process because of customary approaches and philosophies that support
    the modal orientation of agencies, the lack of connections among modes,
    the inequities in Federal matching ratios for different modes, and the
    consolidation of funding for multimodal projects.
        A primary emphasis of passenger intermodalism is to facilitate
    connections between the private automobile and other access modes and
    public transportation systems. For example, park-and-ride facilities
    provide critical connections for mass transit commuters using
    automobiles for a portion of their trips.
        TEA-21 continues to highlight intermodalism. Increased
    intermodalism is accomplished by statewide and metropolitan planning
    organizations, management systems and compliance with the Clean Air Act
    Amendments of 1990 (CAAA). Federal regulations explicitly state that
    ``each State . . . carry out a continuing, comprehensive, and
    intermodal statewide transportation planning process,'' and that
    metropolitan transportation plans and programs shall ``lead to the
    development and operation of an integrated intermodal transportation
    system that facilitates the efficient, economic movement of people and
    goods.''
        TEA-21 and the CAAA have changed the way transportation plans have
    been developed from a mode by mode to an intermodal basis.
        Programs of the Federal, State, and local governments should
    maintain and strengthen the TEA-21 provisions and funding mechanisms to
    consider a wide range of multimodal options and new technologies in the
    development of transportation plans, programs, and projects.
        ASCE supports the vision of the Transportation Equity Act for the
    21st Century (TEA-21) in the development of ``a National Intermodal
    Transportation System that is economically efficient, environmentally
    sound, provides the foundation for the Nation to compete in the global
    economy and will move people and freight in an energy efficient
    manner.'' Support for partnerships among the Federal, State, and local
    governments, with various citizens, groups, and firms from the private
    sector are essential to further the intermodal goals of TEA-21.\5\
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        \5\ American Society of Civil Engineers, Policy Statement 149,
    ``Intermodal Transportation Systems,'' 2002.
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    Operations and Maintenance of the Nation's Surface
    Transportation Infrastructure
        There is a clear and present need for an increased focus on
    transportation operations and maintenance at all levels--Federal,
    State, regional, and local. This need is based on several factors:

     An aging transportation infrastructure.
     Growing congestion and incident problems are causing
        transportation system performance to be a top priority in many
        areas of the country.
     Capacity constraints and costs of new construction are forcing
        us to look at alternative solutions and place a premium on
        maintaining and improving the existing transportation system.
     Customers desire travel choices, better information, and
        increased reliability to meet their mobility needs.
     An efficient and responsive transportation system is critical
        to meeting homeland security priorities.

        An increased focus on transportation operations functions can
    enhance performance of the transportation system, for example:

     Routine traffic and transit operations.
     Public safety responses.
     Planned construction disruptions.
     Incident management.
     Network and facility management.
     Traveler and shipper information.
     Bicycle and pedestrian mobility.

        The Department of Transportation should encourage local matching
    and innovative funding. The Federal Government has a role in exploring
    and promoting best practices related to innovative funding for
    operations and maintenance.
        ASCE supports a strong Federal role in the Nation's transportation
    system and strongly endorses Federal leadership in increasing the focus
    on transportation operations and maintenance, thereby enhancing the
    performance of and preserving our investment in the transportation
    system. Reauthorization of TEA-21 should accomplish the following
    regarding Operations and Maintenance: \6\
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        \6\ American Society of Civil Engineers, Policy Statement 495,
    ``Operations and Maintenance of Transportation Systems,'' 2002.

     Support and assist homeland security initiatives.
        Transportation operations and homeland security share many of the
        same goals and functions. Resource sharing (that is communications
        infrastructure, traffic control centers) and joint planning are
        appropriate. Transit security and preparedness, international
        border security, asset security and tracking, vulnerability
        assessment, planning, and creation of system redundancy are
        important transportation priorities for homeland security.
     Support and assist State and local agencies. Beyond
        establishing transportation operations and maintenance as a
        national priority, the Federal role should be to support and assist
        State and local entities in accomplishing related goals. This
        includes support of research and development, provision of tools,
        promotion of best practices, and enhancement of education and
        training at all levels.
     Provide flexible funding. Flexible funding approaches are
        important components to supporting operations and maintenance
        needs. Expanding funding eligibility for operations and maintenance
        programs, enabling direct funding to local and regional operating
        agencies, public-private partnerships or outsourcing, and
        simplifying and clarifying Federal funding processes are important
        actions.
     Recognize that the private sector has much to offer in
        management and technical skills in operations and maintenance.
        Public-private partnerships may provide
        enhanced operations and management programs.
     Specific programs. In addition to flexible funding, several
        programs should be considered for targeted funding:

       Homeland security initiatives related to transportation.
       Incident management programs.
       Implementation of infrastructure for data collection and
        management.
       Provision of real-time information to and from customers.
       Support for regional cooperation and partnerships.
       Programs to alleviate bottlenecks.

    Conclusion
        As Congress grapples with the reauthorization of the Nation's
    surface transportation program ASCE recommends that the following
    concepts guide the process:

     Expanding infrastructure investment.
     Enhancing infrastructure delivery.
     Maximizing infrastructure effectiveness.

        Unless we act now, the problem will only get worse because road use
    is expected to increase by nearly two-thirds in the next 20 years.
        The lack of adequate investment in America's infrastructure has
    left us with a vast backlog of deteriorated facilities that no longer
    meet our Nation's increasing demands. To remedy America's current and
    looming problem, ASCE estimated in 2001 a $1.3 trillion investment in
    all categories of infrastructure over the next 5 years and called for a
    renewed partnership among citizens, local, State, and Federal
    Governments, and the private sector.