400 Transportation:Eliminate the New Starts Transit Program

Rationale:

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. ((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).)) 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.