Coronavirus

Last Week, the Public Transit Industry Asked for $12.8 Billion in Emergency Funding. The Senate GOP Relief Bill Gives Transit $20 Billion. House Dems Want $25 Billion.

The public transit bailout is spiraling out of control.

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The cost of the federal government's bailout of America's public transit agencies continues to grow, with some members of Congress proposing to give the industry twice the amount of taxpayer aid it was requesting just one week ago.

Last Tuesday, the American Public Transportation Association (APTA) urged Congress to support a $12.8 billion emergency aid package for transit agencies suffering increased costs and cratering revenue during the COVID-19 pandemic. On Thursday, APTA raised its demand to $16 billion, to make up for $14 billion in lost revenue plus $2 billion in increased operating costs.

"It cannot be overstated—without these funds, the overwhelming majority of public transit agencies will be required to either drastically curtail services or suspend services altogether. The time to act is now," said APTA President Paul Skoutelas in a press release.

On Friday, Reps. Chuy Garcia (D–Ill.) and Gwen Moore (D–Wis.) sent a letter co-signed by 52 other House Democrats to House and Senate leadership requesting $16 billion be included in any COVID-19 relief package. By Sunday, when Senate Majority Leader Mitch McConnell (R–Ky.) released a draft version of the Coronavirus Aid, Relief, and Economic Security Act (CARES) Act, it budgeted $20 billion in emergency relief for public transportation. The language of the bill strongly encourages, but does not require, that transit agencies spend this money on COVID-19-related expenses.

The bill would distribute this money through existing formula grant programs, giving $16 billion to urban transit agencies plus another $4 billion to rural ones. For comparison's sake: The federal grant programs that the CARES Act would funnel money through were budgeted for $6.2 billion in Fiscal Year 2020. The entire Federal Transit Administration's fiscal year 2019 budget was $13 billion.

Even McConnell's amount of money was not enough for House Speaker Nancy Pelosi (D–Calif.). A draft of the speaker's relief package budgets $25 billion in emergency grants for transit agencies.

Marc Scribner, a transportation expert at the Competitive Enterprise Institute, says that any emergency funding Congress does provide to transit needs to be targeted at the immediate problems caused by the current pandemic.

"Right now, we are experiencing a short-term cash flow problem, and then we are facing near-term solvency problems. Any policy that is not tailored to those two aspects of this crisis should be immediately taken off the table," he tells Reason.

Transit agencies are seeing huge revenue losses as ridership on some systems declines as much as 85 percent. That puts a major dent in the money these agencies are collecting from fares. On top of that, the closure of bars, restaurants, and other businesses means that transit-dedicated sales taxes are pulling in much less revenue.

In that environment, it may make sense for the federal government to provide short-term aid so that cities' transit systems can keep servicing riders who need it. But with so many industries asking for aid, any unnecessary spending takes resources away from other immediate needs.

How much of these funds are truly necessary to get the public transportation sector through the crisis? That remains to be seen, but the rapidly escalating cost of the transit bailout suggests at least some opportunism is at play.

Even if every dollar goes to covering COVID-19 related cost increases or revenue losses, there's still a question of how long federal taxpayers should be expected to make agencies whole, Scribner notes.

Even before the current rash of business closures and social distancing measures put the industry into crisis mode, transit ridership was already falling as a share of trips taken. That preexisting decline could be exacerbated by more people continuing to work from home, even after this current crisis abates.

"How many years," Scribner asks, "are we planning on bailing out a transit industry that may never recover?"

NEXT: Two Reasons the Worst-Case Scenarios for COVID-19 Seem Unrealistic

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  1. Pardon me, I thought we were in some kind of isolation mode, self-quarantine, lock-down … which means fewer people commuting and shopping and less need for transit. Yet we’re going to pay airlines to fly empty planes and transit agencies to run empty buses and trains.

    Strange how that works.

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  2. Every passing day brings more dread for the future.

    1. My personal contribution to the GDP has actually increased lately.

  3. “plus $2 billion in increased operating costs.” ????

    They are shut down. No riders – no operating costs.
    Here is the silver lining of the hysteria; just use the bill to eliminate all mass transit. For ‘the duration’ of the epidemic, allow Uber & Lyft back on the streets. Then let them continue with a federal
    designation of contractors. I am not aware of any mass transit that goes from where you are to where you want to be.
    If you have to drink the public money, attach transit vouchers to other assistance programs. Allow companies to fund transit like gym memberships, tuition, and insurance.

    1. If they were smart now would be when they would be getting as much maintenance done as possible. Given that these are union gigs, that’s unlikely.

  4. there’s still a question of how long federal taxpayers should be expected what it even means to make agencies whole

    FTFY

    1. Well, that phrase signifies the change from half-ass agency to full asshole agency.

  5. “Never let a good crisis go to waste.”

    I saw another article on HuffPost talking about how this was a great time to give airlines some cash but make them promise to address global warming (whatever that might entail). I find it appalling to use a global crisis to advance an unrelated agenda.

    1. The Ds are trying to sneak the Freen New Deal into this stimulus since they figure 5 Rs being out with Wuhan flu gives them the upper hand

  6. Have these idiots ever heard of the concept of opportunity cost? Every dollar spent bailing out some company or extending someone’s unemployment benefits is a dollar that cannot be spent buying test kits or other badly needed medical supplies. How can anyone support this with a clean conscience?

  7. Please send Nancy a case of Corona.

  8. Until we stop subsidizing the parasitic backwaters and stop enabling churches to freeload on the backs of other taxpayers, whining from clingers and anti-government cranks about transit funding should be disregarded by mainstream and accomplished America.

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  11. Nuts!

    Public transit wants a big reward for spreading C-19 – see the NYC epicenter. The socialists and the nationalists answer by fighting over who will give it even more.

    This bug may be a permanent fixture; and if not it, then the next worse one will be. We need to use this pandemic as a way to learn to spread apart and stay healthy not pack in to disease tubes and cans, like public transit; and to use the savings from closing these and similar people packing and disease spreading public entities that are now public health danger zones to allow private innovators the capital to meet the challenges of a new less densely packed and healthier mode of economic and social activity.

  12. Fuck it, just give them ALL the moneys!

  13. Throwing more billions at public transportation makes it more expensive without making it more useful.

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