#70

400 Transportation:Eliminate the New Starts Transit Program

Savings in Millions of Dollars
  • 2016
    1972
  • 2017
    1979
  • 2018
    1983
  • 2019
    2006
  • 2020
    2053
  • 2021
    2099
  • 2022
    2144
  • 2023
    2202
  • 2024
    2245
  • 2025
    2286
  • 2016-2020
    9993
  • 2016-2025
    20969

Sources

Savings are expressed as budget authority and were calculated by using the FY 2014 enacted spending levels as found on page 1,002 of “Appendix, Budget of the United States Government, Fiscal Year 2015,” March 2014. The FY 2014 enacted spending was increased at the same rate as discretionary spending for 2016–2025, according to the CBO’s most recent August 2014 baseline spending projections.

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Technical Notes on Scoring

CBO Baseline

Unless otherwise noted, calculations for savings for each recommendation relies on the most recent Congressional Budget Office baseline, as found in “An Update to the Budget and Economic Outlook: 2014 to 2024,” published August 27, 2014, has been used.

Savings “Totals”

While totals for the five and 10 year savings are provided by section and for the complete set of recommendations, there are two reasons they should not be viewed as representing total savings for The Budget Book.

First, as noted in the introduction, The Heritage Foundation would recommend that the savings realized in the Function 050 Defense section would stay within the Department of Defense to strengthen the nation’s defense capabilities.

Second, the numbers cannot be deemed to represent the realized savings if every single recommendation were adopted because policy changes made in one program can impact spending levels in other programs.  Thus, the numbers in the table do not reflect any potential interactions between the various policy changes affecting spending or savings.

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Heritage Recommendation:

Eliminate the New Starts Transit Program. This proposal saves $2.0 billion in 2016, and $21.0 billion over 10 years.

Rationale:

Let’s bring transportation policy back to the local level & save $21 billion.

The New Starts program was created in 1991 as part of the Intermodal Surface Transportation Efficiency Act, with the purpose of giving transit agencies grants for building transit projects. In fact, it gives them the incentives to build costly transit systems they can ill afford to operate, much less fund for capital improvements.

Criteria for eligible projects includes “congestion relief,” “environmental benefits,” and “economic development effects,” but it no longer includes “operating efficiencies,” as the research of the Cato Institute’s Randal O’Toole shows.1 In some cases, such as when a streetcar receives a New Starts grant, the project will increase traffic congestion by blocking a lane and slowing down cars using the road. Streetcars also can duplicate existing bus routes; the H Street Streetcar recently constructed in Washington, D.C., is an example. Another D.C. example—the Silver Metro Line addition to the Washington Metropolitan Area Transit Authority’s rail system—refutes the economic development effects claim. In this case, the Reston and Tysons areas were booming commercially years before the rail line was built and began operating.

As opposed to distributing New Starts funds via formulas to the states, as highway funding is deployed, Congress chose to set up New Starts as a competitive grant program to which transit agencies apply for available funds. Transit agencies, therefore, have the incentive to pursue overly expensive transit projects and expand their bus, transit, or streetcar service even without sufficient demand for more service. Further, this program can become nothing more than one that funds earmarks selected at the discretion of the executive branch, much as the Obama Administration has used New Starts to advance its “smart growth” (read: anti-driver) agenda.

Congress should terminate the New Starts program immediately, and reduce future authorizations for transit by the amount that would otherwise have gone to New Starts. Such a reform should also be a part of ending the federal transit program and allowing the states and private sector to manage and fund transit systems where they value them and can afford them. Local, not federal, taxpayers, as well as a transit system’s users that benefit from the service, should fund urban transit systems.

Endnotes

  1. Randal O’Toole, “Paint Is Cheaper than Rails; Why Congress Should Abolish New Starts,” Cato Institute Policy Analysis No. 727, 
June 19, 2013, (accessed December 12, 2014). 

Let’s bring transportation policy back to the local level & save $21 billion.

Contributing Expert

Emily Goff advances conservative solutions to transportation and infrastructure challenges as policy analyst in the Thomas A. Roe Institute for Economic Policy Studies at The Heritage Foundation.

See publications by Emily Goff

Emily GoffPolicy Analyst, Transportation and Infrastructure

Heritage Expert

Diane Katz, who has analyzed and written on public policy issues for more than two decades, is a research fellow in regulatory policy at The Heritage Foundation.

See publications by Diane Katz

Diane KatzResearch Fellow in Regulatory Policy

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