Soaring Transit Subsidies Must Be Controlled

CED-81-28: Published: Feb 26, 1981. Publicly Released: Feb 26, 1981.

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The demand for mass transit subsidies is approaching crisis proportions. A study was performed to determine why the demand for transit operating subsidies is growing, what can be done to control subsidy growth, and what improvements are needed in the federal transit operating assistance program.

One reason for growing subsidy demands is that rising transit operating costs are not being offset by productivity improvements. Although labor accounts for 70 to 80 percent of operating costs, transit systems have difficulty in using labor efficiently because demand peaks during commuter rush hours. Transit systems are experiencing serious problems in maintaining their bus and railcar fleets. Many systems: (1) are not properly recruiting, training, and promoting their mechanics; (2) do not have adequate preventive maintenance programs; (3) are not properly controlling spare parts inventories; and (4) have restrictive work rules preventing the efficent use of maintenance personnel. The demand for operating subsidies is also growing because transit systems have adopted and maintained unrealistically low fares, even though operating costs are increasing.

Matters for Congressional Consideration

  1. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Matter: Congress should reconsider the 1974 legislative finding that the continued increase in fares is undesirable and adopt a goal for the section 5 program that promotes efficient and equitable transit pricing.

  2. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Matter: Congress should amend the Urban Mass Transportation Assistance Act of 1964 to give governors the authority to reallocate section 5 surpluses from urbanized areas with populations between 50,000 and 200,000 to other larger urbanized areas within the state that need the funds.

Recommendations for Executive Action

  1. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: The Secretary of Transportation should direct the Urban Mass Transit Authority (UMTA) Administrator to develop and undertake specific actions to improve transit productivity.

    Agency Affected: Department of Transportation

  2. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: The Secretary of Transportation should require the appropriate organizations, in their transportation plans, to: (1) establish local goals for the proportion of short and long term costs that fare revenue should cover; and (2) assess the efficiency and equity of present fares and examine alternative fare structures that might better reflect equity and cost.

    Agency Affected: Department of Transportation

  3. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: The Secretary of Transportation should require the UMTA Administrator to issue a fare-policy statement indicating that UMTA desires local areas to give greater consideration to passenger fares as a revenue source and to developing efficient and equitable fare policies.

    Agency Affected: Department of Transportation

  4. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: The Secretary of Transportation should require the UMTA Administrator to: (1) require that annual governors' reports be submitted before the governor allocates the apportionments; and (2) provide guidance to regional offices on their responsibilities for monitoring the allocation and use of apportionments by state governors to ensure that such resources are being used efficiently.

    Agency Affected: Department of Transportation

  5. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: The Secretary of Labor should review the typing workload associated with certifying operating grant application requests subject to the model agreement and either (1) obtain additional typing help or (2) seek alternatives to formal typing such as using form letters with handwritten inserts and notifying UMTA informally after Labor decides to certify a grant rather than waiting for a formal certification letter to be typed.

    Agency Affected: Department of Labor

  6. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: The Secretary of Transportation should direct the UMTA Administrator to give priority to determining the amount of apportionments available to urbanized areas and state governors and ensuring that these apportionments are properly accounted for.

    Agency Affected: Department of Transportation

  7. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: The Secretary of Transportation should direct the UMTA Administrator to improve headquarters oversight and supervision of regional office section 5 activities by: (1) ensuring that adequate program guidance is issued to UMTA regions for all section 5 and related responsibilities; (2) establishing time standards for processing section 5 operating grant applications and obtaining the data needed to monitor regional office adherence to these standards; and (3) providing formal training in administrative procedures for regional staff responsible for section 5 program activities.

    Agency Affected: Department of Transportation

  8. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: The Secretary of Transportation should direct the UMTA Administrator to give top priority to determining the agency's needs for automated information systems, initiating appropriate action to fulfill these needs, and ensuring that the agency efficiently uses existing automated information systems.

    Agency Affected: Department of Transportation

  9. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: The Secretary of Transportation should direct the UMTA Administrator to ensure that section 5 grants are promptly closed out and the remaining grant balances are deobligated and either lapsed or reapportioned. The existing backlog of projects eligible for closeout should be processed as quickly as possible to avoid having funds remain idle and lapse unnecessarily.

    Agency Affected: Department of Transportation

  10. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: The Secretary of Transportation should direct the UMTA Administrator to develop and issue policy guidelines defining the UMTA role and responsibilities in encouraging transit productivity.

    Agency Affected: Department of Transportation

 

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