[Senate Hearing 110-1010]
[From the U.S. Government Publishing Office]



                                                       S. Hrg. 110-1010


   STRENGTHENING THE ABILITY OF PUBLIC TRANSPORTATION TO REDUCE OUR 
                       DEPENDENCE ON FOREIGN OIL

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

                                HEARING

                               before the

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

                       ONE HUNDRED TENTH CONGRESS

                             SECOND SESSION

                                   ON

THE ADEQUACY OF THE FEDERAL GOVERNMENT'S ROLE IN PROMOTING TRANSIT AND 
    IN MAXIMIZING THE ENERGY EFFICIENCIES OF PUBLIC TRANSIT SYSTEMS


                               __________

                       TUESDAY, SEPTEMBER 9, 2008

                               __________

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


      Available at: http: //www.access.gpo.gov /congress /senate /
                            senate05sh.html




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            COMMITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS

               CHRISTOPHER J. DODD, Connecticut, Chairman
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
THOMAS R. CARPER, Delaware           CHUCK HAGEL, Nebraska
ROBERT MENENDEZ, New Jersey          JIM BUNNING, Kentucky
DANIEL K. AKAKA, Hawaii              MIKE CRAPO, Idaho
SHERROD BROWN, Ohio                  ELIZABETH DOLE, North Carolina
ROBERT P. CASEY, Pennsylvania        MEL MARTINEZ, Florida
JON TESTER, Montana                  BOB CORKER, Tennessee

                      Shawn Maher, Staff Director
        William D. Duhnke, Republican Staff Director and Counsel

                      Amy S. Friend, Chief Counsel
                  Fern Goodhart, Public Health Fellow
                Nathan Steinwald, Legislative Assistant

                    Mark Osterle, Republican Counsel
                   Hester Peirce, Republican Counsel
          Shannon Hines, Republican Professional Staff Member
         Tewana Wilkerson, Republican Professional Staff Member
              Robert Boone, Republican Legislative Counsel

                       Dawn Ratliff, Chief Clerk
                      Devin Hartley, Hearing Clerk
                      Shelvin Simmons, IT Director
                          Jim Crowell, Editor








                            C O N T E N T S

                              ----------                              

                       TUESDAY, SEPTEMBER 9, 2008

                                                                   Page

Opening statement of Senator Casey...............................     1

Opening statements, comments, or prepared statements of:
    Senator Shelby...............................................     2
    Senator Reed.................................................     3
    Senator Carper...............................................     3
    Senator Dole.................................................     4
    Senator Schumer..............................................     6
    Senator Menendez.............................................     8
    Senator Tester...............................................    12

                               WITNESSES

Hillary Clinton, U.S. Senator from the State of New York.........    10
William W. Millar, President, American Public Transportation 
  Association....................................................    13
    Prepared statement...........................................    39
    Response to written questions of:
        Senator Reed.............................................   208
        Senator Tester...........................................   208
Andrew H. Darrell, Vice President, Environmental Defense Fund....    16
    Prepared statement...........................................    46
    Response to written questions of:
        Senator Reed.............................................   210
        Senator Carper...........................................   211
        Senator Casey............................................   212
Dorothy W. Dugger, General Manager, San Francisco Bay Area Rapid 
  Transit District...............................................    18
    Prepared statement...........................................    57
    Response to written questions of:
        Senator Reed.............................................   212
Keith Parker, Chief Executive Officer, Charlotte Area Transit 
  System.........................................................    20
    Prepared statement...........................................   181
    Response to written questions of:
        Senator Reed.............................................   213
David W. Kilmer, Executive Director, Red Rose Transit Authority, 
  and Co-Leader, The 100 Bus Coalition...........................    22
    Prepared statement...........................................   186
    Response to written questions of:
        Senator Reed.............................................   214
        Senator Tester...........................................   215
Robert Puentes, Fellow, and Director, Metropolitan Infrastructure 
  Initiative, Brookings Institution..............................    24
    Prepared statement...........................................   193
    Response to written questions of:
        Senator Reed.............................................   215
        Senator Tester...........................................   216

 
   STRENGTHENING THE ABILITY OF PUBLIC TRANSPORTATION TO REDUCE OUR 
                       DEPENDENCE ON FOREIGN OIL

                              ----------                              


                       TUESDAY, SEPTEMBER 9, 2008

                                       U.S. Senate,
          Committee on Banking, Housing, and Urban Affairs,
                                                    Washington, DC.
    The Committee met at 10:11 a.m., in room SD-538, Dirksen 
Senate Office Building, Senator Robert Casey, presiding.
    Senator Casey. The Committee will come to order.
    I am honored this morning to be sitting in Senator Dodd's 
place. He had an emergency he had to attend to, and I am 
grateful for the opportunity to chair this hearing and grateful 
for the members who are here with us. I will do a brief opening 
and then I will turn to Senator Shelby and other members.

          OPENING STATEMENT OF SENATOR ROBERT P. CASEY

    Senator Casey. Today, we are examining ways to strengthen 
the ability of transit to reduce our dependence on foreign oil, 
and there are, as we know, two great economic challenges facing 
our country today. One is the challenge created by the collapse 
of the subprime mortgage market and the ripple effects it has 
had throughout our economy. And the second, of course, is the 
dramatic impact that the high cost of energy has had on our 
economy. For those of us on this Committee, it is our good 
fortune--or some might say misfortune--to have a central role 
to play in addressing each of these challenges.
    With respect to the challenge cause by increasing energy 
costs, this hearing could not be more timely. The cost of 
energy has increased precipitously over just a short period of 
time. Three years ago, the President signed the surface 
transportation reauthorization bill known as SAFETEA. At the 
end of 2005, the price of gasoline was around $2 a gallon. In 
recent weeks, in most parts of the country the cost of gasoline 
has exceeded $4 a gallon. While prices have abated somewhat in 
recent days, they are still exceptionally high by historic 
standards.
    Perhaps the greatest indication of the impact of these high 
energy prices are having on American families is that they are 
changing Americans' behavior. Today, for the first time in 27 
years, our people are driving less. As we will learn just this 
morning from our first witness, people in record numbers are 
relying upon public transportation to go to work and live their 
daily lives. So while some people are waiting, the American 
people are not waiting for Washington to change.
    So we will explore a lot of these issues today, and I am 
going to cut short my statement to turn it over to the Ranking 
Member, Senator Shelby, and then we will go from there. Senator 
Shelby.

             STATEMENT OF SENATOR RICHARD C. SHELBY

    Senator Shelby. Thank you, Mr. Chairman. I will try to be 
brief.
    I believe we all agree that the role of public 
transportation in conserving energy is an important issue and 
one that has gained greater attention of late with gas prices 
on the rise, as you mentioned. Mobility has always been an 
important part of the American way of life and one that we have 
come to expect. Our communities, the economy, and much of our 
lives are organized around our ability to travel easily and 
efficiently, from home to work and to school, to shop, to play, 
to receive medical care, or simply to travel for pleasure. 
However, as more vehicles take to the roads, traffic congestion 
is having an increasingly debilitating effect on our ability to 
travel, whether for necessity or for fun.
    These increasing delays not only diminish our overall 
quality of life but place an actual strain on our pocketbook. 
In fact, according to the Texas Transportation Institute, 
congestion has cost the U.S. economy $78 billion in the form of 
4.2 billion hours of travel delay and 2.9 billion gallons of 
wasted fuel for American consumers. Just think about it. While 
we can attempt to build more roads and bridges to accommodate 
greater numbers of vehicles, public transportation is an 
important alternative. Public transportation can efficiently 
and effectively transport commuters to and from their 
destinations while using less fuel, creating less pollution, 
and taking a significant amount of stress and congestion off 
our roadways.
    The majority of Americans continue to have few choices but 
to pay at the pump to get where they need to go; but for those 
who do have access, many have seized the opportunity to save 
money on fuel by taking public transportation, resulting in the 
highest ridership numbers that have been reported in 50 years.
    Last week, the average price of gasoline in the U.S. was 
$3.68, down slightly from the month before, and yet ridership 
numbers seem to be holding steady. But we must find a way to 
maintain these ridership numbers long term despite the price of 
fuel.
    I believe that we must recognize the ability of public 
transportation to alleviate congestion and reduce energy 
consumption by giving it greater focus as we continue to debate 
ways to increase supply, reduce demand, and diversify our fuel 
sources. I also believe that the public must be able to see, 
feel, and realize the advantages of public transportation in 
their daily lives, or they will never take advantage of the 
services. In fact, we can have the most fuel-efficient, 
environmentally friendly public transportation systems around. 
But if riders do not believe that it is benefiting them 
directly, they will not utilize the systems.
    Ultimately, this must be a collaborative effort, one that 
enlists the efforts of the agencies in making their systems 
more efficient, their rides more pleasant, and the overall 
experience more positive and the efforts of Congress in 
supporting these endeavors. This cannot be seen as just another 
opportunity to collect more from the Federal Government and 
deliver the same to the American public. This is an important 
topic, I believe, and I look forward to hearing the thoughts of 
our panelists regarding actions that Congress, and specifically 
this Committee, can take to increase the efficiency and 
effectiveness of public trans systems big and small across the 
country.
    Thank you, Mr. Chairman.
    Senator Casey. Senator Shelby, thank you very much.
    We will go now to other Members of the Committee in the 
order of appearance. That is the rule, as we know. Now, 
according to my list here, Senator Reed is next.

                 STATEMENT OF SENATOR JACK REED

    Senator Reed. Thank you, Mr. Chairman.
    I just want to emphasize very briefly what Chairman Casey 
and Senator Shelby said. With increased prices of gasoline 
particularly, many people are using mass transit, but the mass 
transit system cannot accommodate this increased demand, and 
that is causing huge problems. In my home State of Rhode 
Island, our public transit agency estimates that they have to 
put more buses on, yet with higher diesel prices, higher prices 
for everything else, they cannot afford to do that, so at this 
moment they are thinking about cutting service, which means 
that people cannot get to work, seniors cannot get to 
appointments, and we also understand the huge ramifications for 
environmental policy with congestion, as Senator Shelby 
mentioned, and just environmental degradation. So we have to do 
something, and I am pleased that my colleague Senator Clinton, 
I think, will talk about temporary operating assistance, which 
is important, particularly in this fuel crisis, and also long-
term capital investments for energy-efficient transportation 
vehicles and systems, not just buses but systems--GPS systems 
that can move buses more efficiently; special lanes on roads 
that can get buses through. All of that is essential to 
building a system.
    I also think and hope that as we consider supplemental 
appropriations bills--Senator Burr has included $900 million in 
investments in public transportation--we can get that through, 
and thank you, Mr. Chairman, very much.
    Senator Casey. Thank you, Senator Reed.
    Senator Corker.
    Senator Corker. Out of respect for the witnesses, I have no 
opening comments and sort of hope that will be the norm.
    Thank you.
    [Laughter.]
    Senator Casey. Senator Corker, you are already more popular 
than you were a minute ago.
    Senator Carper.

             STATEMENT OF SENATOR THOMAS R. CARPER

    Senator Carper. Breaking with the norm, let me--Mr. 
Chairman, the price of gasoline went to $4 a gallon earlier 
this year, and Americans started looking for ways to save 
money. Some of us bought the smaller, more fuel-efficient cars. 
Most people, though, tried to find ways to buy less gas. I 
believe the cheapest, cleanest gallon of gasoline is the one 
that we never have to buy.
    So how have people avoided filling up their tanks? They 
have worked with their employers to allow them to telecommute. 
They have started carpooling. They have been getting onto 
trains and buses wherever they are available. In the Northeast 
corridor, our ridership on Amtrak--in fact, nationwide, 
ridership on Amtrak is up some 11 percent; revenues are up 
about 14 percent over the last year.
    The biggest growth, though, has not been in the Northeast 
corridor. The biggest growth has been in other densely 
populated corridors, including corridors between Chicago and 
St. Louis, Chicago and Kansas City, Kansas City and St. Louis. 
Even the Carolinian, which runs from New York down to 
Charlotte, has shown dramatic increases in ridership, along 
with a number of routes on the West Coast.
    Transit ridership, as we know, is breaking records all over 
the country, and, again, that is not just in the Northeast. But 
the biggest increases in rail travel were, I am told, in 
Seattle; Harrisburg, Pennsylvania; Oceanside, California; and 
the biggest gains in ridership in buses were down in 
Gainesville, Georgia, and Pompano Beach, Florida.
    Now, this is good news for lowering our dependence on 
foreign oil. Each year, public transportation uses about 1.4 
billion gallons of gasoline. That is almost 4 million gallons 
of gasoline a day. Some may say that is bad news. Actually, I 
think it is good news for the American people and for our 
families. The American Public Transit Association has found 
that people can save some $1,800 per year by taking transit. 
Americans understand that transit saves money. Recent studies 
show that one-third of Americans who live near rail transit use 
it regularly, and that is terrific. What is not so terrific is 
that less than one in every 20 Americans lives within a half-
mile of trail transit. Less than one in 20 Americans has a way 
to save money on gas when costs spike. We can do better than 
that, and we need to.
    When we consider energy legislation, global climate change 
legislation, and our next transportation bill, we need to take 
this into consideration and make sure that most Americans have 
safe, convenient access to transit. If we do so, we will go a 
long way in helping families save money, reducing our reliance 
on foreign oil.
    If I could, Mr. Chairman, I just want to share a ``gee 
whiz'' fact with everybody here today. There has been a 
migration of Americans back toward our coasts, and today some 
55 percent of Americans live within, I believe--is it 75 
miles?--within 50 miles of one of our coasts. And what this 
does is it certainly provides opportunities for densely 
populated corridors which rail is able to serve well. It also 
provides better opportunities for transit with those kinds of 
density.
    Thanks very much.
    Senator Casey. Senator Dole.

              STATEMENT OF SENATOR ELIZABETH DOLE

    Senator Dole. Thank you, Mr. Chairman, Senator Shelby. I 
want to thank you for holding this important hearing on how 
functional transit programs can play an important role in our 
effort to combat rising energy prices, and I will just prepare 
you that I have a rather long statement, so hold on here.
    In North Carolina, there has been a concerted effort across 
our larger communities to develop more efficient mass transit 
systems, which I believe has been largely successful. When I 
served as Transportation Secretary during the Reagan 
administration, I strengthened the criteria that the Federal 
Transit Administration, FTA, uses to evaluate proposed transit 
projects. It is absolutely necessary that FTA have the 
expertise on hand to judge projects fairly and objectively. I 
firmly believe that any transit project built with Federal tax 
dollars must be thoroughly examined and rigorously tested to 
guarantee that the numbers add up and the ridership figures are 
solid.
    I recall a crisp May morning in 2005 when I and many other 
State and local leaders drove in the golden spike to mark the 
beginning of construction and to celebrate the signing of the 
full funding grant agreement for the Charlotte light rail 
system. At that time there was no way to fully comprehend how 
the city of Charlotte and its surrounding areas would embrace 
light rail. In November 2007, the line officially opened for 
public use, and I am pleased to report that as of July it has 
serviced over 430,000 trips, averaging over 16,900 trips a day 
during a typical work week. In total, there were over 2.3 
million trips taken on the Charlotte Area Transit System, the 
CATS System, with an average of more than 90,000 daily rides 
during that same month. These statistics far exceeded initial 
projections, and CATS is now slated to reach ridership levels 
that were not supposed to be achieved until the year 2025. 
Congratulations to Director Keith Parker and Charlotte Mayor 
Pat McCrory for the resounding success of this transit program.
    Likewise, in the Raleigh-Durham-Chapel Hill area, the local 
transit authority has also witnessed increased reliance on the 
public transportation assets. In fact, the American Public 
Transportation Association estimates that a person in the 
Triangle can save more than $8,000 per year by taking public 
transportation. In just the past year, ridership on the 
Triangle Transit--that is the regional bus service--has 
increased 14 percent to nearly 1 million riders. While Triangle 
Transit has experienced setbacks in the development of its own 
light rail proposal, I am pleased they have gone back to the 
affected local communities and various civic and business 
leaders to try to develop a more robust light rail proposal for 
the Triangle area.
    While I am pleased to see these two urban areas in my State 
effectively utilize transit systems, we must not forget that 
our rural areas also demand viable transportation solutions. 
Indeed, from the largest metropolitan area to the smallest 
towns, updating our infrastructure would positively impact the 
lives of all Americans. In addition, improving our current 
system of roads and bridges will lead to a more efficient 
system, and I look forward to Congress working toward a new 
transportation reauthorization bill, as has been mentioned 
earlier, next year.
    I am proud to join Senator Wyden and Senator Thune as an 
original cosponsor of the Build America Bonds Act. This 
legislation would provide $50 billion in new transportation 
infrastructure funding through a one-time bonding program. 
Funds generated from the bonds would be available to all 
States, and these additional dollars would empower States and 
local governments to compete and complete significant new 
infrastructure projects across all modes of transportation, and 
that would include roads, bridges, transit, and rail. Unlike 
other proposals, our bill does not create a new Federal 
bureaucracy or a panel of individuals that could be influenced 
by politics to cherry-pick the projects that are to receive 
funding.
    As we discuss these important public transportation issues, 
we must not and cannot have this conversation without 
discussing the fundamental supply and demand principles of our 
dependence on foreign oil. Americans will continue to drive 
their cars and fuel our economy using oil for the foreseeable 
future. Not everyone can purchase a new hybrid, and not 
everyone will have access to public transportation. So it is 
important that the United States have a comprehensive energy 
policy that is not dependent on Chavez's Venezuela or 
Ahmadinejad's Iran or Putin's Russia. Let us put those dollars 
to work here at home. To free the United States from the 
stranglehold of high gas prices and dependence on foreign oil, 
I believe we must pursue a comprehensive strategy based on 
improving conservation, investing in alternative sources, 
exploring for more energy, and ensuring market fairness. 
Indeed, mass transit systems which help conserve valuable 
energy resources play an important part in this comprehensive 
strategy.
    We must put every option on the table, everything and the 
kitchen sink, to achieve energy independence, less energy 
through conservation, and more energy to the market by making 
better use of America's vast resources. We must get to work to 
achieve bipartisan, common-sense solutions. That is what the 
American people expect, and that is what this Congress needs to 
deliver.
    I have joined with the bipartisan group of Senators to 
deliver an energy plan that will help transition our vehicles 
to non-petroleum-based fuels, commit the U.S. to conservation 
and efficiency, and increase responsible, environmentally sound 
production of new energy. Securing our energy independence is 
one of the greatest challenges facing our Nation. It is 
critical to our economic future. It is critical to our national 
security. And our commitment to all options, including the one 
the Chairman has highlighted today--public transportation--must 
be on the table. As I have said previously, we need to throw 
everything, and the kitchen sink, on the table to secure our 
energy independence.
    Thank you, Mr. Chairman.
    Senator Casey. Thank you, Senator Dole.
    Senator Schumer.

            STATEMENT OF SENATOR CHARLES E. SCHUMER

    Senator Schumer. Thank you, Mr. Chairman. I would like to 
thank you and Senator Shelby for holding this hearing, and I 
want to acknowledge, of course, my good friend and colleague 
from New York State, who is here today.
    As Chairman of the Subcommittee on Housing, Transportation, 
and Community Development, I would like to start by saying 
transportation needs have reached a critical point in the 
Nation's history, and as has been mentioned before, the 
skyrocketing price of oil is putting financial strains on all 
modes of transportation.
    The gas pump is not the only place where the American 
traveler in struggling. The infrastructure that carries America 
is sorely in need of a shot in the arm. And so we are at a 
confluence here. We need to do more for road infrastructure, 
transit infrastructure, and we have an energy crisis. And so 
right now, related to this bill, as we speak, on the floor of 
the Senate we are trying to infuse $8 billion into the Highway 
Trust Fund, which is short. If we do not do that in the next 
few weeks, our States will get only 64 cents on every dollar 
for ongoing projects. Ongoing projects. And that means at a 
time of recession, workers will be laid off; our need to 
increase our infrastructure, make it better--we saw what 
happened with the bridge collapse--is gone.
    And so we have proposed filling that trust fund. And what 
do our colleagues on the other side of the aisle say? Take it 
out of the Mass Transit Fund. I agree with my colleague from 
North Carolina. We need both. And it is wrong to rob Peter to 
pay Paul, and yet that is exactly what is happening here as we 
speak.
    So the irony is, as we are all praising the need for mass 
transit, some are deciding to rob the cradle by taking money 
out of mass transit and putting it into regular transit, 
regular highways. That is a huge mistake, and I hope we do not 
do that. I hope we can, rather, fill the Highway Trust Fund 
without sacrificing mass transit. That is very, very important, 
and I hope my colleagues on the other side of the aisle would 
agree with me on that.
    Now, in the long run, we need to rebuild our mass transit 
infrastructure. In my city, the MTA reports that subways, 
buses, and railroads provide 2.6 billion trips each year to New 
Yorkers. That saves us energy every time they take that. And in 
our city, which I guess is the capital of mass transit in the 
country, ridership has increased 4 to 11 percent in the last 9 
months alone. People are leaving the cars and going into mass 
transit because of the high price of gasoline.
    The riders that we have in the New York metropolitan area, 
which is really four States--Connecticut, New Jersey--my 
colleague from New Jersey is here; our Chairman from 
Connecticut; and Pennsylvania as well, where Senator Casey 
comes from. Now Pike County is part of the New York 
metropolitan area, and people take mass transit. I just met a 
police officer who retired and moved out there, but he has 
another job, and he takes the bus. He takes a commuter bus in 
from Pike County. It only takes an hour and 15 minutes. Pretty 
good. He used to live on Staten Island.
    But in any case, we need to do this. So our infrastructure 
is really important, and we have to build our mass transit 
infrastructure. We have waited too long. It not only works in 
large cities like New York. It works in medium-size cities like 
Buffalo and Rochester and Syracuse and Albany, and smaller 
cities. So it is now needed across the whole country, and that 
is why the Saving Energy Through Public Transportation Act, 
introduced by my colleague Senator Clinton--I am a proud 
cosponsor of it--is so important. And I hope that we can all 
get behind this legislation so we can move forward and improve 
mass transit without taking that money away from the Highway 
Trust Fund, just as the Highway Trust Fund should not take the 
money out of mass transit. The 80-20 break has been regarded as 
fair all along. This crisis should not make us change that at a 
time when we need more mass transit as well as fixing our 
highway infrastructure.
    Thank you, Mr. Chairman.
    Senator Casey. Thank you, Senator Schumer.
    Senator Menendez.

              STATEMENT OF SENATOR ROBERT MENENDEZ

    Senator Menendez. Thank you, Mr. Chairman and Senator 
Shelby, for having this hearing, and I want to echo what my 
colleague from New York said very much so. We have a lot of 
synergy between our two States. And if you look at some of the 
mass transit systems and the PATH System, which is a subway 
system between New Jersey and New York, you see record 
ridership taking place at this time. But you also see mass 
transit agencies facing record challenges as fuel and other 
operating costs rise. And it is interesting to see that across 
the landscape of the country, at a time where there is greater 
demand for mass transit, there are also mass transit agencies 
cutting back on some services because of the challenges they 
face.
    And so we have a tremendous opportunity to build upon a 
system that moves people effectively and efficiently in, 
generally speaking, a non-polluting fashion and takes cars off 
the road, reduces our demand on foreign oil, and at the same 
time does something about our collective challenges on global 
warming. There are few entities that can do all of those things 
in one fell swoop, and that is certainly our opportunity in 
mass transit that we have dramatically underfunded over the 
years. And now we face the consequences of that underfunding. 
It is time to reinvest in a way that helps us in all these 
challenges.
    I would like my full statement to be included in the 
record, Mr. Chairman, but I would make two final points so we 
can move on.
    One is that some people think that mass transit is for 
those who simply cannot afford the opportunity to own a car, 
and they are so wrong. In my home State of New Jersey, we have 
an incredible number of train stations where the average income 
of a rider is well over $70,000 a year. So this is not just a 
question about low-income individuals or those who cannot 
afford a car to be able to achieve the opportunity to get to 
work having to use mass transit. No. People of higher incomes 
and middle income, upper middle income, see it as a real way in 
which not only is it a savings to them, but their quality of 
life is better because they do not have to physically drive at 
the end of the day.
    And, third, I am proud of what I was able to do as an 
example--and I welcome colleagues to come visit it--when I was 
in the House, as a member of the Transportation Committee, 
where we had a high-speed, non-polluting light rail system 
along the Hudson waterfront that creates the connections to 
opportunities to work, to recreation, and by virtue of creating 
this light rail line, has spurred enormous economic investment. 
What was an abandoned railroad yard is now the location of 
multi-million-dollar homes, businesses, and financial 
institutions. A good deal of that took place by virtue of the 
investment we made in mass transit. It took a lot of people off 
the road, gave them access to employment opportunities, trans-
Hudson crossings, and created the intermodality that we really 
need in this process.
    The final point I would make is that, in a post-September 
11th world, I think this is more than about just economic 
realities and about meeting environmental challenges and also 
meeting our challenges on energy. This is also about creating 
multiple modes of transportation so that God forbid we face an 
event like that which took place on September 11th, of which 
the anniversary is coming upon us, that, in fact, we can have 
different ways of getting people out of a major incident.
    On that fateful day, when the PATH system was closed, when 
the tunnels were closed, when the bridges were closed, it was 
an alternate means of transportation. The ferry system that 
moves tens of thousands of people between New York and New 
Jersey, they got people out of downtown Manhattan into New 
Jersey and triaged to hospitals across New Jersey. So it has 
even that dimension as well.
    I think when we look at all of this, it makes a compelling 
case for the type of legislation Senator Clinton has talked 
about, as well as some that the Chair and the Ranking Member 
have talked about. And I look forward to actually moving in 
this direction in a way that can help us achieve these goals.
    Thank you, Mr. Chairman.
    Senator Casey. Senator Menendez, thank you very much.
    Now we will move to our witnesses, and our first witness is 
Senator Clinton. We are honored by your presence, Senator 
Clinton, not only as a colleague but as someone who cares 
deeply about the issues that bring us together today. And I 
think it is very difficult, especially in the setting of a 
hearing like this, to encapsulate your whole biography. And I 
will not try, but I think everyone in this room knows the 
contributions you have made to this country, starting as an 
advocate many, many years ago, in your work as First Lady both 
in Arkansas and for the United States and for all of America; 
your work in the Senate advocating for those who do not have a 
voice, not only from New York State but for the whole country; 
your historic campaign where you brought light to a lot of the 
darkness that is faced by so many Americans; and I think in 
particular today, the issues that we are discussing here--how 
we reduce our dependence on foreign oil, how we adequately 
invest in transit. And I think you have an understanding--and 
your record demonstrates this--not only the people that ride 
the bus, places in Philadelphia--I remember the 33 bus, the bus 
I was on many years ago. I think you have an understanding of 
what those families are up against in their daily lives, as 
well as the complex challenges of funding those transit 
systems.
    So for your work here in the U.S. Senate and for what you 
have represented for American families, we are honored by your 
presence here, and we are grateful that you took the time to 
provide testimony, and the floor is yours.

 STATEMENT OF HILLARY CLINTON, U.S. SENATOR FROM THE STATE OF 
                            NEW YORK

    Senator Clinton. Thank you very much, Chairman Casey. That 
was way too kind. But I appreciate the attention that you and 
Senator Shelby and the Members of this Committee are paying to 
this issue because I do think this is a win-win-win for all of 
us. This is an opportunity for the Congress to come together in 
the short term, the medium term, and the long term to address 
the multiple challenges that we are confronting in a very 
productive and positive way. So I thank you for your commitment 
to this.
    You have already heard a lot of the reasons from the 
opening statements of the Members of this Committee as to why 
we are here. The kind of challenges that we are facing from our 
energy and security perspective with respect to global warming 
and carbon emissions, to the congestion on the roads, to the 
difficulties that so many people are having today affording the 
transportation for the mobility that Senator Shelby referenced.
    So what do we do about it? And we need to start solving 
problems in America. And no matter who is elected President in 
January, we are going to need a Congress that is committed to 
finding solutions. And as I listened to Senator Dole talking 
about what she had done when she was in a previous 
administration, that is the kind of tangible progress that 
Americans are looking for, where they actually can see and 
touch and feel and experience what Senator Menendez did on his 
side of the river.
    So I hope that this Committee will work with the rest of 
the Senate in moving us toward the long overdue recognition 
that mass transit, public transit, has really the answer to a 
lot of the problems that we face today.
    In the first quarter of this year alone, riders took more 
than 2.6 billion trips on public transportation, nearly 85 
million more than during the same time last year. And, of 
course, as my colleague Senator Schumer pointed out, New York 
City is the epicenter of mass transit. But that is no longer 
the case that it is just a New York City issue or just a New 
York/New Jersey issue. Across the country, in small towns, in 
rural areas, we are seeing more and more public transportation 
being provided and the need and the desire for even more than 
that becoming a public concern.
    You know, more and more transit systems, though, are facing 
the squeeze. These networks were already in need of investment 
just to keep running, let alone to meet the skyrocketing 
demand. They have to pay the high fuel costs as well. With 
these increased numbers, the equipment and the mechanical 
problems also increase. The MTA in New York is thinking about 
putting on subway cars with no seats in order to jam more 
people in.
    So there is a recognition that we had pre-existing problems 
that the good news of people taking more public transit has 
some consequences that are causing our transit systems to worry 
about whether they can continue to provide the services that 
are being demanded.
    Now, what we see is a sense that public transit has never 
fulfilled its promise. Again, I think Senator Shelby sort of 
hit it on the head when he talked about what people expect from 
public transit. If we are going to get them in the doors, how 
do we keep them coming? How do they have a good experience? How 
do they believe that this is a worthwhile commitment for them 
to make every day as they commute to work or go on about their 
daily business? So it is time to make public transportation a 
public priority. It is a public good. It has the opportunity of 
solving all of these problems that we have been discussing.
    That is why I have introduced the Saving Energy Through 
Public Transportation Act of 2008. This legislation authorizes 
$1.7 billion over 2 years to help mass transit systems across 
the country expand and prepare for the massive rise in 
consumers' switching from the driver's seat to seats on 
commuter rail lines and bus routes.
    Now, what happens in New York is that a number of people 
still have cars. We are not a car-less society in New York. But 
they put those cars to one side for the daily activities. They 
use them for special occasions. They use them to go visit 
relatives, to go to some occasion that really does require them 
getting in the car and getting on the highway. But many people 
are now saving money; I think Senator Carper said $1,800 a 
year. And as Senator Dole said, it is $8,000 if you forego the 
second car or if you leave it garaged and you are not using it 
as much as you did before.
    So this proposal will meet the growing demand for 
affordable, convenient public transportation in cities, suburbs 
and rural areas. But I want to recognize that this is what I 
consider to be a medium-term solution. We have the short-term 
problems because of the shortfall in the Highway Trust Fund. We 
know that it is approaching bankruptcy. The Mass Transit Fund 
is facing a solvency crisis. So before we leave, we have got to 
fix that. That is the short-term necessity.
    Now, the National Surface Transportation Policy and Revenue 
Study Commission estimates that $225 billion each year is 
required to meet the country's transportation infrastructure 
needs. That is everything that we do. We are currently spending 
at about 40 percent of that level, so we are falling further 
and further behind.
    So that is why when we consider a new surface 
transportation bill, we have got to cast aside business as 
usual. We have got to think outside the proverbial box. We have 
got to bring every region of our country together looking for 
the long-term solutions, and that will include a comprehensive 
infrastructure policy.
    So, Mr. Chairman, I am excited that we are looking at this 
in the perspective that I think it should be considered: as a 
great opportunity, an opportunity to enhance our security, to 
lessen our dependence on foreign oil, to begin to meet our 
obligations with respect to global warming, to create jobs, 
millions of new good jobs--which we desperately need a source 
of new jobs right now--and to save money for folks, and begin 
to chip away at that congestion which is becoming a bigger and 
bigger problem no matter where you live today in America.
    So it is exciting to be part of this, and I thank you and 
look forward to working with you as we meet this challenge.
    Senator Casey. Senator Clinton, thank you very much for 
your presence here today, and you are welcome to stay, but I 
know you have to go. Thank you very much.
    I wanted to turn to our second witness, Bill Millar. I 
think we will go from left to right--oh, I am sorry. Let me 
just interrupt for 1 second. Senator Tester came in, and I want 
to make sure that we give Senator Tester some time for an 
opening statement.

                STATEMENT OF SENATOR JON TESTER

    Senator Tester. Mr. Chairman, thank you. And before Senator 
Clinton leaves, I want to tell you that I appreciate your 
remarks, Senator Clinton. I think those remarks work well in 
New York City as well as they do in Big Sandy, Montana. So 
thank you very much.
    Mr. Chairman, I would be remiss if I did not point out the 
fact that it is good to see you in that slot and that you and 
Senator Shelby could pass for brothers.
    [Laughter.]
    Senator Tester. And that is meant as a compliment to both 
of you.
    Normally, on Tuesdays from 10 to 12:30, I preside on the 
floor, and I wanted to take a moment to go away from that 
position. And Senator Pryor was good enough to substitute for 
me for the purpose of making some statements at this Committee 
meeting.
    I think this is a very important topic. I want to welcome 
all of the folks who are going to testify here today. I have 
got to go back and preside once I am done making my statement. 
I will scrutinize your testimony, but I appreciate your being 
here.
    The fact is that this is a very critically important issue 
for all the reasons that Senator Clinton talked about, but in 
Montana--and, by the way, Senator Dole, I understand you 
approached it from a rural perspective in some of your 
comments. I appreciate that. I think that, as I said earlier, 
as we struggle with gas prices in rural America, in places like 
Montana, we see people using more public transportation. But 
they have some of the same challenges that we have. Their 
energy prices have gone up, a Missoula provider, 37 percent in 
the last year. They are seeing their ridership go up, but by 
the same token, they are seeing increased pressure that is 
already on overburdened transit districts. Whether that is 
maintaining their fleet and keeping their fleet up to snuff or 
whether that is moving to hybrid or more economical diesel 
buses or buses that can run on vegetable fuel or whatever, we 
need an investment in infrastructure in our transit districts 
if we are going to get our hands around this energy problem. 
This is another piece of the puzzle, the way I see it.
    And so as we go forth here today, I think it is important 
that we talk about what necessary investment is--what necessary 
investment is in urban areas as well as in rural areas. You 
know, I jumped on the Metro here in Washington, D.C., the other 
day--and I come from a State of 950,000 people. That is the 
whole State. Arguably, that is about as many people as in the 
greater Washington, D.C., area. And I jumped on that Metro, and 
I thought to myself, ``What if each one of these folks were 
driving a car right now?'' The fact is it saves a lot of 
energy. It is better for the environmental. And that particular 
system--and I am more familiar with it than others--is a very 
good system for moving people around this District. So it 
works.
    But I think that in the end, folks are going to be looking 
to mass transit--bus systems, in particular, in my neck of the 
woods--for more and more use. Whether it is getting their 
groceries or getting to work, it does not matter. I think 
hopefully, as this conversation moves forward, that we will 
consider absolutely the urban benefits, but let us also 
consider the rural benefits, because I think they are real and 
I think they need to be pursued.
    Thank you very much, Mr. Chairman. I appreciate the 
opportunity to make that statement.
    Senator Casey. Senator Tester, thank you very much, and we 
appreciate your coming over in the midst of presiding.
    The Committee is pleased to welcome Bill Millar back before 
us. Bill has been President of APTA for 12 years, has testified 
before this Committee many times, is one of the Nation's 
premier leaders in mass transit policy. We are grateful that he 
is joining us today and sharing the great news of record 
increases in transit ridership.
    Mr. Millar, we appreciate your being here, and the floor is 
yours.

  STATEMENT OF WILLIAM W. MILLAR, PRESIDENT, AMERICAN PUBLIC 
                   TRANSPORTATION ASSOCIATION

    Mr. Millar. Thank you, Mr. Chairman. It is a pleasure to 
return before the Committee, and I appreciate the you and Mr. 
Shelby have sponsored these hearings, and I am so pleased to be 
back with you.
    I do want to show you the good news of public transit. We 
have seen sweeping changes in the way Americans are traveling. 
The burden of $4-a-gallon gas has caused people to think about 
where they can economize and yet not give up their basic 
freedoms of mobility that are so important to each and every 
one of you.
    I am going to be sharing with the Committee some brand new 
statistics that we are releasing today on a number of the 
issues that are relevant to this discussion.
    First, the second quarter--that is, April through June of 
this year--we have seen about a 5.2-percent increase in the use 
of public transportation; some 140 million times more Americans 
used public transportation in that period. Thinking about that 
another way, that is every day a million and a half times more 
that are using public transportation than just a year before. 
And we remember the year before was a record, and the year 
before that was a record. So we now have an on going trend 
here.
    No doubt about it, the higher gas prices have been part of 
this, but it is also part of a long-term trend of improving 
public transportation in communities that did not have the type 
of systems they now have. For example, as Mrs. Dole has alluded 
to in her testimony, it shows the good work that this Committee 
has been doing for many, many years in trying to improve the 
investment in public transit.
    They may have come to public transit to avoid high gas 
prices, but we are seeing that they are staying because they 
are finding it convenient and it meets their lifestyle. And 
even though gas prices have retreated somewhat in the last few 
weeks, some anecdotal data that we have recently gathered from 
our members shows that even in August, after gas prices had 
already fallen again, the people who came to public transit are 
staying. I have every reason to believe that by the end of this 
year we will have yet another record ridership.
    We heard from several Senators about the amounts of money 
that can be saved by using public transit. Our absolute latest 
data, using information from the AAA and other reliable sources 
shows that you can now save over $9,500 per year on average in 
an urban area in America by using public transportation. It 
certainly helps out as people are facing record food prices, 
record energy prices. By taking public transit, they can 
certainly save a great deal.
    Several of you have mentioned the energy savings of public 
transit, and that is certainly important. The opportunity to 
save many thousands of gallons in individual households, that 
all adds up. Right now, over 4.2 billion gallons of gasoline 
per year is saved by Americans who take public transit today. 
That is 11 million gallons a day. That is 3 times the amount of 
oil that we import from a country like Kuwait. So it is a 
significant savings, and certainly more can be done.
    Now, our transit systems are working hard to meet the 
challenges that arise with so many new customers. A recent 
survey we have done showed, though, that 85 percent were 
experiencing capacity problems on a portion of their system, 
and 39 percent actually report turning away customers. Now, 
that is not something we want to do, but you can only squeeze 
so many people on the bus or the train.
    Typically, we might look to State and local resources to 
help us along, but we are finding that the States are seeing 
declines in their own motor fuel taxes, which often are used 
for transit. We are seeing the States are seeing declines in 
things like mortgage transfer taxes. Local governments are 
seeing declines in property taxes as housing values fall. And 
so there simply is not that local or State revenue. In fact, 
over 58 percent of our members responded by saying that their 
State and local revenue was either declining or, at best, being 
held even this year compared to last year.
    It brings us to the need for additional assistance at the 
Federal level. We certainly believe that we need both short-
term and long-term investment. I want to heartily endorse the 
comments about we have got to save the Highway Trust Fund 
first, and then we need to move into getting additional revenue 
for public transit. We strongly support Senator Clinton's bill. 
We believe that that will help transit systems to meet their 
fuel bills, to avoid fare increases and, worse, service cuts. 
But we also are interested in money that could buy additional 
buses or allow us to speed up projects that could happen 
sooner. And Senator Reid had sponsored the Reid substitute 
during the energy bill of a few weeks back, and so we think 
that combining Senator Clinton's ideas with those of the Reid 
substitute could make money available for the immediate 
problem, but as well as getting additional equipment.
    We look forward to working with the Committee on how best 
to do this. It is certainly an irony that, at a time when 
transit ridership is at its peak, 35 percent of our members are 
in the process of cutting service. Americans cannot use what 
they do not have. If we are forced to cut back with the 
service, then they simply will not have a choice. They will be 
further held hostage at high oil prices, and I am sure that is 
not something that anyone wishes.
    I know I am over my time limit, so let me just wrap up by 
saying thank you, Mr. Chairman, Mr. Shelby, all the Members of 
the Committee. We look forward to working with you as you 
wrestle with these important problems.
    Thank you very much.
    Senator Casey. Thanks so much.
    In the interest of time, I will do introductions of all our 
witnesses, so if there are Members that may have to leave 
before the introductions--or I should say after the 
introductions. But, Senator Dole, I know that in addition to 
the introductory comments for each witness, I know that you 
wanted to introduce Mr. Parker, Keith Parker. Is that correct?
    Senator Dole. Yes. Thank you. I am pleased indeed to 
introduce Keith Parker, who is Director of Public Transit for 
the city of Charlotte and the Chief Executive Officer of the 
Charlotte Area Transit System, the CATS system. CATS is one of 
the fastest-growing transit systems in the country, with 
approximately 1,200 employees, direct and contracted, and with 
an annual budget exceeding $131 million. CATS provides about 
70,000 passenger trips per day on buses, paratransit vans for 
citizens with disabilities, and linked light rail.
    Keith arrived in Charlotte in 2000, serving as chief 
operating officer and deputy director for CATS. In 2004, he was 
appointed assistant city manager for the city of Charlotte, 
focusing on community safety and corporate communications. 
Prior to his arrival in Charlotte, Keith was the chief 
executive officer for the Clark County Transit Authority in 
Vancouver, Washington. He also served as assistant general 
manager for the Greater Richmond Transit Company in Richmond, 
Virginia.
    Keith has displayed a strong commitment to all the 
communities in which he has worked. He served as the 
fundraising chair for the city of Charlotte's Arts and Science 
Council Campaign and most recently served as the public service 
fundraising chair for the United Way. And I hope you were very 
good to the Red Cross during those days. He is on the board of 
directors for Partners in Out-of-School Time--it is called 
POST--and 100 Black Men of Charlotte.
    Keith earned a bachelor's degree in political science and a 
master's degree in urban and regional planning from Virginia 
Commonwealth University. He also earned a master's degree in 
business administration from the University of Richmond. He is 
a graduate of the Senior Executive Leadership Institute through 
the University of Virginia and received certification from the 
American Institute of Certified Planners. In 2004, Keith was 
recognized as a Forty Under 40 Award winner in the Charlotte 
Business Journal as one of the region's most promising young 
leaders.
    So, Keith, thank you very much for being here today. We 
greatly appreciate your time and all the great work that you 
are doing in Charlotte.
    Senator Casey. Thank you, Senator.
    Next we have Andy Darrell, who is the Vice President of the 
Environmental Defense Fund, where he works as the Director of 
the New York Region and as the National Vice President of EDF's 
Living Cities program. He serves on New York Mayor Michael 
Bloomberg's Sustainability Advisory Board. We are very pleased 
to have him with us today.
    In addition to Mr. Darrell, we have Dorothy Dugger, who is 
the General Manager of the Bay Area Rapid Transit, or BART, 
system. She was elected to be BART's first female chief last 
year where she previously served as BART's Deputy General 
Manager. Prior to her work with the Bay Area Rapid Transit, Ms. 
Dugger spent a decade at the Port Authority of New York and New 
Jersey. We are happy to welcome her here today.
    From my home State of Pennsylvania, Dave Kilmer, who is 
from the Red Rose Transit Authority in Lancaster, Pennsylvania. 
Dave has been a champion for small and medium-sized transit 
agencies, both in the Commonwealth of Pennsylvania and across 
the country. As General Manager of Red Rose Transit, a lot of 
the challenges he faces are a microcosm of the challenges 
confronting transit authorities across the country. So we are 
happy for his work in Pennsylvania and Lancaster County.
    And last, but not least, Rob Puentes, a Fellow at the 
Brookings Institution Metropolitan Policy Program. Mr. Puentes 
is a leading author who has studied many transportation and 
land-use issues, published many papers, and testified 
frequently before Congress on these issues.
    So with all of those introductions, we will turn to Mr. 
Darrell for his testimony right now. Thank you.

 STATEMENT OF ANDREW H. DARRELL, VICE PRESIDENT, ENVIRONMENTAL 
                          DEFENSE FUND

    Mr. Darrell. Thank you, Chairman Casey and Ranking Member 
Shelby and Members of the Committee, for the opportunity to 
speak with you today. I am proud that my comments today are 
also endorsed by the Environmental and Energy Study Institute, 
the Southern Environmental Law Center, and the American 
Planning Association.
    It is no secret that over the past year, Americans have 
felt a powerful financial wallop from rising gas prices. 
Transportation is the second largest expense for the average 
American household, second only to shelter--and, in fact, ahead 
of food.
    As a result of the high gas prices, yes, Americans are 
driving less. According to the Federal Highway Administration, 
the past year has brought the steepest decline in vehicle miles 
traveled across the country since the data was first recorded 
in 1942.
    Now, some of this shift means less travel. But Americans, 
as we have heard today, are also turning to transit like never 
before. This map that I have attached to the testimony that I 
handed in to all of you shows the--each green dot on this map 
shows a community across the country with a rise in transit 
use. And what is extraordinary to me about this map--and I live 
in New York City where you sort of expect people to use 
transit. What is extraordinary to me about this map is how 
spread out across the country these green dots are.
    Let me just give you a few examples of the rise in transit 
use: Southern Florida, a 42-percent rise in commuter rail use; 
Charlotte, a 34-percent jump in transit ridership; Minneapolis, 
20 percent; Caspar, Wyoming, 23 percent; Boise City, 40 
percent; Omaha, 8 percent; Denton County, outside of Dallas, 53 
percent. In my home town of New York City, we have 300,000 more 
subway trips every day.
    So these trends are revealing sort of a basic truth: 
Americans are looking for an affordable and a sustainable way 
to get to work. And the question is: Are our transit networks, 
is our Government able and prepared to meet that demand? At a 
time when Americans are turning to transit, can we embrace that 
demand?
    So far, the answer is that our transit networks are trying 
really hard. They are innovating, but they are struggling. Let 
me give you some examples of budget gaps that we are seeing in 
transit networks around the country: Minneapolis, a $15 million 
gap; Nashville, a $3 million gap; Charlotte, $4 million; 
Southern Florida, $18 million; Denver, $19 million; Seattle, 
$70 million. And I cannot even tell you about the many billion 
dollars of capital gaps we have in New York City.
    To respond to that demand, what are transit networks doing? 
There is an extraordinary amount of innovation going on in 
transit across the country, especially in communities that we 
do not automatically think of as transit centers.
    In Charlotte, North Carolina, a new light rail system 
opened last November with projected ridership, I believe, 
around 9,000. As reported in the local papers there, by April 
ridership had reached, I believe, 18,000, surpassing 
projections for the year 2025.
    In Kansas City, Missouri, the new bus rapid transit network 
has cut trip times by 25 percent. It is not surprising that 
with a system like that, you are seeing ridership increase.
    In communities like Maplewood, New Jersey, and Hialeah, 
Florida, van networks pick up suburban commuters on their local 
streets and drop them off at the train station so that 
commuters can leave their cars at home and still get to work.
    In Alabama, the city of Montgomery piloted three new bus 
routes in 2000. Today that system has expanded to 16 routes and 
services almost 400 percent more trips.
    And in Chattanooga, Tennessee, ridership is up 14 percent 
this year as citizens can choose from really an extraordinary 
variety of transit choices: commuter bus routes with Wi-Fi, 
park-and-ride lots, free downtown shuttle buses with emissions-
free electric engines, on-demand van pool servicing rural parts 
of Hamilton County.
    So innovations like these make transit a truly practical 
alternative to high gas prices. And from the point of view of 
the environment, where I come from professionally, from the 
point of view of public health, air quality, climate change, 
this turn to transit is a good thing. This is what the 
environmental community wants to see happening, and Americans 
are doing it right now, are asking for the service to be able 
to do the right thing on behalf of the environment.
    The transportation sector accounts for 30 percent of the 
Nation's greenhouse gas emissions, and in many large 
metropolitan areas, over 70 percent of the added air cancer 
risk comes from traffic. Exposure to traffic pollution is 
linked to an extraordinarily wide range of diseases, from 
asthma attacks to heart diseases, stunted childhood lung 
development, cancer, even, we are seeing in studies now, 
lowered IQ in children.
    So expanding transit is, of course, also essential to 
reducing dependence on foreign oil. Two-thirds of oil in the 
United States goes to transportation, with the largest share 
consumed by cars and trucks. Overall, a typical public transit 
rider, somebody who has access to a transit alternative in 
their community, consumes on average one-half of the oil 
consumed by someone who does not have that alternative, mainly 
because they can choose to integrate transit into their daily 
routines.
    We are really seeking help in four areas for transit 
systems across the country: one, emergency grants to expand 
transit service right now to meet rising demand; support for 
the innovation that we are seeing in communities across the 
country, especially in more rural and suburban communities; 
help so that transit systems can get the most out of their 
existing networks by increasing efficiency, upgrading things 
like signalization that are not the most exciting things to 
talk about but are fundamentally important to be able to move 
more buses and more trains through a system; helping them 
invest in clean fuel buses, hybrid buses to cut the cost of the 
diesel in their fleets; and then, of course, helping 
communities expand access to transit, for example, by making 
transit easier to reach from residential areas through these 
local van pools and encouraging residential development near 
transit hubs.
    I just want to close by noting that, in addition to this 
emergency help, of course, we also need the long-term strategy. 
And I am so encouraged to hear the comments that have been made 
today about the upcoming transportation bill and the 
opportunity that is there between the climate bill and the 
transportation bill to frame a transportation policy for the 
country that embraces this demand for transit that we are 
seeing across the country.
    Thank you very much.
    Senator Casey. Thank you very much.
    Ms. Dugger.

STATEMENT OF DOROTHY W. DUGGER, GENERAL MANAGER, SAN FRANCISCO 
                BAY AREA RAPID TRANSIT DISTRICT

    Ms. Dugger. Thank you, Chairman Casey, Ranking Member 
Shelby, Members of the Committee, for the opportunity to 
testify on this timely topic.
    While California is certainly no stranger to the 
vulnerability of energy markets and rising energy prices, this 
past year has pushed the State with the Nation's highest gas 
prices to even new heights. Since we began service at BART 36 
years ago this week, BART has always played an important role 
in the mobility of the Bay Area. But in today's context, our 
service is becoming an even more attractive transportation 
option for people who are trying to combat rising gas prices.
    With over 360,000 average weekday riders, or more than 104 
customers served each year, our ridership, too, has seen the 
same growth that you have heard about this morning--5.5 
percent. This year for the second consecutive year, that is 
about double our normal rate of growth. In July, we saw 9-
percent growth in our off-peak passenger ridership, and on our 
newest service to San Francisco International Airport, 37-
percent growth. Thank you, Senator Shelby, for your leadership 
in helping us deliver that important and well-used addition to 
our system. Clearly, more people are choosing transit and not 
just to go to work.
    During this past year, however, we have also seen increases 
in our energy costs, about 16 percent this year. BART is 100-
percent electric with two-thirds of our power provided by 
renewable, hydro-electric power. So we are not quite seeing the 
shock of diesel prices that some of my colleagues do, but, 
nonetheless, our costs are increasing as well.
    We use approximately 400 million kilowatt hours annually to 
power our trains and stations. About 75 percent of that is for 
train operations, which is enough to power 11,000 homes for a 
year.
    In order to reduce our own energy costs, BART is partnering 
with our local utility, Pacific Gas and Electric, and has 
identified eight strategies to reduce energy consumption by 
retrofitting our existing fleet of rail cars. I would like to 
highlight just one of these technologies this morning and ask 
that the full report be submitted for the record.
    Our fleet is equipped with regenerative braking, a design 
that redirects electricity generated from the vehicle braking 
back into the third rail for immediate use by a nearby or 
passing train. The new technology that we have looked at would 
install a storage device onboard each vehicle that would store 
the electricity generated from that braking for use in its own 
future propulsion.
    If these ultra-capacitors were installed on all of our 669 
rail cars, we estimate that we could reduce our energy 
consumption by about 25 percent. That translates into a savings 
of about $8 million a year, almost 83 million kilowatt hours.
    Retrofitting our entire fleet is not inexpensive. It would 
cost about $94 million, an amount that would be realized, 
however, through energy savings over about 11 to 12 years. The 
resulting energy and emissions benefits, however, would be 
immediate.
    If we were able to fund all of the efficiency retrofits 
that are identified in the report I have submitted, we would 
save almost 130 million kilowatt hours of electricity each year 
or 43 percent of the power currently necessary to run our 
service.
    These technologies are not unique to our system. They could 
be applied on a national level in a relatively short period of 
time. But it will take a strong Federal partner and increased 
investment to make this possible.
    However, the largest contribution that BART, and other 
transit operators around the country, as we have heard this 
morning, can make to reducing our dependence on foreign oil is 
to provide good transit service--service that is safe, 
reliable, convenient, and frequent enough to serve the growing 
numbers of people who are seeking an alternative to driving.
    Eighty percent of our customers at BART tell us they have 
another way to make the trip that they are choosing to make on 
BART, and most of those say that other mode is an automobile. 
With an average trip length of 14 miles and a 96-percent on-
time performance rating, I believe we are providing an 
attractive alternative to driving, and I think our customers 
are telling us that. In fact, during rush hour, our customers 
are traveling at the equivalent of 249 miles per gallon. And 
according to a recent U.S. PIRG study, riders on our system 
saved about $522 million in fuel costs by riding BART and 
avoided consuming almost 200 million gallons of gas.
    As you have heard from Mr. Millar and others, we are not 
unique. Transit agencies across the country are facing record 
ridership increases as people are driving less due to high gas 
prices. This trend will continue, and coupled with an aging and 
growing population, we and other large rail operators will soon 
be facing a capacity crisis. In fact, today we are removing 
seats from our cars to make more room for standees during the 
peak periods. And successful transit-oriented development, 
another important energy efficiency and resource preservation 
strategy, is also creating new demand for service. The future 
success of this model will depend on transit agencies being 
able to serve these developments with robust, reliable service.
    If transit is to continue to be a viable alternative to 
driving and meet our country's growing mobility demands, we 
must address our core capacity needs. Like the energy 
efficiency technologies I mentioned, the return on investment 
for expanding our ridership is significant and quantifiable.
    Mr. Chairman, the question of whether people will get out 
of their cars and ride transit I think has been answered. The 
new question is: Will we be able to meet this growing demand?
    I look forward to working with this Committee, APTA, and 
our industry partners to achieve the funding levels necessary 
to meet this challenge, both through current legislative 
efforts that are underway as well as the coming authorization 
bill.
    Thank you very much. I am happy to take questions.
    Senator Casey. Thank you very much.
    Mr. Parker.

 STATEMENT OF KEITH PARKER, CHIEF EXECUTIVE OFFICER, CHARLOTTE 
                      AREA TRANSIT SYSTEM

    Mr. Parker. Thank you. Let me first thank Senator Dole for 
the gracious introduction and to again personally thank her for 
the tremendous advocacy she has had for the Charlotte Area 
Transit System, along with Senator Burr, and their staffs, in 
helping us bring real transportation options to the Charlotte 
region. On behalf of the Charlotte Area Transit System, thank 
you very much.
    I have to say, sitting at this table, it is a tremendous 
day. As a father of two girls to sit at a table with Senator 
Clinton, next to Ms. Dugger, and be introduced by Senator Dole, 
wow, what a great story for me to go home and tell my 
daughters.
    But let me thank you, Mr. Chairman and Ranking Member and 
other Members of the Committee, thank you for giving us this 
opportunity to offer some comments about the transit phenomenon 
that is going on in Charlotte.
    According to a recent survey, Charlotte is the best place 
to live in America. Another survey indicates that Charlotte has 
the best housing market in the United States, and yet another 
indicates that we have the lowest downtown vacancy rate of any 
of the other cities of comparable size in the country. Not 
surprisingly, this type of success brings many people to want 
to join us and become residents of the Charlotte area. In fact, 
we are expecting about a 50-percent increase in our population 
over the next two decades--about the equivalent of bringing the 
entire city of Pittsburgh and dropping them within our borders.
    Now, unfortunately, Pittsburgh will not be bringing its 
roads with them when they come to join Charlotte. To deal with 
our growth, the visionary citizens of Mecklenburg County about 
a decade ago decided to pass a half-a-percent sales tax to 
expand mass transit in the area. The investment has proven to 
be quite wise. During that time our ridership has increased 
about 100 percent, and in the past year we have seen ridership 
increase about 41 percent in comparing July 2007 to July 2008. 
Public transit users in Mecklenburg County are saving about 
26,000 gallons of fuel a day by using mass transit.
    To deal with our ridership growth, of course, we have to 
expand our capacity. We are increasing the number of buses on 
the road, trying to make a big commitment to hybrid vehicles. 
We would like to order only hybrids, but, of course, they have 
about a 50-percent premium on them. And like most transit 
systems, we have to make the tough balancing choice of more 
green technology versus meeting the immediate demands of an 
ever increasing ridership public.
    While we are very proud of the overall success of the bus 
system, the segment that has received the greatest attention in 
Charlotte has been the introduction of LYNX Light Rail. Again, 
we thank Senator Dole for her advocacy on that project. This 
new transportation option has truly transformed the city of 
Charlotte and the way people get around. Since opening late 
last year, it has become an icon in the our city, with one of 
our local newspapers writing in a headline, ``Is it the year 
2025 yet?''--wanting to know would we actually reach our year 
2025 ridership goals in our first year of actual service.
    We have seen tremendous ridership, and we have seen people 
now taking LYNX Light Rail not just to get from place to place 
but as a part of the overall experience of their trip. When 
they go to the circus, when they go to the basketball game, 
when they take their kids shopping, they add the LYNX trip 
because they just enjoy it more. It has become truly a part of 
the whole overall quality of life for the city of Charlotte.
    The success has made Charlotte a real hot spot in the minds 
of public transit users around the country. In about 6 months, 
we have seen visitors from all over the country and beyond come 
out to see Charlotte, to hear about the $1.8 billion in new 
investment that has emerged around the transit line. People 
from places like Tampa, Atlanta; Mobile, Alabama, which sent a 
group of over 110 citizens recently, to come out and share with 
the experiences we are seeing in Charlotte.
    They also like to hear about the fact that we are raising 
tens of millions of dollars in new personal property tax 
revenues that are being generated by these new developments. 
Those property taxes are being used to hire new police 
officers, new school teachers, and new firefighters.
    The thing I like to talk to our visitors about mostly, 
though, is the ability of light rail to truly transform 
neighborhoods. In the city of Charlotte, we do a quality-of-
life study every other year. The most recent one was just 
completed in the past 3 weeks. In 2006, they looked at about 
173 different neighborhoods. And they look at everything from 
crime to dropout to teenage pregnancy to home values. And one 
of the neighborhoods that rated the lowest was the Wilmore 
neighborhood. In the 2 years since the 2006 study, the Wilmore 
neighborhood has seen dramatic decreases in crime, has seen its 
teenage pregnancy rate plummet. And these are people of modest 
incomes. They have seen people whose houses were worth $92,000 
just 2 years ago, their average home value is now at $195,000. 
And it just so happens that the Wilmore neighborhood is on the 
LYNX Light Rail line. Charlotte's investment in light rail has 
truly transformed the neighborhoods that surround these light 
rail lines.
    In fact, if you look at all those 173 neighborhoods again 
and you look at the core area where most of Charlotte's growth 
has occurred, only three other neighborhoods have shown real 
growth in terms of their stability and so forth of the 
Charlotte neighborhoods looked at. All three of those 
neighborhoods just happen to be on the light rail line.
    Public transportation truly is about getting people from 
one place to another, but also it is about transforming 
communities. It is about making investments and watching those 
investments pay off.
    Thank you for your time. Again, thank you, Senator Dole, 
and we can entertain any questions.
    Senator Casey. Thank you.
    Mr. Kilmer.

  STATEMENT OF DAVID W. KILMER, EXECUTIVE DIRECTOR, RED ROSE 
    TRANSIT AUTHORITY, AND CO-LEADER, THE 100 BUS COALITION

    Mr. Kilmer. Good morning, Chairman Casey, Minority Ranking 
Member Shelby, and Members of the Committee. I appreciate the 
opportunity to discuss this issue with you today.
    As you know, I am one of the small systems in the country. 
We average 36 peak buses and carry 8,000 people a day, which is 
kind of small in comparison to my colleagues at the table, but 
at the same time, we have the same issues. Fuel costs for us 
went up 67 percent this year, from $1.92 a gallon to $3.24 a 
gallon for diesel fuel. That added $500,000 to our budget, 
which was huge for a small system like us.
    At the same time, we experienced record ridership gains 
that we have not seen in over 20 years. We had a ridership 
increase of 4.4 percent, which is huge for us. And if it was 
not for the passage of the technical corrections bill this 
year, which I would be remiss if I did not thank this Committee 
for your work in doing that, we would have had to cut service. 
But, instead, we actually expanded service. We added night and 
later-evening service on a lot of our routes to try to meet the 
need for the residents of Lancaster County.
    One of the main issues facing small systems is the ability 
to replace old vehicles. Many of us are operating vehicles that 
are well beyond their useful life, and as they get older, they 
are more costly to maintain. And whether I am talking to my 
colleagues in Lubbock, Texas; Lancaster, California; Oklahoma 
City; Martin County, Florida; or even Winston-Salem, North 
Carolina, all of us are looking at ways to get new buses, and 
particularly hybrid buses. It has been shown that in Seattle 
Metro they save 40 percent on their energy costs by operating 
hybrid vehicles. If Red Rose operated all hybrids right now, I 
could save about 150,000 gallons of diesel fuel a year. And for 
the members of the 100 Bus Coalition, which are about 150 
systems, that could translate into about 25 million gallons of 
fuel just for us small systems in savings a year by the use of 
hybrid vehicles.
    Another big issue facing us is facility improvements. We 
are operating in a facility that is now about 30 years old. 
Many of the operating systems are antiquated, and they are not 
very energy efficient. And it keeps our costs increasing trying 
to maintain the facility. Right now, we have money to do the 
design and engineering to try to renovate our facility, and 
some of the things that we are looking at, just because it 
makes good business sense, is looking at ground source heat to 
replace a conventional oil-operated heater, coupled with 
putting solar panels on the roofs of our maintenance and 
storage buildings; plus the use of skylights in our storage 
areas, maintenance areas, and office so we can reduce our 
lighting needs and reduce our electric costs.
    Also, one of my pet things is to include a waste oil 
burner. We generate about half of what we use in heating oil 
just by the normal oil changes of our buses. And while we are 
getting paid 50 cents a gallon for someone to remove it just 
because of the high cost of oil, on the other hand, I am paying 
$3.60 for heating oil. So if you do the math, we could have a 
huge savings if we were able to do some of these energy-
efficient things.
    But they all need to be coupled together because, taken by 
themselves, they cannot provide all of our needs. And we 
estimate that we could reduce the energy consumption of our 
facility by over 60 percent if we had the money to do these 
measures.
    This is common to a lot of the small systems. All of us are 
operating old facilities that are in need of renovations. And 
if we can make these improvements, we could have an immediate 
impact on the amount of energy that is being consumed by our 
transit systems.
    Right now, with our current funding levels, it would take 
me 4 to 5 years to save up enough money to do our facility 
renovations, and I would not be able to do anything with our 
buses. I would have to save up even more money later on to 
replace our old buses with hybrid buses.
    So on behalf of Red Rose and the 100 Bus Coalition, I want 
to thank the Committee for considering our issues, and we look 
forward to working with you in the future on this issue and 
with the authorization for a new transportation bill.
    Senator Casey. Thanks very much.
    Mr. Puentes.

STATEMENT OF ROBERT PUENTES, FELLOW, AND DIRECTOR, METROPOLITAN 
        INFRASTRUCTURE INITIATIVE, BROOKINGS INSTITUTION

    Mr. Puentes. Thank you very much, Senator Casey, Senator 
Shelby, members of the Committee. Thank you very much for 
having me here today.
    Mr. Chairman, I support the transit provisions in the 
substitute to the energy bill, as they are consistent with 
Brookings' research and the policy work on transportation 
reform we have already done and for the many excellent reasons 
that we have heard articulated here today. Yet I believe there 
really is much more we have to do. The Nation needs a 
fundamentally new approach to transportation policy, again, for 
all the reasons we have articulated here today.
    The broader system in the U.S. is no longer aligned with 
the big economic, energy, and environmental challenges facing 
the country. We have already discussed the perfect storm of 
energy and environmental sustainability that is looming, along 
with the high consumer anxiety about the escalating costs of 
transportation-related items such as gasoline.
    With the U.S. set to add another 120 million people by 
2050, these energy prices are likely to intensify. As a result 
of this growth, America will require an additional 213 billion 
square feet of homes, retail facilities, office buildings, and 
other built space. How and where we accommodate that growth 
carries far-reaching implications for the energy security of 
our country, our economic stability, and the health of our 
environment.
    Unfortunately, as a program with its roots in the middle of 
the last century, the Federal Surface Transportation Program is 
outdated and out of step with the energy and environmental 
constraints of our time. For example, Federal transportation 
dollars continue to be distributed to its grantees based on 
archaic funding and distributional formulas. There is no reward 
for reducing the demand for driving, nor overall spending. In 
fact, at the same time Americans are seeking to drive less, 
Federal formulas actually reward consumption and penalize 
conservation.
    Yet we are already seeing transformations of dramatic scale 
and complexity when it comes to how our transportation system 
is operating and how Americans are traveling. We know that most 
people cannot stop traveling, nor should they, but some can 
change how they travel. As we have heard, after years and years 
of steady increases, we have recently experienced the largest 
drops in driving that the Nation has ever seen, and without a 
doubt, some of this decrease is attributable to the 
skyrocketing gas prices which, although they have fallen in the 
last 2 months, are still one dollar per gallon higher than this 
time last year. Americans now consume 31 million fewer gallons 
of gasoline each day in 2008 than they did in 2005, and I agree 
that these are good trends.
    But partly as a result, transit ridership is booming, as we 
have already talked about, and Amtrak ridership this past July 
was at its highest in any single month in its history. There is 
no doubt, again, that these trends are positive for our 
national quest for energy independence.
    Unfortunately, the reality is that the availability and 
accessibility of public transportation across the country's 100 
largest metro areas is seriously lacking. According to the 
American Housing Survey, only 55 percent of Americans reported 
that transit is even available to them. This absence of 
metropolitan travel options means tens of millions of Americans 
are tethered to their cars for their daily travel needs. Many 
simply have no choice but to spend $3, $4, or more for a gallon 
of gas.
    At the convergence of these trends is the realization that 
a substantial market exists for a new form of walkable, mixed-
use urban development around transit stops. We have already 
heard about the diverse real estate markets today in places 
like northern New Jersey, Charlotte, also Salt Lake City, 
Denver, Chattanooga, and many, many others.
    Transit-oriented development has the potential to lower 
household transportation expenses, reduce environmental and 
energy impacts, and provide real alternatives to traffic 
congestion. Residents who live in transit-oriented housing 
typically use transit 2 to 5 times more than other commuters in 
the region.
    However, many of these development benefits are not being 
realized. Such development requires synergy among many 
different uses and functions and almost always involves more 
complexity, greater uncertainty, a tighter regulatory 
environment, and higher costs than other forms of development.
    The Federal Government in this regard can play a critical 
role in supporting the planning of such projects and corridors 
in order to catalyze the nearly $75 billion in public dollars 
that has been invested in rail transit over the past 11 years.
    Mr. Chairman, I believe Federal policy can and should play 
a powerful role in helping metropolitan areas--and so the 
Nation--reduce energy consumption through targeted and 
prioritized investments in public transit and support of 
transit-oriented development. The cross-boundary challenges 
justify a more decisive Federal policy that helps metropolitan 
areas promote energy- and location-efficient development.
    As Senator Clinton mentioned, we need short- and long-term 
strategies. In the short term, the provisions for energy 
funding and the program to boost the energy efficiency of 
transit systems are consistent with this overriding frame. The 
proposed Transit-Oriented Development Corridors Grant Program 
also provides an empowering model and a competitive process 
that supports innovative ideas for growing differently. Over 
the long term, the upcoming reconsideration of the surface 
transportation law provides the perfect opportunity for re-
envisioning transportation policy, as my colleagues have 
already mentioned.
    The Federal Government should establish a clear vision for 
transportation that includes energy and climate change concerns 
and levels the playing field between the modes so energy-
efficient investments can become more feasible.
    A national infrastructure bank, which has been championed 
by this Committee, is an important window through which the 
Federal Government can partner with States, metropolitan areas, 
and localities to implement this bold national vision. But, in 
addition, the Federal transportation formulas should be 
overhauled so funds are not distributed based on factors that 
potentially increase energy consumption and greenhouse gas 
emissions. And to take full advantage of development 
opportunities around transit stops, the Federal Government must 
correct the cost-effectiveness index that determines which 
projects receive New Starts funding. The energy, environmental, 
and agglomeration benefits that accrue to these projects should 
be sufficiently weighted.
    As Senator Dole mentioned, we need to evaluate transit 
projects better. Addressing our Nation's energy problems will 
ultimately require innovation and creativity to link fragmented 
transportation, housing, energy, and environmental policies 
beyond anything that we have considered so far. So a 
sustainability challenge should be issued to unleash the 
innovation that is bubbling up in cities and metropolitan areas 
all across the country.
    Mr. Chairman, in the end my message is simple: a sure-fire 
way of reducing our dependence on Federal Government oil is to 
lower consumer demand. And the best way to lower demand is to 
build more sensible communities that give families greater 
transportation options.
    I look forward to this Committee's ongoing leadership, and 
I want to thank you again for the opportunity to appear before 
you today.
    Senator Casey. Thank you very much. We are going to move to 
questions now, and I will take just a portion of my time, and I 
want to get to my colleagues, and I might come back.
    In the interest of time, but also in the interest of 
repetition, which is important in Washington--to get your point 
across, you have to say the same thing a lot. I am just going 
to focus my initial part of questioning on the three 
individuals who are actually running a system right now, to 
focus very immediately in kind of a lightning round fashion--
that is, for Mr. Kilmer, Mr. Parker, and Ms. Dugger--on what 
your immediate needs are right now in terms of what the Federal 
Government can do. Maybe give me your top two, if you can. We 
can get into longer explanations later, but I think it is 
important for us to hear kind of the priority list and then we 
can go from there. But in any order, maybe Mr. Kilmer. I know 
you spoke earlier of both hybrid buses as a need as well as 
facility improvements, but do you want to--I do not want to 
take your two. You identify them.
    Mr. Kilmer. You just said my two, in that order. Hybrid 
buses and facility needs I think will have the most immediate 
impact on saving oil and produce the best results across the 
country, particularly for the smaller systems.
    Senator Casey. How much would one hybrid bus cost you?
    Mr. Kilmer. Right now the costs are running about $500,000, 
and that is versus $320,000 for a conventional diesel-powered 
bus. We have a tough time trying to balance, I think what my 
colleague said, whether to buy three diesel buses and replace 
older ones or buy two hybrid buses, because running older buses 
is very costly.
    Senator Casey. We are getting some kind of interference 
here. We will wait until that stops.
    Mr. Kilmer. So, yes, we all want hybrids, but the increased 
costs make it very difficult for smaller systems to do that 
balancing act of the need to replace old buses and the need to 
get hybrids.
    Senator Casey. Thank you.
    Mr. Parker.
    Mr. Parker. As was mentioned earlier, we are approaching 
our 2025 estimates in terms of ridership now, and as a result 
of that, we are reaching capacity on our light rail line in 
less than a year. What we are finding is about 8:15 in the 
morning, our largest park-and-ride lots are completely full 
already. We are turning away customers.
    So one of the immediate needs for us would be the ability 
to expand. We need more property to either build more surface 
parking or to build upwards on our parking decks for the light 
rail line.
    Senator Casey. So, in essence, land.
    Mr. Parker. Yes. When we built the system, we built them 
within FTA guidelines, and as a result of that, we essentially 
built the system too small. That is the best way to describe 
it.
    The other immediate need is more rail cars, and we are 
trying to place orders, but, of course, rail cars are in the 
neighborhood of 4 million bucks apiece. And we need probably 
another four to seven so we can run double-car trains at all 
times versus how we have to single and double now and then. And 
I apologize for the jargon.
    Senator Casey. No; that is OK. So just between your two 
systems, different States, different circumstances, there is a 
need for cars of one kind or another. That helps to keep us 
focused here.
    Mr. Parker. Yes.
    Senator Casey. Ms. Dugger.
    Ms. Dugger. I will make it a threesome: cars. Capacity is 
certainly our most immediate and longer-term challenge to 
extract the maximum efficiency out of the public investment 
that is the built system we have today. I think we can, with 
minimal investment in increasing the capacity of that system as 
opposed to building new expansions outward, we can even get 
more value out of that original public investment. And it is 
probably the most effective way that we can provide additional 
capacity in throughput on the existing system. As I said, we 
are taking seats out of our cars today to create more room for 
customers. A redesigned vehicle will give us some capacity 
opportunities, as well as energy efficiency opportunities in 
operating that fleet.
    Senator Casey. And you have got 100 percent electric.
    Ms. Dugger. That is correct.
    Senator Casey. And it is all hydro power.
    Ms. Dugger. About two-thirds of our power is supplied hydro 
today.
    Senator Casey. Interesting. I am going to move so we can 
keep our time here. Senator Corker.
    Senator Corker. Yes, sir, Mr. Chairman, thank you. And I 
appreciate the testimony of all of you, and thank you for 
mentioning Chattanooga so many times. I was mayor there from 
2001 to 2005, and we really are proud of the use of electric 
buses in our downtown area shuttle service, the Wi-Fi, all the 
things we have done to really create a live-work-play 
environment. And while it is certainly not like some of the 
Northeastern cities that are more dense, we have come a long 
ways. It sounds like Charlotte is doing--is probably ahead of 
us, but doing much of the same.
    I also funded, if you will, the public system there, and 
each year there were needs, and it certainly was interesting to 
hear of the diverse needs here at the table, much of it about 
capital. And, you know, I guess the thing that drove us in our 
city to do what we have done successfully was the words 
``sustainable development.'' I know that word is kind of not as 
much of a buzz word today, but I want to say that Senator 
Menendez mentioned something that I, too, was very excited 
about after 9/11, and that was a focus, hopefully, on trains 
being a mode of transportation throughout this country. It 
would be another way for this country to feel more secure. Our 
community has pursued heavily a mag-lev operation from 
Chattanooga to Atlanta, hopefully on up through the Midwest or 
Northeast.
    So my point is I really do support the efforts that each of 
you are involved in. I understanding that communities are 
different, and sometimes it is that one passenger, if you will, 
the most expensive passenger at the end of a long run that 
depends most heavily on mass transportation, otherwise could 
not make a living. And I know we have to make choices as to 
services. You are constantly doing that in your own jobs.
    Here is the question I would have. We are constantly 
looking--you heard us talking about the Highway Trust Fund and 
the Mass Transit, and there are other choices that we are 
constantly having to make here. We talk each year about Amtrak 
and whether it should be making a profit or not.
    Is there a norm, if you will, that each of you look to as a 
system, if you will, that is running in a certain way that--or 
norms that you look to to really cause public transportation to 
be even more sustainability, if you will? I know that most 
operate with a subsidy. Most of you have capital needs. Is 
there something that we as policymakers should be looking to as 
a norm, as something we should sort of aspire to in mass 
transit to make it more sustainable in our country? Mr. Millar, 
I would appreciate you grabbing the mike, and since you 
represent the association, maybe you can best share that.
    Mr. Millar. Thank you, Senator. We encourage our members in 
their communities to set their goals. As so many Senators have 
said today, as the testimony has shown, different communities 
have different needs. For some, the transit system is a basic 
lifeline, and that is the most important aspect. For others, it 
is to carry high volumes of urban commuters. And there are so 
many other ways to go.
    So we encourage our members to set goals, then develop 
performance measures out of that. We do not find that there is 
a single norm that is really applicable to the systems across 
the country. But it is important that each system set its 
goals, set its performance measures so it can see how it is 
doing against its goals, and then report back to the public on 
how they are doing.
    Senator Corker. I know that each of you as you grow, it 
actually puts financial pressures on because you have capital 
needs, as you have mentioned. Are there systems in other places 
around the world that have been able to operate at no subsidy 
levels? Or is that just something we need to know is going to 
exist into the future?
    Mr. Millar. In Western societies and industrialized 
societies, investment, as we would call it--you might call it 
``subsidy''--in public transit is the norm. In fact, for that 
government investment, you are actually buying things. You are 
buying cleaner air. You are buying more energy security. You 
are buying less traffic congestion. You are getting something 
back. The difficulty in transit is the costs all show up on our 
budgets, but the benefits show up throughout the society.
    Now, there are places that have done more with recouping 
their costs through capturing some of these benefits directly 
for transit. For example, I was in Hong Kong a couple years 
ago. We always hear that the Far Eastern systems often run 
without subsidy. But what I learned was that instead of getting 
a subsidy from the general coffers of the government, they have 
been given great freedom to develop the real estate around 
their stations; and so instead of what we might call a typical 
public subsidy, they get it by being allowed to harvest for the 
transit system what in this country would normally go to 
private investors as private profit.
    I do not think that we are likely to be ready to make a big 
move in America to stop private profit. I certainly would not 
advocate that. So we have to be very careful when we look for 
models elsewhere in the world. But there are certainly many 
things that could be done, and many systems are working to 
increase their return. But we have to be very careful as we 
make these international comparisons.
    Senator Corker. Yes, sir.
    Mr. Puentes. If I can just quickly, the one example or one 
anecdote, particularly in Western Europe, is the way that they 
think about transit systems and the way, the data, and the 
analytics that they use to measure the quality of those 
investments. I think in this country, we have not really done a 
good job in collecting information and then making the case for 
the benefits of transit or other kinds of transportation 
investments by linking it to other areas. I think in Europe, 
particularly in the U.K., the benefit and cost analysis that 
they do for transit investments and other investments includes 
things like energy consumption, greenhouse gas emissions, 
equity concerns. It includes all those things that we know that 
transit and transportation is connected to. We just have not 
done a good job in this country in analyzing those investments 
so we can make prioritized injections where we need to.
    Senator Corker. I think that is really an interesting 
comment. In most of the discussion around mass transit, there 
are anecdotal reasons given to do it, and that, you know, you 
just hit on the fact we do not actually look at it systemically 
and see what the true costs are. And I think that is--or what 
the true benefits are, which lessen the cost. I think that is a 
very interesting comment. You know, being--I know building, for 
instance, lots of new garages in a downtown area, parking 
garages, there is no return. I mean it costs a fortune. And 
yet, you know, public transportation can keep that from having 
to occur, if you will.
    So I would say just in general to the association that it 
seems to me as we move ahead and look more at public 
transportation into the future, it would be very beneficial if 
some form of systemic looking at public benefits could be 
discussed--and I am talking about public benefits that actually 
public citizens typically would have to pay. I think that would 
be not just to society, if you will, but those public benefits 
that otherwise the government would have, I think that would be 
very useful to all of us as policymakers and I think very 
useful to all of you who are on the ground.
    Mr. Millar. We would be very pleased to supply you with 
information, and with the permission of the Chair, perhaps I 
would distribute it to the Committee as well as to Senator 
Corker in particular.
    Senator Corker. Thank you, Mr. Chairman, and I thank all of 
you for your testimony.
    Senator Casey. Thank you, Senator Corker.
    Senator Carper.
    Senator Carper. Well, this is a pretty good hearing, isn't 
it? We appreciate very much you all being here and sharing with 
us your experiences and the leadership that you are providing 
in communities across our country.
    I listened to Mr. Millar talk about the advantage that 
accrues some of the operators of mass transit outside of this 
country and how they use real estate. I used to be on the 
Amtrak Board, and we found ways within Amtrak to use our right-
of-way as an asset that we could sell or lease, for example, 
for fiberoptic. And I always thought it made sense to try to 
wield electricity, especially in the Northeast corridor between 
Washington and Boston, there is major real estate development 
up at 30th Street Station in Philadelphia, a beautiful 
building. And we are about to undertake a major redevelopment 
of the Wilmington train station, which is right in the middle 
of our riverfront in Wilmington, Delaware. And it used to be 
sort of like the crown jewel of the riverfront, and today it is 
a little shoddy compared to everything else that has gone on 
there in the last 10 years. But they are some things that--some 
ways to use even the assets that the railroads especially--and 
that includes Amtrak--already enjoy.
    Maybe a question to start off with Mr. Puentes and Mr. 
Darrell. I think maybe it was Mr. Parker from Charlotte, North 
Carolina--Mr. Parker mentioned in his testimony that his 
transit agency has ordered hybrid buses with funding from the 
Congestion Mitigation and Air Quality program. In the past, 
some States have chosen--I am told some States have chosen not 
to use their CMAQ funding, while at the same time we are seeing 
that there is a need for more funding for transit and for 
roads.
    Let me just say, as we consider funding and providing 
additional funding for transit and for roads, are you aware of 
some States that may not be using all of their CMAQ funds. And, 
again, this would be for Mr. Puentes and Mr. Darrell. Are they 
leaving some money on the table from their CMAQ money?
    Mr. Darrell. I do not have figures with me today to share 
with you on that. I have heard anecdotally, as you have, that 
there are some cases that I know about, particularly examples 
from here or there. I also understand that sometimes the 
capital spending decision at the local front does not always 
match up in time and the right cycle with the availability of 
the Federal funds.
    You know, I think the--I would be happy to look into that 
and see if we can provide you with the specific.
    Senator Carper. Would you please?
    Mr. Puentes.
    Mr. Puentes. Thank you, Senator. Indeed, there are some 
States that have not spent down CMAQ funds. I think as the 
budget crises get tighter, we may see some movement there. But 
the interesting thing to consider when we think about CMAQ 
funding and some other programs is that there are certain 
States that take those CMAQ dollars and sub-allocate them 
directly down the metropolitan level. I think that many of us 
who believe that CMAQ is a program that has its roots really on 
the metropolitan level, and investments like you just talked 
about really are things that probably are best administered on 
the metropolitan level, on the local level.
    So those places where we see those funds being sub-
allocated to the metropolitan level, particularly in 
California, we see a much greater result in spending those 
dollars and spending it far greater on transit than other kinds 
of investments. So the interesting thing to look at is not just 
which States are or are not spending, but what the States do 
with those funds and how they are spent on the metropolitan 
level. I think we see some interesting diversion trends.
    Senator Carper. All right. Thank you.
    Again, Mr. Darrell, I appreciate your willingness to 
respond additionally for the record. If you could do that, I 
would be grateful.
    A second question I think for Mr. Kilmer, for Mr. Parker, 
and for Ms. Dugger. I am told the AARP recently found that more 
people are trying to walk and to use transit. About half the 
people who might want to walk or to use transit have no 
sidewalks or really a safe way to walk to transit stops. How 
does this impact your operations? Are your agencies including 
this in discussions that go on with respect to, say, street 
design? Does your DOT consider the impact on transit access of 
roads that are built without consideration for pedestrians?
    Mr. Parker. I can start, if that is OK.
    Senator Carper. Sure.
    Mr. Parker. Along with the city of Charlotte's big 
commitment to public transportation, we also saw the need to 
buildup the infrastructure around the train stations and around 
many of our bus stops. And so the short answer to your question 
is, yes, we have made that commitment because we recognize if 
people cannot walk to the bus station or the train station, 
there is really--that sort of defeats the purpose in trying to 
attract them as customers.
    The other thing we have tried to do is make some smart 
choices in regards to some of the technology we use. We are 
purchasing almost all low-floor buses now, buses with a 
kneeling feature, so people who have difficulty walking, 
particularly seniors and others, can have easier access to the 
vehicles. On the light rail line, for example, that is also a 
low-floor car, which allows the customer, without having to 
walk up any steps, easy access onto the platforms and easy 
access onto the vehicles themselves.
    So we are trying to do the small things to attract the new 
customer base. Traditionally, seniors do not ride transit in 
very high numbers. It has been one of the market areas over the 
last 5 years that in Charlotte we have been able to increase 
dramatically. And we think we have done that through increased 
marketing, for one, but also by making those, what seem to be 
relatively simple but real improvements to make the service 
easier to navigate and to access.
    Senator Carper. Before your two colleagues respond to the 
same question, just a real quick question. The hybrid buses 
that you all have been buying and the low-platform vehicles, 
are those made in America?
    Mr. Parker. Well, we are required that all buses need to 
meet ``buy America'' requirements, so yes.
    Senator Carper. All right. Thank you.
    Ms. Dugger or Mr. Kilmer.
    Ms. Dugger. Yes, thank you very much, Senator. One of the 
places where we can have one of the most direct impacts on the 
issue of pedestrian walkability of access to our stations is in 
transit-oriented development projects where we are partnering 
with others and developing land that we actually control. And 
certainly pedestrian, bike access in that planning activity is 
an important consideration, and we, in fact, have established a 
hierarchy of access as we look at our station area planning 
activities with pedestrian and walking being at the top of that 
tiering.
    In our area, our MPO has also been an active advocate and 
has provided particularly some of the flexible funding that we 
were just discussing to the counties and cities who are 
developing pretty comprehensive pedestrian and bike plans that 
are being knit together on a regional level. And they in some 
respects are in the better position in terms of control of the 
decisionmaking and funding activities.
    So in terms of our priorities, we look first where we are 
an active partner, an owner of property, and, second, where we 
can be a partner in advocacy working with the communities that 
we serve.
    Senator Carper. All right. Thank you.
    And maybe just very, very briefly, Mr. Kilmer. My time has 
expired.
    Mr. Kilmer. Sure. In Lancaster, it is very rural. In fact, 
we have one bus route that is 28 miles in one direction and 
probably 20 of that is a rural road with no sidewalks 
whatsoever. So as we try to place bus shelters and other 
amenities at some of those more heavily used stops, we try to 
incorporate sidewalks and other things so that people feel safe 
when they are waiting for a bus along a rural road. And we work 
very closely with our county MPO and with the townships locally 
to try to impress upon them the need for sidewalks for new 
developments.
    Senator Carper. Good. Thanks. Again, our thanks. This was a 
great hearing.
    Mr. Chairman, thank you.
    Senator Casey. Thank you, Senator Carper.
    Senator Menendez.
    Senator Menendez. Thank you, Mr. Chairman.
    I would like to ask any one of you listening to the 
Secretary of Transportation's call to the Majority Leader for 
urgently filling $8 billion to the Highway Trust Fund, does 
anyone on the panel believe that the appropriate way to do that 
is to take the money from the Mass Transit account?
    Mr. Millar. No, sir, we do not believe it should come from 
the Mass Transit account.
    Senator Menendez. The silence of the rest I will take as 
that you agree with Mr. Millar.
    Mr. Darrell. We certainly do.
    Ms. Dugger. Completely.
    Senator Menendez. All right. Thank you. Then here is our 
challenge. I say that a lot less in jest than in saying some of 
the challenges of what we have here. We have heard an excellent 
panel, excellent presentations. I am foursquare with all of you 
collectively in what you have said. And the difficulty is that 
we just have some of our colleagues who do not fully understand 
the dimensions of how beneficial this is.
    So I would like to go to the next step, which is say let us 
say we can get over that hurdle for argument's sake. Mr. 
Millar, there are different views as to how we pursue 
investments in mass transit. You have Senator Clinton's 
legislation, which is obviously a direct investment. You have 
some who are suggesting that maybe competitive grants that deal 
with making more mass transit more energy efficient is a more 
appropriate way. If you had the ability to prioritize, how 
would you prioritize it?
    Mr. Millar. Let me share some information, and perhaps it 
goes to the Chairman's question earlier as well. In the survey 
we just conducted, when we asked our members what was the 
immediate need, 56 percent said it was to purchase fuel, that 
they were really having difficulty, diesel fuel prices up 166 
percent for them. Another 20 percent, as the panelists 
indicated to you, said also the immediate need was for new 
transit vehicles, and then the rest of it was split different 
ways.
    The reason I said in my testimony that I think we need to 
take the best of Senator Clinton's approach and the work that 
had been done by Majority Leader Reid in the Reid substitute 
this summer was that both things are necessary. If we buy 
capital equipment and do not have money to operate the 
equipment, well, we really have not helped anyone very much. If 
we simply get money for fuel, but we cannot put additional 
equipment out there, again, you can see the catch-22.
    So that is why we believe that a joint approach--but the 
key is we need the money quickly. Transit systems are in the 
process now of raising the fares. They are in the process now 
of cutting the service. Americans need these choices now, and 
so we would certainly encourage the Senate to act as quickly as 
possible.
    Senator Menendez. And just to take a further step in that, 
if you got that type of assistance now, isn't it true that you 
would capitalize on the increased ridership in maintaining it 
as a more permanent ridership so that an investment now goes 
beyond meeting the emergency of the moment, but actually 
hopefully creates transit systems that are efficient, 
effective, and at the same time cost-effective for the rider 
and, therefore, captures this new universe who have moved to 
the mass transit system in a way, because of gas prices, it now 
makes them a more permanent ridership?
    Mr. Millar. Absolutely. They may have come to public 
transit to beat the high cost of fuel, but they are going to 
stay if it is convenient and meets their needs. So absolutely, 
sir, you are correct.
    Senator Menendez. And in that respect, to my good friend 
Senator Corker, who always asks questions that I find very 
relevant to the issue we are discussing and often hits it on 
the head in terms of what some may not mention but is the 
underlying issue, the question of how we evaluate or whether we 
subsidize or whether we can expect such systems to be totally 
self-sufficient and even make a profit. And I think you 
described some of that, as well as Mr. Puentes.
    Let me ask you, Mr. Puentes, I think you mentioned in your 
opening statement about valuation, how we value this process 
and how we look at it. It seems to me that we do a pretty poor 
job in ascribing the benefits of a mass transit system and 
adding those as part of an equation. For example, creating 
ratable bases where there were none along the Hudson River 
waterfront, where we had abandoned railroad yards and now have 
not only great residences but great places of business where 
people get to work and have economic opportunity. That is a 
ratable base. It is an economic opportunity base. It has an 
environmental base to it in terms of air quality, global 
warming. What we spend in a State, just to take mine, for 
example, where we have such a high incidence of cancer and many 
respiratory illnesses, what do we spend on the public health 
side in dealing with that; how we look at issues of taking land 
management and creating transit villages where there is already 
the nexus of bringing people to a location and taking the air 
rights over those properties and creating developments that 
make a lot of sense in multiple ways.
    Shouldn't we be looking at the valuation aspects of this in 
that wider range?
    Mr. Puentes. Thank you, Senator. I could not have said it 
better myself. I think that the scrutiny that we place on the 
Federal level to transit proposals now is generally the right 
idea. We need to make sure that we are spending Federal dollars 
on the best kind of projects. It is hyper-competitive now. The 
demand for transit, as we have heard, is very, very high. 
Communities all across the country are looking for transit 
investments, particularly in the South, West, fast growing 
parts of the country.
    So we need to prioritize those investments. I think the 
problem that we have now, particularly as it relates to the New 
Starts Program, is that we are not measuring the right things. 
It is not enough to just have a measurement process. If we are 
measuring the wrong things, we are not going to get the best 
kind of projects.
    So I think what it does now is just too limited. We measure 
things, lost cost savings and there is cost effect and there 
are some small measures in there right now. But we don't 
capture the things that you just talked about which I think, as 
we've said this morning, are critically important to how we 
evaluate transit projects. Energy benefits, environmental 
benefits, we have a housing crisis in this country, housing 
should be a part of it, public health, all of the things you 
mentioned.
    I think that the Federal Government has a very clear and 
very profound role to play in laying out what that vision 
should be, and then the construction of those formulas to meet 
that vision. Right now, without that big, bold, Federal vision, 
we have these formulas and these processes which clearly, I 
think as you mentioned, are very lacking.
    Senator Menendez. And if we did that, then what we might--
what those who would call a subsidy--the numbers might be 
dramatically different.
    Mr. Puentes. I do not think there is any question. As you 
hinted at earlier, if there is a fiscal crisis that we are 
facing, if you are trying to convince your colleagues and other 
members that we are spending American taxpayer dollars in the 
most effective and efficient manner possible, we are going to 
have to do a better job in measuring how we are doing that.
    Senator Menendez. Thank you, Mr. Chairman. I thank the 
panel.
    Senator Casey. Thank you very much. I just have a couple of 
concluding questions and if there are comments before we wrap 
up, that is certainly appropriate. I wanted to go back to the 
Bay Area for a second.
    Ms. Dugger, I have to apologize to you. I think I 
mispronounced your name before. I was saying Dugger instead of 
Dugger, and I am sorry about that.
    Ms. Dugger. That is fine. Thank you.
    Senator Casey. I wanted to ask you, you had mentioned--and 
I just want to have a better understanding of it--about 
retrofitting rail cars to provide more energy savings. Can you 
tell me a little more about that, how that works and whether 
there is application to other systems or other situations 
around the country?
    Ms. Dugger. Yes, we have just completed, as I mentioned, 
some work with our local utility provider to look at energy 
efficiency retrofit opportunities and have identified a 
potential universe of about eight, ranging from lighting 
retrofits to redirecting cooler air into the HVAC systems, et 
cetera.
    The one that I focused on this morning and that, frankly, 
has the biggest single conservation opportunity is associated 
with regenerative braking features on the BART system that is a 
new ultra capacitor storage capability that we could locate 
potentially--we have some further testing of the concept to 
apply it to our specific system--but located on the vehicle 
itself that would allow for longer storage of that regenerated 
energy for use in propelling the car itself. So there would be 
less draw from our third rail power, that would be supplemented 
by the draw from this stored capacity in the car itself.
    This is a technology that has been applied and is in 
revenue service, I believe, in a light rail application in 
Germany. We are unaware of any application currently in place 
in the United States. There are a couple of other properties 
around the country who are looking at the same concept but 
located on the wayside rather than on the vehicle itself.
    Senator Casey. I just want to make sure I understand what 
you mean by that. You are storing what?
    Ms. Dugger. It is kinetic energy that is created by the 
velocity of the rail vehicle. And when the brakes are applied--
I am going to fast get out of my electrical engineering 
capabilities here, Senator--but to take that kinetic energy, 
currently the design of the BART system transforms that into 
energy that is fed back into the third rail, our major source 
of power. If there happens to be a passing train within 
proximity, space, and time, that passing train can draw some of 
that power that was created by the movement and braking of the 
vehicle, as opposed to from an energy-supplied power source.
    BART was one of the first systems where that design was put 
in place in the United States. It has been fairly common in 
most systems built since ours in the late 1960s.
    What we are talking about today, the new opportunity, is a 
better battery, a better storage device that could be located 
on the cars that could hold that same power that is created 
through the movement of the vehicle and the braking, hold it 
longer, store it longer for use for a longer period of time and 
reducing the draw from our externally supplied electricity.
    Senator Casey. But when you talk about retrofitting in 
terms of the cost, how much of that--or can you absorb all of 
that? Is that another area where you need help?
    Ms. Dugger. We do not have a budget for that application. 
We have provided funding out of our own operating revenues this 
year to conduct the demonstration and further testing of the 
installation. But the total cost of retrofitting our entire 
fleet of 669 vehicles, about $94 million, we do not have an 
identified funding source for that.
    In the Bay Area today, we are consuming not only all of the 
Federal Formula Fund and Flexible Fund--and our region flexes a 
lot of dollars over to transit--as well as a strong self-help 
funding commitment by our local citizens through local sales 
tax and are not meeting the basic needs to maintain our 
existing systems, much less do these kinds of good, cost-
effective investments that will pay back over the long term. 
But we do not have an identified source of capital, no.
    Senator Casey. But you think you could save as much as 
almost 45 percent by implementing all of the changes you are 
talking about?
    Ms. Dugger. That comes with a larger price tag, about $130 
million. But yes, those are the numbers that we have calculated 
based on our modeling and experience of our utility company.
    Senator Casey. Well, it is at times like this that we wish 
the Federal Government had a capital budget to help on a lot of 
things, including transit.
    I did want to, before we conclude, I wanted to ask about 
Mr. Millar's testimony. You mentioned the APTA study showing 
public transit saves America 4.2 billion gallons of gasoline 
each year. I was going to ask Mr. Darrell, just from an 
environmental standpoint, we hear numbers all the time and they 
are big numbers. Some people understand them, some people do 
not. Some people pretend they understand them, some are most 
honest about it.
    But what is the significance of that in terms of our 
environment? I know it is kind of a broad question, but is 
there any way to kind of put that kind of a number into context 
in terms of our environmental concerns?
    Mr. Darrell. Sure. We would be happy to run some numbers to 
show you what 4.2 billion gallons would translate into in terms 
of air pollution, greenhouse gas emissions. I think that one of 
the opportunities here is to look at a transportation 
investment and ask the basic efficiency question, if we are 
going to try to move a certain number of people from point A to 
point B, or a certain number of goods from point A to point B, 
what is the most efficient way to do that? What is the right 
mix of roads and transit that gets us there with the fewest 
emissions with the most convenience.
    At a time when the transportation sector's emissions are 
the fastest growing set of greenhouse gas emissions in the 
country right now, to about 30 percent of the greenhouse gas 
impact, and in many cities about 70 percent of the local air 
cancer risk, asking that question in the planning process and 
testing our transportation networks across agencies, the 
highway agencies, the transit agencies, asking them to come 
together and say look, let us design a system for performance 
on the environment and on efficiency. That is a fundamentally 
important step that is not always taken.
    And I think as we look toward a reauthorization of the 
Federal transportation bill or action on a climate bill, to 
reward communities and States that are taking that step, to 
plan essentially the roads and the transit together as one 
system, it is asking the question how do we perform the best in 
terms of the environment? How do we perform the best in terms 
of the economics and the efficiency of the system?
    There is no question that in order to deal--I think in 
California right now, the State of California passed the first 
cap on greenhouse gas emissions of any American State, an 
economy-wide cap. And the State agencies now are trying to 
figure out how to meet that cap.
    And one thing that they have realized from the 
transportation sector is that we are not going to get there 
through increases in efficiency of automobiles alone.
    In other words, there is an enormous amount--I cannot 
remember off the top of my head what the number is, maybe you 
can help me if you do. But essentially, in order to meet the 
cap that California has set for itself, we have to go well 
beyond automobile and truck efficiency. We have to get into the 
realm of more transit and cleaner freight infrastructure. And 
there is a certain target that they have set, that they have 
identified as a necessary reduction in greenhouse gas emissions 
from non-pure efficiency gains, but actual transit investments, 
transit-oriented development, that kind of thing.
    That conversation that is playing itself out in California, 
I believe will play itself out nationally as the country tries 
to figure out how do we deal with our own climate policy? What 
is the best approach here?
    So to help the communities now that are finding ways to get 
those tons of carbon dioxide out of the air right now by 
investing in transit, that is the fundamental and essential 
first step, to plan those two things together.
    And I will be happy to get you the specific numbers on that 
4.2 billion.
    Senator Casey. I appreciate that.
    Mr. Millar. Senator, may I comment on that, as well?
    Senator Casey. Sure.
    Mr. Millar. Let me give you a big number and then let me 
give you a number that I think answers your question. The big 
number is that it is about 37 million metric tons less carbon 
in the air because people use transit. What does that mean in 
sort of every day terms?
    If you had a typical American household, two commuters, 
both driving separately to work, and just one of those 
commuters starts using public transit, you find that gets you 
about a 10 percent savings in that household carbon footprint.
    Well, what is that? You know, we are all told we should 
change to compact flourescent lights and that is a good thing 
to do. We are all told we should winterize our homes. That is a 
good thing to do. We are all told to get rid of our old 
refrigerator, get an Energy Star appliance. All good things to 
do.
    When you have done all of those things in your household, 
you have not saved as much as the 10 percent you would have 
saved if just one person in the household started taking 
transit. That is the significance of transit investments.
    We hear some people say how to reduce carbon footprint is 
going to have an enormous disruption in American life. It will 
not. If you took that same household, they started using public 
transit, found it worked, they sold their second car. They kept 
their first, they sold their second car. Now you are saving 30 
percent of your household carbon footprint. That is more than 
if your household could do without electricity all together.
    So I think when we take these huge numbers, and I apologize 
that sometimes we present those kinds, and bring them down to 
this kind of thinking, Americans--by making simple choices--can 
do a lot for the environment without sacrificing mobility, 
without sacrificing the way they live.
    But they have to have options available and only about 54 
percent of all American households have any form of public 
transit at all. So that is why we need to invest in more public 
transit. Americans can make the choices that then will just 
naturally reduce the carbon and we will be a long way down the 
road to solving our problems.
    Senator Casey. I would say thank you for that closing 
statement. Thank you.
    Mr. Darrell. Just a quick statistic. If every American 
drove 10 fewer miles per week, we would save enough energy to 
power about 8 million homes across the country. So that is the 
scale of the opportunity that we are taking about.
    Senator Casey. Anyone else before we conclude? I know it 
has been a little more than 2 hours so I know people are ready 
to wrap up.
    Thank you very much for your time and for the expertise, we 
are grateful. Again, Ms. Dugger, I will pronounce it better at 
the end of the record than I did at the beginning of the 
record.
    Ms. Dugger. Thank you very much. Not to worry.
    Senator Casey. Thank you very much.
    [Whereupon, at 12:16 p.m., the hearing was concluded.]
    [Prepared statements and responses to written questions 
supplied for the record follow:]

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


  RESPONSE TO WRITTEN QUESTIONS OF SENATOR REED FROM WILLIAM 
                             MILLAR

Q.1. The emphasis of federal transit funding has focused on 
helping public transportation agencies make capital 
improvements. While transportation agencies can typically use 
bonding authority to raise the funds they need for capital 
improvements, they often have less flexibility to find new 
sources of revenue to respond to escalating operating costs. 
For example, the Rhode Island Public Transit Agency is 
dependent on a share of state gas tax revenue to meet much of 
its operating overhead. Unfortunately, that revenue stream does 
not keep pace with inflation, and as gas prices have climbed 
this year (and as more drivers have turned to public 
transportation), it has declined.
    With increases in energy and other operating costs, are we 
at a point where we should recalibrate where federal public 
transit funding is allocated by dedicating at least some 
support to operations?

A.1. Senator Reed, you are correct in observing that public 
transportation systems need assistance not only for capital 
projects; they also need help with maintaining their current 
services. Public transportation systems across the United 
States are being forced to choose between raising passenger 
fares or cutting service to make up for shortfalls in local 
funding related to the current economic downturn and the 
increased cost of diesel fuel this past summer. The burden is 
so great that 35 percent of public transportation providers who 
responded to a recent APTA survey have been forced to cut or 
are considering cutting the level of passenger service they 
provide in spite of the growing demand for their services. This 
could not happen at a worse time. Public transportation 
ridership has grown dramatically this year, and we need to 
continue that growth.
    To address the current operating environment facing transit 
providers, it is essential that support for agencies facing 
increased fuel costs and reduced local funding be retained in 
any future stimulus or economic recovery legislation. Transit 
systems need flexibility in any supplemental funding to expand 
their facilities, acquire new vehicles and simultaneously 
maintain their current operations.
    In the longer term, APTA supports the creation of a new 
program to leverage state and local transit investment by 
offering incentives to encourage states and localities to 
create and expand dedicated funding sources for public 
transportation that can be used for either capital or operating 
expenses. Federal incentives that reward states and communities 
that establish or expand dedicated sources of funding for 
public transportation would address many of the challenges of 
the present operating environment, strengthen the federal, 
state and local partnership that benefits public 
transportation, and provide a strong base of financial support 
for future growth in public transportation ridership.
                                ------                                


 RESPONSE TO WRITTEN QUESTIONS OF SENATOR TESTER FROM WILLIAM 
                             MILLAR

Q.1. What are the specific challenges--such as economies of 
scale--that you envision in helping smaller transit districts 
transition from traditional fuel buses to cleaner power 
sources? What should be done to help smaller communities 
address these challenges?

A.1. Public transportation systems in the U.S. face two 
problems in replacing current diesel buses with new clean fuel 
vehicles. First, transit providers are having great difficulty 
replacing buses that have exceeded their expected service life. 
Bus procurements are often the largest capital expenditure made 
by small and medium-sized transit systems, and transit 
providers of all sizes must carefully assemble federal, state 
and local funding commitments before completing a bus order. As 
transit systems struggle to meet the record growth in demand 
for transit services, they simply do not have the resources to 
replace their buses quickly. State and local transit funding, 
which supports both operating and capital expenses, is being 
used by agencies to maintain current service levels as demand 
for transit has increased and to accommodate record increases 
in transit fuel costs. Meanwhile, despite growth of the federal 
transit program, federal funding has not kept up with growing 
transit capital needs or inflation.
    A recent study by Cambridge Systematics on public 
transportation needs found that approximately 19 percent of 
transit revenue vehicles have already reached their federally 
established service lives, and an additional 47 percent of the 
current bus fleet will reach that age within six years. The 
continued use of vehicles that have exceeded their recommended 
service life can be associated with less reliability, passenger 
discomfort, and higher operating and maintenance costs for 
agencies.
    The second problem facing public transportation providers 
that wish to replace their aging buses with new clean fuel 
vehicles is that clean fuel buses can be more than twice as 
expensive as traditional diesel buses. With transit ridership 
growing at a record rate, transit systems must choose between 
purchasing additional conventional diesel buses, with which 
they potentially could expand service, or purchasing a smaller 
number of clean fuel vehicles. Replacing a transit system's 
older bus fleet with new clean fuel buses like diesel-electric 
hybrids or compressed natural gas (CNG)- fueled vehicles can 
reduce an agency's fuel expenses, improve air quality and 
reduce maintenance costs, but transit systems cannot afford the 
higher upfront costs of the new technology. The cost of clean 
fuel vehicles will eventually fall as producers are able to 
increase production rates and take advantage of economies of 
scale, but those savings will be not be realized until clean 
fuel buses are more widely deployed.
    To address both of the challenges described above, APTA has 
proposed creating a new formula program to help transit 
agencies to replace vehicles in their fleets that have exceeded 
the Federal Transit Administration's (FTA) standard for 
replacement and accelerate the replacement of existing diesel 
vehicles with new, fuel efficient vehicles. Transit systems of 
all sizes with aging buses would be eligible for new federal 
funds to replace their vehicles with clean fuel vehicles.
    Under the proposed Clean Fuels Aging Bus Replacement 
Program:

      This new program should replace the existing 
``Clean Fuel Bus Program'' (49 U.S.C. 5308).

      $100,000,000 should be provided in the first year 
of program, and then grow annually at a proportion equal to the 
growth of federal transit program overall.

      Funds provided would be in addition to those made 
available for the Bus and Bus Facilities program. The program 
should be funded from amounts that would have otherwise been 
made available under the Clean Fuel Bus program and new funds 
made available under the federal transit program overall.

      Federal share for the incremental cost of 
purchasing clean fuel vehicles under this program should be 100 
percent. No local match is required for the incremental cost of 
purchasing a clean fuel vehicle.

      Funds should be apportioned by formula to 
designated recipients in urbanized areas over 200,000 and to 
states for distribution to grant recipients in urbanized areas 
less than 200,000 and rural areas.

      Funds should be apportioned to designated 
recipients and states under a formula that is based on the 
relative share of the total cost to replace vehicles within the 
urbanized area or state that exceed 125 percent of the FTA 
standard for replacement. Funds should not be made available to 
transit agencies that do not have vehicles that exceed 125 
percent of the FTA standard for replacement.

      Grant recipients would be required to purchase 
clean fuel vehicles, which include vehicles powered by:

          --Compressed natural gas;

          --Liquefied natural gas;

          --Biodiesel fuels;

          --Batteries;

          --Alcohol based fuels;

          --Hybrid electric; and

          --Fuel cells.

                                ------                                


         RESPONSE TO WRITTEN QUESTIONS OF SENATOR REED 
                       FROM ANDY DARRELL

    The emphasis of federal transit funding has focused on 
helping public transportation agencies make capital 
improvements. While transportation agencies can typically use 
bonding authority to raise the funds they need for capital 
improvements, they often have less flexibility to find new 
sources of revenue to respond to escalating operating costs. 
For example, the Rhode Island Public Transit Agency is 
dependent on a share of state gas tax revenue to meet much of 
its operating overhead. Unfortunately, that revenue stream does 
not keep pace with inflation, and as gas prices have climbed 
this year (and as more drivers have turned to public 
transportation), it has declined.

Q.1. With increases in energy and other operating costs, are we 
at a point where we should recalibrate where federal public 
transit funding is allocated by dedicating at least some 
support to operations?

A.1. The nation's transit agencies are going broke. We see 
underfunded transit from the large already transit-rich cities 
to the relatively small systems throughout America. During this 
economic crisis, it is ever more critical these systems are 
able to expand and offer transit options to Americans who are 
turning to transit like never before. In the short-term, it 
does no good for transit agencies to receive capital injections 
if they have no way of paying for their systems' operating 
costs. In order to meet this rising transit demand, Congress 
should be able to create an accountable framework by which 
short-term operating funds can be given to transit agencies who 
would otherwise be left with buses and subway cars without the 
fuel or drivers to operate them. And in the long-term, if 
funding were to be directed at enhancing measures that improve 
system efficiency, especially at fuel-efficient technologies, 
transit agencies would not only save money, but also would be 
less reliant on Congressional funding.
                                ------                                


   RESPONSE TO WRITTEN QUESTIONS OF SENATOR CARPER FROM ANDY 
                            DARRELL

Q.1.  Are there States where CMAQ (Congestion Mitigation and 
Air Quality Improvement Program) funds go unspent?

A.1. It is true that some CMAQ funds are going unspent. This is 
due to a complex set of requirements that States and local CMAQ 
fund requesters must go through to tap into this funding (see 
http://edocket.access.gpo.gov/2006/06-9679.htm). CMAQ funding 
is so difficult to obtain that only now in a time of real 
financial stress are some local jurisdictions making the effort 
to get more of the CMAQ funds from their states. Much of the 
time, local agencies do not bother because the process is so 
burdensome and receipt of funding is not assured in the 
competition for funds at the State level.
    In some States, CMAQ funds have gone largely to a few large 
highway expansion projects, such as adding HOV lanes that have 
produced dubious air quality benefits. In other states, 
officials have gamed the mismatch between the higher program 
authorization funding levels and the lower appropriations 
funding levels to significantly underspend CMAQ funds while 
overspending National Highway System and Surface Transportation 
Program funds to build new highways. Each of these cases 
represents a lost opportunity to invest CMAQ funds in mass 
transit, smart transportation management, diesel retrofits, 
pedestrian and bicycle improvements, and other clean 
transportation initiatives. The Federal Highway Administration 
shows the relative amounts of unspent CMAQ funds by state at: 
http://www.fhwa.dot.gov/environment/cmaqpgs/msgobsrec1.htm.
    One fix for this problem would be to make at least a 
portion of CMAQ funds directly available to local governments 
or metropolitan planning organizations for investments in a 
list of activities most likely to deliver air quality benefits. 
Eliminating state DOT pass-through activities, thus giving 
local air quality agencies a voice in how the funds are 
allocated, rather than just state transportation agencies, 
would also go a long way to solving this problem.
                                ------                                


   RESPONSE TO WRITTEN QUESTIONS OF SENATOR CASEY FROM ANDY 
                            DARRELL

Q.1. How do mass transit's savings of 4.2 billion gallons of 
gasoline translate to pollution reduction amounts?

A.1. Mass transit in the U.S. saves enough gasoline annually to 
prevent about 40 million tons of CO2 pollution 
(CO2 is the main global warming pollutant). That is 
the equivalent of shutting down thirteen 500 MW coal-fired 
power plants--more than the entire CO2 emissions of 
Peru or New Zealand. In addition to. greenhouse gases, reducing 
gasoline consumption through public transportation also 
improves air quality by preventing roughly 20,000 tons of smog-
forming NOx and 500,000 tons of carbon monoxide from 
being emitted.
                                ------                                


         RESPONSE TO WRITTEN QUESTIONS OF SENATOR REED 
                      FROM DOROTHY DUGGER

Q.1. The emphasis of federal transit funding has focused on 
helping public transportation agencies make capital 
improvements. While transportation agencies can typically use 
bonding authority to raise funds they need for capital 
improvement, they often have less flexibility to find new 
sources of revenue to respond to escalating operating costs. 
For example, the Rhode Island Public Transit Agency is 
dependent on a share of state gas tax revenue to meet much of 
its operating overhead. Unfortunately, that revenue does not 
keep pace with inflation, and as gas prices climb this year 
(and as more drivers have turned to public transportation), it 
has declined.
    With increases in energy and other operating costs, are we 
at a point where we should recalibrate where federal public 
transit funding is allocated by dedicating at least some 
support to operations?

A.1. From BART's point of view, recalibrating where federal 
public transit funding is allocated by dedicating at least some 
support to operations does not help meet the growing need for 
reinvestment in the nation's transit infrastructure. Instead, 
we would prefer an increase in targeted capital funds from 
federal public transit funding.
    BART has huge capital needs for which there are inadequate 
sources of funding--our operating budget is primarily assisted 
by an imbedded local tax income approved by voters and a 
relatively high fare box recovery when compared with other 
transit systems.
    For our rail system--which includes subway, elevated 
structures, stations and significant underwater components--
BART is in agreement with the recent Federal Transit 
Administration (FTA) report ``The State of Good Repair'' which 
concludes that capital funds be targeted toward renovation and 
rehabilitation to meet the increasing rider demand.
    BART's declining capital funding and limited bonding 
authority does not assist this growing need. Being additionally 
constrained by the regional planning approach of our 
Metropolitan Planning Organization, whose funding formula 
method does not respond to a variety of critical capital needs, 
it is our view that federal public transit funding for capital 
projects should not be recalibrated to support local transit 
operational expenses.
                                ------                                


         RESPONSE TO WRITTEN QUESTIONS OF SENATOR REED 
                       FROM KEITH PARKER

Q.1. The emphasis of federal transit funding has focused on 
helping public transportation agencies make capital 
improvements. While transportation agencies can typically use 
bonding authority to raise the funds they need for capital 
improvements, they often have less flexibility to find new 
sources of revenue to respond to escalating operating costs. 
For example, the Rhode Island Public Transit Agency is 
dependent on a share of state gas tax revenue to meet much of 
its operating overhead. Unfortunately, that revenue stream does 
not keep pace with inflation, and as gas prices have climbed 
this year (and as more drivers have turned to public 
transportation), it has declined.
    With increases in energy and other operating costs, are we 
at a point where we should recalibrate where federal public 
transit funding is allocated by dedicating at least some 
support to operations?

A.1. Yes, increases in energy and operating costs together with 
increases in ridership place transit agencies in urgent need of 
federal operating assistance and other accounting amendments in 
support of growing transit operations.
    In FY2008, ridership on the Charlotte Area Transit System 
(CATS) was 17.4% higher than the prior year and 12% higher than 
projections. The rising cost of fuel attracted non-riders to 
try transit; while CATS safety, customer service and 
cleanliness has allowed the agency to retain almost 100% of 
these new riders. In order to accommodate new ridership on both 
the bus and new light rail system, CATS maximized the use of 
its resources to meet demand. This caused a gap in available 
operating income which CATS had to cover by utilizing a portion 
of funds identified for CATS capital program. Additionally, 
CATS reallocated a further portion of its capital funding 
toward the (unbudgeted) purchase of additional rail cars to 
accommodate the 86% (over Federal formula projections) increase 
in daily ridership. Overall, this has had a serious impact on 
CATS' capital program and year-end fund balance.
    CATS operating costs are funded primarily by a one half 
percent Sales & Use Tax, operating assistance from the North 
Carolina Department of Transportation (NCDOT), farebox and 
other miscellaneous revenue. The two key sources of revenue, 
i.e., Sales Tax and State operating assistance are both subject 
to fluctuations of consumer discretionary spending and gas tax 
revenue received by NCDOT. In the current economic climate, 
both sources are trending toward a minimum 6%-8% reduction. 
Despite budget reduction actions (including a freeze on 
hiring), CATS may be forced to reduce service, which impacts 
the most transit-dependent riders.
    As more drivers turn to public transportation and local 
sources of transit revenue are significantly reduced, it is 
imperative that transit agencies receive federal operating 
assistance.
    Three areas that would assist transit agencies with rising 
operating costs are:


          1.  The introduction of a formal, annual Federal 
        operating assistance program.
          2.  Amendments in General Accounting Standards to 
        allow for capitalization of transit maintenance costs
          3.  Amendments in the eligibility criteria for use of 
        CMAQ funds in order that these funds might be used for 
        operating costs with no time-period or other 
        restrictions.

    We further suggest that Federal operating assistance be 
distributed by formula, with special incentives for agencies 
that implement initiatives that positively impact a clean air 
environment and who demonstrate increases in ridership.
                                ------                                


         RESPONSE TO WRITTEN QUESTIONS OF SENATOR REED 
                        FROM DAVE KILMER

Q.1. The emphasis of federal transit funding has focused on 
helping public transportation agencies make capital 
improvements. While transportation agencies can typically use 
bonding authority to raise the funds they need for capital 
improvements, they often have less flexibility to find new 
sources of revenue to respond to escalating operating costs. 
For example, the Rhode Island Public Transit Agency is 
dependent on a share of state gas tax revenue to meet much of 
its operating overhead. Unfortunately, that revenue stream does 
not keep pace with inflation, and as gas prices have climbed 
this year (and as more drivers have turned to public 
transportation), it has declined.
    With increases in energy and other operating costs, are we 
at a point where we should recalibrate where federal public 
transit funding is allocated by dedicating at least some 
support to operations?

A.1. The cost of fuel like other expense items are generally 
out of the control of transit systems and often result in fare 
increases and/or service reductions. This is particularly a 
hardship for small systems that do not receive operating 
assistance and have limited preventive maintenance expenses. 
Had it not been for passage of the Technical Corrections Bill 
to SAFTEA-LU, our system would have been forced to reduce 
service in addition to the 10.4% fare increase that was 
implemented on July 1, 2008. As one of the leaders of the 100 
Bus Coalition, the use of federal funds for operating 
assistance has been our primary focus as small transit systems 
in urbanized areas over 200,000 in population and operate less 
than 100 peak buses are too small to fully utilize preventive 
maintenance to make up for the loss of traditional operating 
assistance. With record fuel prices and ridership on public 
transit, reducing public transit service is not the answer to 
achieving energy independence. It has been proven that public 
transit can make a difference in reducing dependence on foreign 
oil, reducing congestion, improving air quality, and integral 
to the future economic development across the country, 
including creating and sustaining jobs.
    Even with the high level of state support in Pennsylvania 
for public transit, the high costs of fuel and health care 
alone have diminished the ability to expand services or even 
maintain existing levels of service. Providing flexibility for 
the use of federal funds will allow the local communities to 
decide how to best use these funds. While providing for capital 
funds is extremely important in the federal program, 
particularly for replacing buses, systems our size will have 
the money to replace buses, but not the funds to operate the 
service, if the federal policies do not change. Without some 
level of federal operating assistance, the resulting reductions 
in services and increases in fares will only result in the loss 
of jobs as those that can least afford to lose their 
transportation will be the hardest hit, including the elderly 
and disabled.
    There must continue to be a partnership of federal, state, 
and local governments for the continued funding of public 
transit to reach the goal of lessening dependence on foreign 
oil.
                                ------                                


   RESPONSE TO WRITTEN QUESTIONS OF SENATOR TESTER FROM DAVE 
                             KILMER

Q.1. You addressed the need to find additional sources of 
revenue such as selling advertising on the side of buses. While 
larger urban areas may be able to take advantage of even more 
innovative and lucrative private sector funding opportunities, 
what are the options for such additional funding streams in 
rural areas of the country like much of Montana?

A.1. The selling of advertising on the side of vehicles is a 
very common practice for all transit systems, large or small 
depending on the policies of each transit authority. Other 
options also include the selling of advertising on the side of 
bus shelters and advertising on printed bus schedules or 
booklets. We have also been successful with leasing space on 
our radio tower for cellular companies. However, these revenue 
sources only generate roughly 1% of our operating budget, but 
every source of additional revenue is important for lessoning 
the dependence on taxpayers to operate the service.
                                ------                                


         RESPONSE TO WRITTEN QUESTIONS OF SENATOR REED 
                      FROM ROBERT PUENTES

Q.1. The emphasis of federal transit funding has focused on 
helping public transportation agencies make capital 
improvements. While transportation agencies can typically use 
bonding authority to raise the funds they need for capital 
improvements, they often have less flexibility to find new 
sources of revenue to respond to escalating operating costs. 
For example, the Rhode Island Public Transit Agency is 
dependent on a share of state gas tax revenue to meet much of 
its operating overhead. Unfortunately, that revenue stream does 
not keep pace with inflation, and as gas prices have climbed 
this year (and as more drivers have turned to public 
transportation), it has declined.
    With increases in energy and other operating costs, are we 
at a point where we should recalibrate where federal public 
transit funding is allocated by dedicating at least some 
support to operations?

A.1. Transportation policy and program governance currently 
favors particular modes but is indifferent to substantive 
outcomes. This is an inefficient and unrealistic approach. The 
term ``modality neutrality'' should redefine how transportation 
is perceived and should reinforce that it is a tool to advance 
broader national goals. In other words, examining particular 
policy areas through the broad lens of the policy outcomes 
(e.g. economy, environment, equity) rather than that of a 
particular mode (e.g., highway, transit, bike/pedestrian, air). 
Without a doubt specific and different modes are critical to 
delivery, but that should not be the starting point.
    In order to empower metropolitan entities to make good 
decisions about transportation investments, various 
transportation options must be compared holistically, equally, 
and consistently based on their merits. Metropolitan 
decisionmakers should be able to choose the best set or 
combination of transportation strategies that meet their views, 
values, and directions. Thus metropolitan leaders should be 
able to pursue the best transportation alternatives for their 
communities, not the alternative that is simply the easiest to 
get funded or approved. Several reforms are needed.
    For one, the federal government should require equal 
treatment of proposed highway and transit projects. There is 
simply no reason why new roadway projects using federal funds 
should not face the same level of scrutiny as new rail 
projects. Second, the federal agencies should evaluate and rate 
candidate all new capacity projects (including highways) 
similar to what it does now for new transit projects. It should 
create a single review process for all new capacity (roads and 
rails) and bring back the major investment study requirement 
for corridor planning. Similarly, long-range financial 
requirements for highway projects should be disclosed at 
program level, as they now are for transit projects. What makes 
sense for a transit project surely also make sense for a 
roadway project. The financial package should be part of a 
benefit/cost analysis for all new capacity projects so the 
federal government can determine which will have return value 
for the money. Lastly, the existing highway trust fund should 
be converted into a unified Transportation Trust Fund by doing 
away with the separate highway and transit accounts. The 
federal government also must take steps to address the 
disparities in the federal match ratios between highways and 
transit. Simply put, the disparity between the 50 to 60 percent 
federal match for transit and the 80 to 90 percent match for 
highways is far too dramatic to ensure proper metropolitan and 
local decisions.
                                ------                                


  RESPONSE TO WRITTEN QUESTIONS OF SENATOR TESTER FROM ROBERT 
                            PUENTES

Q.1. You stated that the federal transportation dollars are 
allocated through archaic funding and distributional formulas. 
And that those formulas reward consumption instead of 
conservation. Can you elaborate on that point? How can federal 
funding formulas better reflect an effort to conserve and 
reduce energy consumption? Also, how would these changes 
address rural needs?

A.1. The formulas for allocating federal highway trust fund 
dollars are largely made on the basis of highway mileage and 
use. More than half of the funds authorized in SAFETEA-LU are 
appointed to states based on the traditional factors: amount of 
roads, miles driven, and fuel consumed and/or gas tax paid. 
Less than one-fifth comes from other measures of need such as 
number of deficient bridges, roadway fatalities, or population 
in air quality non-attainment areas.
    While this may seem intuitive on some level, it also 
presents obvious problems in that it rewards those places with 
road expansions and high gas consumption. There is no reward 
for reducing consumption in any of these formulas. In fact, any 
investment in transit or promotion of land use to reduce fuel 
consumption or substitute for lane miles may result in fewer 
federal dollars.
    One method to reorient the funding formulas is to reward 
the achievement of national priority goals such as GHG and oil 
consumption reduction. This way federal funds are not 
distributed based on factors that potentially increase 
greenhouse gas emissions, overly simplistic equity provisions, 
or on the basis of earmarking. Serious consideration should be 
given as to whether VMT and gasoline consumption make sense at 
all as a basis for apportionments. By the same token, bonus 
allocations should be considered for those states and 
metropolitan areas that reduce their VMT and gasoline 
consumption through demand management techniques and 
strategies.
    These changes would address rural needs because a 
purposeful and responsive federal transportation program would 
take into consideration the specific needs, opportunities, and 
challenges of different parts of the country. Channeling 
transportation and infrastructure funds toward older 
communities means that greater attention will now be paid to 
sprucing up and reinvigorating fading rural villages, main 
streets, and small-town business districts. Establishing a 
national vision for economic competitiveness will also involve 
crafting a vision for rural competitiveness. For example, 
better tailoring of transportation initiatives to local and 
regional needs should allow rural areas to prosper in more 
distinctive niches--whether in tourism, freight movement, or 
higher-value agriculture--instead of pursuing the one-size-
fits-all solution. Planning better will allow rural areas to 
better protect the integrity of all of their communities as 
well as their signature open spaces.
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