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2015: THE YEAR AHEAD

State of the Public Transportation Industry 2015

BY MICHAEL P. MELANIPHY, APTA President & CEO

APTA President & CEO Michael Melaniphy shared his outlook for the state of the public transportation industry in 2015 at an event at the APTA offices on Jan. 21. Below are excerpts of his remarks.

I am happy to be talking this evening about an industry that has always been an integral part of our overall transportation network. APTA is excited about the opportunity to be working with our coalition partners as we look to grow investment in our surface transportation system through bipartisan support and good policy.

Our transportation network is one system and tonight I will share with you the important role public transit plays in that system. Let’s take a look at where we are and where we are going in 2015. First, I’ll address the current demand and support for public transportation. Second, the trends impacting our industry. Third, upcoming major projects that will help address the demand for more public transportation. Fourth, I will offer our assessment on the prospect of securing a long-term surface transportation authorization bill.

Demand and Support
Let’s start with the current demand and support for public transportation. The packed buses and trains we see all around the country tell the story. Our members provided 54 million more trips in the third quarter of 2014 than during the same period in 2013—that’s even as gas prices decreased. That is noteworthy given that more than 10.7 billion trips were taken on public transit in 2013—the highest number since 1956.

And support for public transportation goes beyond ridership. During the last election, we saw tremendous support for our industry. Public transit initiatives prevailed at the ballot box at a rate of 69 percent. This support is part of a long-term trend. Since 2000, more than 72 percent of public transit ballot measures have passed.

In 2014, 42 out of 61 pro-transit measures passed. Funding was approved everywhere from large urban areas in California to small communities in Georgia to agricultural centers in Kansas and industrial states like Michigan.

APTA recently conducted a scientific poll of more than 1,000 voters who participated in the last general Election Day on Nov. 4. We found that 66 percent of them favor increasing funding for public transportation to expand and improve services in their communities. Public transit users and non-users alike are supporting our industry because they see firsthand how public transportation transforms their communities.

People are seeing real-life examples of the community-building impact of investing in public transportation infrastructure. For instance, when you think of ­Dallas, it is seems unlikely you’d see a lot of public transpor­tation, yet Dallas has the longest light rail system in the country today.

Another great success story is in Arizona. In 2000, the cities of Phoenix, Mesa and Tempe leveraged federal funding and flexed highway funding and invested $1.4 billion in a 20-mile light rail line that connects the three cities. Today, that investment is yielding big dividends and boasts more than $7 billion in economic activity.

Businesses thrive, property becomes more attractive and tax revenues increase. And opportunities become almost limitless. “Where Public Transportation Goes, Community Grows” is more than our industry’s tagline; it is a reality. Clearly Americans are voting with their feet by using public transit and voting with their wallets by supporting greater investments in their local public transit systems.

Transit Trends
When we look at the trends that are impacting our industry, it is clear that the economic data suggests that more robust investment in public transportation is truly an effective way to grow our local communities and make our nation more economically competitive.

For the first time, we are able to quantify “the better”—or how public transit makes our cities and our nation more productive. According to the APTA study “Economic Impact of Public Transportation Investment,” investment in public transit powers significant productivity gains and leads to approximately 50,700 jobs per $1 billion of investment. More than 28,900 of those jobs are attributed to the productivity gains enjoyed by the households and businesses in our community.

Another important trend impacting our industry is the public’s demand for multimodal transportation. The millennial generation is leading this trend with 70 percent preferring to live in a community that features multimodal transportation options that include public transportation. Because of this generation, transportation systems—and particularly public transit systems—will be built around the smartphone in the future.

We are beginning to see and anticipate adoption of features such as smartphone charging stations on vehicles and facilities; fare collection via smartphone; Wi-Fi, 4G and 3G access; apps that connect public transit access to local amenities; seamless multimodal connections such as bike and car share options and improved pedestrian access to public transit stations.

Major Projects
Let’s take a look at some of the expected major public transit projects that are in the pipeline through 2015 and beyond.
Currently, there are 14 Bus Rapid Transit systems. This year, eight new projects are anticipated. These projects will be built in Chicago, Scottsdale, Salt Lake City, Hartford and Orlando. There are also two BRT projects planned for the north and southeast corridor of Jacksonville, Florida.

Today there are 24 light rail systems. In 2015, six additional light rail line extensions are in the pipeline. Two will be in Houston, two in Los Angeles, one in Sacramento and one in Portland.

In addition to light rail, we are seeing a streetcar renaissance. As we broaden our transportation portfolio, it is important that we recalibrate our expectations of the true effectiveness and benefits of the streetcar.

A streetcar system creates a sense of permanency and a sense of community. It creates the cornerstone of a thriving area where we see amenities that attract developers and people from all walks of life. It’s about creating a sense of place as much as it is about moving people from A to B.

Today, there are 13 streetcar systems. We are likely to see the expansion of streetcars as they are launched in Kansas City, Charlotte, Seattle, Washington, DC, and Dallas this year.

Rounding out the anticipated new projects for 2015 are two heavy rail extensions in San Francisco and New York City and a commuter rail extension in Boston.

All of these projects will have a transformative impact on the communities they serve. According to the National Association of Realtors and APTA, ­during the greatest economic recession in our lifetime, residential property values performed 42 percent better on average when they were located near public transportation with high-frequency service.

While residential property values declined substantially between 2006 and 2011, properties located within a quarter mile of public transit showed significantly stronger resiliency. This is indeed progress, but we still have significant capital needs in our state of good repair and it is critical that we make sure our systems are operating safely and effectively.

Funding
We will not be able to continue to progress and provide mobility options to help grow our communities if we do not secure a long-term surface transportation authorization bill.

According to the AASHTO and APTA “Bottom Line” report, the current dedicated funding in the transportation trust fund falls far short of helping to close the $88 billion deficit just to bring existing public transportation facilities up to a state of good repair.

Our infrastructure is aging and deteriorating. The lack of a long-term bill has led to incredible uncertainty for public transit systems and businesses alike as they try to plan, build, maintain and repair our nation’s infrastructure. Significant uncertainty is certainly a challenge as we move forward. And the impact of this uncertainty stretches beyond the borders of this nation.

As we migrate to a capital construction model that encourages public-private partnerships involving a variety of investors, we must remember that we are competing on a global stage for their dollars.

With an uncertain long-term commitment and a patchwork of state-level enabling legislation for public-private partnerships, the risk quotient here in the U.S. is much higher than in countries like Canada and Australia when it comes to P3 implementation. These countries embrace ­public-private partnership models at the national level because they have the certainty of funding on the federal level and a national standard that makes P3s easier to implement.

The fact is there are many reasons why we need legislation that provides for long-term funding. How do we turn up the volume on this message?

Under the leadership of APTA’s chair, Phillip Washington, general manager and chief executive officer of the Regional Transportation District in Denver, we have designated a national day of advocacy called “Stand Up for Transportation.”

On April 9, we are asking every public transit system and every public transit business in the nation to take the lead with their local transportation partners in a common purpose and with one message. It’s time for Congress to act in the best interests of our country to build, repair and strengthen our transportation infrastructure, and to grow our communities—and our nation. You will hear more about this event in the coming months, and we hope you will participate.

May 31st—when MAP-21 expires—is only 130 days away. APTA and its members have worked tirelessly alongside many of you for a long-term bill. But the fact is, all we’ve been given is extension after extension. But the political will to take action on a long-term solution could be moving in our favor. Even the concept of an increase in the gas tax is still on the table, depending on the day and the hour.

Some suggest that getting a divided government to work together in passing a long-term bill is too steep of a mountain to climb. It is interesting to take a quick look back in history at the different combinations of presidential administrations and Congresses that actually got something done when it came down to increasing revenue for a long-term bill.

In April 1983, we had a Republican president—Ronald ­Reagan—and a majority Democratic House and a majority Republican Senate. They nonetheless managed to increase the federal gas tax from 4 to 9 cents. Reagan touted it as “a nickel for America.” Four cents went to roads and highways and 1 cent went to public transportation.

In December 1991, Republican President George H.W. Bush worked with a Democratic majority in both chambers and yet they managed to increase the federal gas tax from 9 to 14.1 cents.

And when the most recent gas tax increase was passed—in September 1993—we had a Democratic president—Bill Clinton—and a Democratic majority in both houses. The tax was raised from 14.1 cents to 18.4 cents.

However, during Clinton’s second term, both houses of Congress were Republican. Remember this was in the time frame of the “Republican Revolution” and the “Contract for America.” While initially all of the increases to the gas tax went to deficit reduction, Clinton and a Republican House and Senate worked to eventually deposit the increase into the Highway Trust Fund in October 1995 and the balance was deposited later in 1997.

So, I believe—no, I predict—that even with today’s divided government we will get a long-term bill to fund ­public transportation in America.

The Obama administration has put forth the “Grow America Act.” While we may not agree with all of it, it is a proposal that helps advance the dialogue and keep transportation front and center. We are also encouraged by those in Congress with proposals to increase investment in our transportation infrastructure and to keep all funding options on the table.

Our industry stands ready. We have the capacity to build streetcars, commuter trains, buses, transit centers and multimodal facilities. We have the leadership in both our public sector public transit members and our private sector business members and the strong support of the taxpaying public.

As practitioners of transportation policy, it is our responsibility to advocate for increased funding to meet the needs of our nation. Let’s not abdicate to the status quo. At the end of the day, good enough is just not good enough!

I look forward to a productive, exciting and successful year ahead—for our members and for our industry.

To watch a brief video highlighting Melaniphy’s State of the Industry remarks, click here.

APTA President & CEO Michael Melaniphy reported on the state of U.S. public transportation at a Jan. 21 event in the APTA offices in Washington, DC. The map shows the states that had public transit-related ballot measures in 2014. Photo by Mitchell Wood

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