Transit Fund Talks Heating Up

March 16, 2008
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GRAND RAPIDS — After holding 12 hearings and listening to testimony from countless government agencies, transit advocates, transit operators and private citizens, Michigan’s Public Transit Subcommittee has come to a conclusion: Transit’s time has come.

In a report published Monday, the subcommittee called for the legislature and administration to get together and get going on an effort to craft a statewide policy that would improve the availability of state matching funds for public transit improvements and expansions.

“Transit is popular with the public: We must seize the moment or be left behind forever in job creation, tourism, economic development and support of strong cities,” the subcommittee wrote in its report. “Transit enjoys bipartisan support from both inside and outside the government, in the private and public sectors, to one degree or another. Common ground must be established so improvements can begin.”  

Testimony given before the subcommittee reiterated what transit studies have shown time and again: Efficient and modern public transportation creates jobs, fuels economic development, provides an exceptional return on investment, reduces dependence on foreign oil, enhances access to jobs, saves money, reduces air pollution, decreases traffic congestion and provides individuals with mobility and transportation options, the report pointed out. On top of everything else, the demand for public transit has never been greater, the subcommittee pointed out.

But just like so many other things, this one boils down — in large part — to money. 

One of the most common barriers to transit system improvements is the state’s Comprehensive Transportation Fund formula, according to the transit subcommittee, because the way it works is, the more money one transit system receives, the less there is for others. The subcommittee suggested that the state develop a funding system that holds small agencies harmless while allowing larger agencies to invest and grow, and also cautioned the state against using CTF funds to help balance the state budget. The legislature has already diverted dollars from the CTF for other purposes.

For each $1 in state funds, the Federal Transportation Administration provides a $4 match, but Michigan has not been able to appropriate enough money to match those available federal dollars, leaving millions worth of federal money on the table.

“The federal government measures state support for transit before they approve funds for transit projects,” the subcommittee noted in its report. “Michigan has not shown the necessary commitment; therefore Michigan’s ability to appropriate federal funds is hindered.”

There is a convergence in this state of compelling arguments for transit support, said Andy Guy, a journalist for the Michigan Land Use Institute.

“We are starting to understand that mass transit is a critical piece of infrastructure that we need to attract new workers and companies to help evolve our economy,” Guy told a group of public officials, lawmakers, citizens and transit advocates who gathered at LaGrave Christian Reformed Church Monday to discuss transit issues. 

Guy said a lot of developers and investors are taking a new interest in Division Avenue as they learn more about the bus rapid transit project that the Federal Transit Administration has authorized The Rapid to develop along the nine-mile Division Avenue corridor. The BRT line will run along Division from 60th Street north to Wealthy Street, up to Michigan Street through downtown and into Central Station.

“Developers and investors are having conversations about where the BRT station stops are going to be, the number of people those stops might attract, and thinking about how their developments can complement the transit that’s going to come down that corridor,” Guy said.

But in order to secure the construction agreement needed to begin the BRT project, The Rapid has to obtain a funding commitment from the state for a 20 percent match of the capital cost of the project, estimated at $40.14 million. The state would need to provide a match of $8.02 million in increments over a four-year period.

“If we put in this new dedicated route down Division, then people are going to want to be very close to Division so they can access the customers that will utilize that system,” said Rep. Tom Pearce, R-Rockford. “If we build it, more customers will come. It’s a moving target that can grow greater and greater.”

Although lawmakers at the meeting expressed wholehearted support for public transit, they couldn’t necessarily offer an immediate solution to the funding issue. Lawmakers present were asked whether they supported a state match of 20 percent for the BRT project and if so, what they would be willing to do to secure the needed $8 million in capital funds. 

“I certainly support a state-provided match, but I think we have to look at it in the context of the budget situation we have right now,” said Senator Bill Hardiman, R-Grand Rapids. “The governor is recommending a $1.7 million reduction in the CTF fund, and last year there was a $5 million reduction. As chair of that committee, I tried to put that back in. I will continue to advocate for that.”

Pearce said he supports a state match, as well, but said a state match isn’t necessarily the only answer.

“I think we could use some local involvement in it (raising funds). We don’t have to have the total match all in one year; we can raise it over three years,” Pearce said, referring to the anticipated BRT funding schedule, which would began in fiscal 2009 and end in fiscal 2012.

“It’s a great deal for the state of Michigan when we can make a small investment of 20 percent and reap so much more in return,” said Rep. Dave Hildenbrand, R-Lowell. “It’s a cumbersome appropriations process, but I think you can see the support among legislators in this region.”

Asked whether they would be willing to raise the gas tax specifically to fund transit improvements, all three lawmakers responded: “No.” Hardiman said this would be a horrible time for the state to increase the gas tax,” given the pain people are already enduring at the pump. All three legislators underscored the need to protect CTF funds from being siphoned off for other projects.

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