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LaHood Reaches Out to Transit Industry, Lamenting ‘Lousy Economy’

Transportation Secretary Ray LaHood sought to commiserate with the
cash-strapped transit industry today, declaring the Obama administration
an ally of local rail and bus agencies even as the "lousy economy"
clouds prospects for passage of a new long-term federal transportation

Secretary Ray LaHood (Photo: Getty

In an address to the American Public
Transportation Association's (APTA) annual conference, LaHood
highlighted the $787 billion stimulus law's contribution to transit and
high-speed rail and extended a hand to local officials who have been
forced to pursue service cuts and fare increases.

"If we didn't have a lousy economy, a lot of these issues would
bubble up more quickly," LaHood told transit planners who lamented the lack
of progress
on new federal legislation and the tough
budget choices
brought on by the recession.

"Part of the solution," LaHood added, "will be when the economy
comes back" and the White House is more open to discussing tax increases
as part of the financing mix for long-term transport funding.

But in the meantime, LaHood's remarks served as a friendly warning
to the transit industry that, given the capital's current political
reality, its $8.4
billion haul
from the stimulus should be considered a victory.

One exchange in particular epitomized the state of play between the
administration and transit agencies: When an APTA conference attendee
from Grand Rapids, Michigan, asked the packed audience of local
officials to raise their hands if they had raised fares or cut service
during the past year, a sizable number of hands rose into the air.
Minutes later, Federal Transit Administrator Peter Rogoff leapt up to
ask how many officials would be cutting more or laying off more workers
if not for the stimulus.

Even more hands went up in response to Rogoff's query.

"The big sticking point of all of this is money," LaHood said.
"That money [to pay for a new federal bill] just doesn't exist right

Despite that grim news and the long line of transit planners who
shared their fiscal woes with LaHood during a question-and-answer
session, one opening emerged for the industry to make headway on its
Washington agenda. The U.S. DOT chief signaled openness to expanding
urban transit agencies' ability
to use
federal capital grants to cover operating costs.

That capital-to-operating flexibility now sits at 10
, a level set soon after the stimulus law's passage. "Maybe
that's not the right percentage," LaHood said. "Maybe we need to work
with Congress to allow you to do more when the economy is bad." He
floated the idea of a "sliding scale" for federal operating aid that
would vary based on economic growth.

On two other big-ticket federal transit issues, however, the
federal outlook appeared hazy following LaHood's appearance.

Asked about the so-called "CLEAN
TEA" plan
to give transit a dedicated share of the revenue from
climate change legislation, LaHood touted his work in the president's
Green Cabinet before admitting, "I can't say [CLEAN TEA] has been part
of our discussions. But it possibly could be in the future."

Another questioner brought up the stimulus
law's provision
increasing the monthly pre-tax transit benefit for
commuters to $230 -- equalizing the tax-free funding for transit and
parking -- which is set to expire at the end of 2010. LaHood replied
that he had not the "slightest idea" of the issue's status, though
Rogoff explained that the tax question is under the Treasury
Department's purview.

"We intend to talk to our partners at Treasury" about the value of
keeping the pre-tax transit benefit equal to that for employee parking,
Rogoff said.

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