"Livability Money" soon to hit the streets?

All of a sudden, the offices at Dept of Transportation (DOT), Dept of Housing and Urban Development (HUD), and the Environmental Protection Agency (EPA) - the three members of the federal Partnership for Sustainable Communities - have started announcing funding opportunities and other initiatives in support of the federal agenda to support more livable communities.

If you'd like to read some details that seek to decode this latest flurry of activity, check out The Express Stop blog of my NRC staff colleague, Sheryl Gross-Glaser. She's got the answers. And if you're looking for money, act fast! There's a 30-day window for getting mandatory pre-applications submitted, and the clock is ticking. Interested applicants might want to dial in to a June 30 webinar on the topic hosted by our colleagues at PolicyLink.

As if the funds aren't exciting enough, the Federal Highway Administration and HUD just announced contracting flexibility (determined on case-by-case bases) to improve jointly-financed projects, effective right away, all in support of the federal government's livability principles, which are turning out to be a critical set of guideposts for all sorts of federal decision-making these days.

Looking for more information on this livability stuff? Check out the Livability Bookshelf on our National Resource Center website.
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On TANF & Transportation

A product of the 1996 "welfare reform," the Temporary Assistance for Needy Families (TANF) program has been around for more than a decade. Transportation plays a key role in this program's success, and TANF is an important financial partner in public transportation, too. Given the current state of states' budgets, and the current state of the national economy, with persistent high rates of unemployment, it's important to give TANF a fresh look.

First a bit of the basics. TANF has an annual appropriation of $16.5 billion, not including a significant expansion under the American Recovery and Reinvestment Act (ARRA). In the federal budget, TANF is mandatory spending, similar to Medicaid, Medicare, Food Stamps, and other so-called "entitlement" programs. The federal agency administering TANF is the Administration for Children and Families (ACF) within the Dept of Health and Human Services. According to ACF data, states currently are spending $400 million a year in their federal TANF funds on transportation, which they match with $44 million in state “maintenance-of-effort” funds for transportation services. ARRA created a one-time "TANF Emergency Fund" of $5 billion, which expires September 30, 2010.

When the 1996 Personal Responsibility and Work Opportunity Reconciliation Act eliminated the previous Aid to Families with Dependent Children (AFDC) program and replaced it with TANF, responsibility for establishing program rules, services and details were left largely in the hands of states. States receive TANF as a block grant, with allocations based primarily on their 1994 levels of AFDC spending. These amounts don't change, even when states' economies plummet and unemployment (and thus the degree of TANF demand) rises.

States often call their TANF programs by unique, state-specific, names, and set most of their own procedures for how TANF-related services are provided. States are not required to spend any of their TANF funds on transportation. But almost every state does, in some way or another, because the lack of transportation continues to be documented as one of the leading barriers to employment participation, especially among otherwise-unemployed single mothers (not surprisingly, the lack of child care continues to be the other leading barrier to employment participation among this segment of the "at-risk" population). States can provide transportation as part of the direct "assistance" they provide to TANF recipients (typically using vouchers, transit passes or related strategies), in which case TANF funds tend to follow the individual, are tracked closely for eligibility, and have to comply with the time limits and other person-specific requirements of TANF. This practice is especially prevalent at times like our current economy, when TANF-eligible populations are more numerous and demands on TANF resources are peaking. States also have the opportunity to provide TANF-related transportation as "non-assistance," meaning that they are helping to finance transportation networks that serve the needs of the TANF-eligible population, but not in ways that are directly delivered as benefits to individuals. For example, in the late 1990s, many states were using their TANF funds to match Federal Transit Administration "Job Access and Reverse Commute" grants to provide systems of transportation services addressing all low-income populations, not just the populations receiving direct TANF assistance.

The FTA/DOL Joblinks Employment Transportation Initiative, operated by the Community Transportation Association of America, has focused a lot of energy on TANF and created a host of TANF-related documents over its 12 years (and counting) of operation. This post is not meant to recap or replace that wealth of literature, but simply aims to point out a few reminders about TANF and transit programs.

The first reminder, as stated above, is that states have an abundance of flexibility and autonomy to create TANF-funded services in ways that suit their circumstances.

Second, TANF is one of the very few non-DOT grant programs for which federal agencies created guidance directing the relationship between TANF and FTA grants. Although it predates the current SAFETEA-LU authorization, there is a joint guidance document, officially issued by the Federal Transit Administration, the Employment and Training Administration (ETA), and the Administration for Children and Families, that explains, from each of these agencies' perspectives, how their funds - JARC, TANF, and the old Welfare-to-Work grants - can be used together. At the headquarters level, the staff of FTA, ETA and ACF all have said this guidance remains in force. It can be found on the FTA website at http://www.fta.dot.gov/funding/grants/grants_financing_3715.html

Third, SAFETEA-LU makes statutory references to TANF in its authorization for ALL of the Federal Transit Administration's formula grant programs:

Urban transit....
49 USC 5307(e)(4):

"Use of certain funds. - The prohibitions on the use of funds
for matching requirements under section 403(a)(5)(C)(vii) of
the Social Security Act (42 U.S.C. 603(a)(5)(C)(vii)) shall
not apply to the remainder [ie, the non-FTA share of project costs]"

Elderly/Disabilities transit....
49 USC 5310(c)(3):

"Use of certain funds. - For purposes of paragraph (2)(B)
[defining the non-FTA share of project costs], the prohibitions
on the use of funds for matching requirements under section
403(a)(5)(C)(vii) of the Social Security Act (42 U.S.C.
603(a)(5)(C)(vii)) shall not apply to Federal or State
funds to be used for transportation purposes."

Rural transit....
49 USC 5311(g)(4):

"Use of certain funds. - For purposes of paragraph (3)(B)
[defining the non-FTA share of project costs], the prohibitions
on the use of funds for matching requirements under section
403(a)(5)(C)(vii) of the Social Security Act (42 U.S.C.
603(a)(5)(C)(vii)) shall not apply to Federal or State
funds to be used for transportation purposes."

Job Access and Reverse Commute.....
49 USC 5316(h)(4):

"Use of certain funds. - For purposes of paragraph (3)(B)
[defining the non-FTA share of project costs], the prohibitions
on the use of funds for matching requirements under section
403(a)(5)(C)(vii) of the Social Security Act (42 U.S.C.
603(a)(5)(C)(vii)) shall not apply to Federal or State
funds to be used for transportation purposes."

New Freedom....
49 USC 5317(g)(4):

"Use of certain funds. - For purposes of paragraph (3)(B)
[defining the non-FTA share of project costs], the prohibitions
on the use of funds for matching requirements under section
403(a)(5)(C)(vii) of the Social Security Act (42 U.S.C.
603(a)(5)(C)(vii)) shall not apply to Federal or State
funds to be used for transportation purposes."

The above language was inserted in each of those portions of authorizing legislation specifically because Congress did not want there to be an impediment in the use of TANF funds (which is the reference to Section 403 of the Social Security Act) with regard to coordination with FTA funds. This is notable, in that it is the only statutory requirement of "coordination" that imposes a requirement on non-DOT programs; the language specifically addresses TANF as a partner in all FTA grants.
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Public Health & Transportation: There's a Connection

[Third in my occasional series of postings about how health reform legislation is changing the landscape for coordinated public and human services transportation.]

Title IV of the Patient Protection and Affordable Care Act (PPACA) addresses public health and disease prevention. Although the legislation's expansion of Medicaid will have a larger dollar impact on transit services, this is the one section of the "health reform" legislation that specifies a role for the U.S. Dept. of Transportation in helping the federal government create a healthier America.

The Secretary of Transportation already has gone on record as a champion of his department’s role in helping promote healthier communities. He has said so in many speeches, in his “FastLane” blog (take particular note of his posts on May 11, April 20 and April 6, 2010) and in other venues. He is a champion of this cause, but he is not alone in seeing that transportation investments and partnerships can do much to help achieve healthy outcomes in terms of physical fitness, obesity prevention, access to preventive health services, health improvements resulting from better access to fresh and nutritious food, and decreased incidence of chronic health conditions as a result of transportation-related environmental improvements in our air, soil and water.

Drawing on decades of research results from the Centers for Disease Control and Prevention (CDC) and other agencies, Title IV of PPACA addresses strategies to create healthier communities and improve public health outcomes.

The Secretary of Transportation is named to a 12-member council, chaired by the Surgeon General, that is to provide coordination and leadership to support prevention, wellness and health promotion and to help create and support the infrastructure that results in a healthier America. On June 10, 2010, Pres. Obama signed an executive order that officially brought this National Prevention, Health Promotion and Public Health Council into existence.

This council is charged with creating a National Prevention and Health Promotion Strategy, along with other reports and recommendations for improving the overall health status of Americans and their public health.


Prevention & Health: Putting Money on the Table

Reports and strategies, such as those to be pursued by this council, are important, but policy and federal investment are at least as important. Under PPACA, there is a $15 billion program of mandatory spending to provide a national investment in prevention, wellness and health promotion.

This prevention and wellness program is expected to build on a $640 million “Communities Putting Prevention to Work” program established under the American Recovery and Reinvestment Act (ARRA, or the "stimulus bill"). In that program, numerous projects have been launched by states and community-based organizations in efforts to increase physical activity, improve nutrition, decrease rates of childhood and adult obesity, and decrease smoking prevalence. As one illustration of this, the “active living” program established at Section 4201 of PPACA repeatedly cites “infrastructure improvements” as eligible uses of its appropriated funds, and the statute clearly includes transportation among that infrastructure.

Studies published by the Centers for Disease Control and Prevention (CDC) and others have shown that investments in public transportation correlate with positive health outcomes, and directly relate to this program’s goals of increased physical activity, reduced obesity, and improved access to nutrition. Under the ARRA program, administered by CDC, numerous projects that support active living and community design have been launched, including the inclusion of health outcomes in the transportation planning processes undertaken statewide in North Carolina and Rhode Island, to name but two examples.

This facet of emphasis on wellness and community health promotion is new under PPACA. It is an opportunity for the Department of Transportation to work with its partners to show that transportation activities, ranging from support of bicycle and pedestrian projects, to the support of enhanced public transit services, to the multidisciplinary planning and delivery of services envisioned under the DOT-HUD-EPA Partnership for Sustainable Communities, all play central roles in promoting and supporting a healthy America.

The Dept. of Transportation has acknowledged its role in this dimension of PPACA and health outcomes in its draft Strategic Plan. While many of the programmatic results from that plan are awaiting legislative authorizations, the DOT and its partners in the Coordinating Council on Access and Mobility (most of whom also are members of the newly established National Prevention, Health Promotion and Public Health Council) should begin discussing and coordinating likely federal strategies that promote transportation’s role in disease prevention and health promotion. This opportunity must not be wasted as a channel through which DOT, its federal partners and its non-governmental partners are able to promote outreach efforts, community partnerships, federally funded innovation, and other steps that produce demonstrable improvements in public health and nutrition access and outcomes.
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Same Goal, Different Approaches?

For starters, writing about introduced legislation is a dubious prospect, since the vast majority of bills that are introduced in Congress go absolutely nowhere. However, the Washington Post had an article in its June 11 edition about transit operating assistance, which is too important an issue not to discuss.

As the Community Transportation Association, the Amalgamated Transit Union, Transportation for America, and others have repeatedly observed, public transit systems across the country are suffering for a lack of operating revenues, since all their traditional sources of non-federal funds - state/local fuel taxes, local property taxes, state income taxes, state/local sales taxes - are at very low levels, with no real signs of recovery on the near horizon.

Through rallies and other actions, members of Congress have become aware of the transit pain that so many communities are experiencing. Two divergent legislative paths have emerged:

Congressman Russ Carnahan (D-Mo.) introduced a bill, H.R. 2746, which would allow Section 5307 federal transit grants to urbanized areas with more than 200,000 population be able to use some of these funds to help cover their operating costs (under current law, these "large-urban" areas' Section 5307 funds can only be used for capital assistance, with a few narrow exceptions). To date, this legislation has picked up 131 co-sponsors in the House; at a time when almost everything in the House of Representatives splits along party lines, it should be noted that there are 7 Republican co-sponsors of Rep. Carnahan's bill. In the Senate, very similar legislation (S. 3189) was introduced by Sen. Sherrod Brown (D-Ohio).

The other legislative strategy is found in legislation introduced last month in the Senate (S. 3412) by Chris Dodd (D-Conn.) and in the House (H.R. 5418) by Mike McMahon (D-N.Y.). The Dodd-McMahon legislation would authorize a one-time supplemental appropriation of $2.0 billion, which would be distributed using existing formulas to all Section 5307 and Section 5311 grantees.

The problem these bills would address is very real, and very current, as the reports on transit service cuts and fare increases continue to stream in, and as cities' transit agencies continue to struggle with balancing their budgets in the current economy. So far, no hearings or other Congressional action on either the Carnahan-Brown or Dodd-McMahon bills has taken place or been scheduled, nor does any substantive action appear to be likely in the near future. Nonetheless, transit interests from New York to Los Angeles, to everyplace in between, have been joining DOT Secretary Ray LaHood and FTA Administrator Peter Rogoff in saying that something needs to be done to help transit in urban America.
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FMAP - the most important four letters in Medicaid

[This is second in my occasional series of postings about how health reform legislation is changing the landscape for coordinated public and human services transportation.]

In the Medicaid realm, arguably the most important concept is the Federal Medical Assistance Percentage, or FMAP. This number represents the portion of eligible costs that the federal government will reimburse to states under Medicaid for the medical services they provide. Every state gets a unique FMAP, recalculated annually, that is based on each state's per capita income relative to the nation's average per capita income. In essence, the lower a state's per capita income, the higher its FMAP. Under Medicaid law, no state can have an FMAP below 50 percent, nor higher than 83 percent. However, states' FMAP rates all were boosted by approximately 6 to 9 percentage points (the amounts varied by formula and other factors) as part of the American Recovery and Reinvestment Act (ARRA). There also is an "enhanced FMAP" rate calculated for each state under an administrative formula; this rate primarily is used to determine federal payments to states for the Children's Health Insurance Program (CHIP).

The fact that every state has a different FMAP, and that every state's FMAP is subject to change every year, can be one of the challenging factors when trying to link states' Medicaid activities with public transportation or other Medicaid-related services. Under the just-enacted health reforms, different aspects of Medicaid-covered services and programs can have different FMAP rates, which could become an even greater challenge, although the generally increased federal funding should make these partnerships and programs possible.

The Assistant Secretary for Planning and Evaluation (ASPE) within the US Dept of Health and Human Services determines FMAP rates each year, which are published in the Federal Register, posted on the ASPE website, and are available in other places, as well.

For states, FMAP rates are huge concern. As the National Association of State Budget Officers, National Governors Association, and National Conference of State Legislatures report every year, Medicaid is one of the top three expense items in every state's budget (the other two are corrections and education). Of these, Medicaid is unique in that the federal government establishes the eligible population to be served and the scope of medical assistance to be provided to this population, and then leaves it up to each state to cover as much as 50 percent of costs, regardless of the state's ability to generate the needed funds.

Therefore, when the Patient Protection and Affordable Care Act (PPACA, or "health reform") became law, numerous FMAP provisions were made as an effort to soften the blow to states' budgets. Two of these instances have a direct bearing on transportation:

1. The mandatory expansion of Medicaid to all persons at or below 133 percent of poverty is financed at an FMAP of 100 percent in 2014 (when that requirement takes effect), scaling down to 90 percent federal share by 2020.
2. Elsewhere in PPACA, every state can use specified higher FMAP rates when providing certain home- and community-based long-term care services for persons with disabilities.

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On Extenders and Expirations

Public and community transit systems may have to get by with $500 million less in operating revenue next year.

The "tax extenders" bill (see the May 20 Capitol Clips posting for relevant details) continues to be a moving target for a number of tax and spending issues affecting public and community transportation. As passed by the House on the eve of its Memorial Day recess, the latest version of this bill no longer contains the continuation of increased federal Medicaid spending that was part of the American Recovery and Reinvestment Act (ARRA, or the "stimulus bill"). The bill's COBRA extension also was removed before the final vote, but most other provisions - including the TANF emergency fund extension - remained in place.

So, at this point in time - unless some action takes place otherwise - two key elements for transportation under ARRA are expiring on December 31, 2010:

1. Federal spending under Medicaid, increased to every state under ARRA, will revert to pre-ARRA Medicaid matching rates. This represents a loss of $24 billion in otherwise-anticipated Medicaid funding to states, just at a time when they are trying to ramp up for Medicaid expansion under the Patient Protection and Affordable Care Act (PPACA, or the "health reform bill")

2. The amount of income that employees can use, tax-free, for transit and vanpools is scheduled to drop from $230 a month to somewhere in the vicinity of $120 per month. Under ARRA, the tax-free transit benefit has been boosted to parity with the amount allowed as a tax-free parking benefit, but that ARRA provision expires December 31, 2010, and there has not yet been any legislation introduced that would continue this level. At the ARRA levels, $560 million a year is being pumped into public transit systems' coffers as a result of this tax-free benefit; Internal Revenue Service and Congressional estimates all indicate that transit receipts through this benefit are likely to fall by more than half next year, unless there is a change in statute.

Given historical data on Medicaid spending through public transit, these two items alone suggest that the nation's public and community transit services are being slated for a revenue loss of more than $500 million in calendar year 2011.
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