New Transportation Approach Will Boost Transit and Focus on
Metropolitan Area Congestion

“It is time for a funding system that encourages, instead of discourages, mobility in our urban areas,
including greater transit use.”
-U.S. Secretary of Transportation Mary E. Peters

Secretary Peters announced a new framework to overhaul the way U.S. transportation decisions and investments are made.  As part of that new framework, she outlined a number of measures that are designed to give communities greater freedom and more resources to finance new transit projects like subways, street cars and express bus services.  These measures include:

Eliminating arbitrary federal restrictions on effective transit investments.

• Today, states and localities are generally limited in how they can fund transit, even if a transit investment makes more economic sense than a highway investment.   
• The Metropolitan Mobility program is a mode neutral program that allocates resources to projects that make the most sense, instead of pet projects that politicians want. 

Encouraging congestion pricing, a proven approach to increasing transit use and raising funds to finance new transit services. 

• Federal gas taxes do little to manage congestion or encourage commuters to try transit.
• The plan proposes to eliminate all Federal restrictions on congestion pricing in metropolitan areas and allow localities to reinvest revenues generated from pricing on transit. 
• Greater use of congestion pricing provides natural incentives for drivers to try transit during congested periods while giving communities new, more reliable ways to finance important transit projects.
• The plan also creates a discretionary Metropolitan Innovation Fund that will award funds to cities that effectively combine peak period highway pricing, expanded transit options and technology into a single mobility strategy.

Leveling the playing field between transit and highway investments.

• Today, only transit projects seeking New Starts funding must pass a cost effectiveness test before becoming eligible for federal funding.
• The plan requires all surface transportation projects to complete a cost benefit analysis. 

Making it easier and quicker to get transit projects off the drawing board.    

• Federal process requirements can bog down transit investment opportunities for years, often making them too expensive to complete. 
• Under the plan, new approaches would be established on a pilot basis to help shorten process requirements, while focusing on performance and outcomes. 

Making it easier to finance transit projects.

• Today, most transit projects are funded by either federal or state tax revenue.
• The plan expands the way communities can finance transportation projects through state infrastructure banks, private activity bonds and expanded federal credit flexibility.

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