[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



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                            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.
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    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.'' *
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    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\
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    \4\ American Society of Civil Engineers, Policy Statement 451, 
``Life-Cycle Cost Analysis,'' 1999.
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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\
---------------------------------------------------------------------------
    \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.









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