Many of the community-based programs that partner with Federal Transit Administration (FTA) grantees to provide coordinated transportation services use small (by transit standards) vehicles, often purchased "off-the-lot" from dealers. Quite a few of the minivans, vans, and other small transit vehicles are produced, at least in part, in Canada, Mexico, or overseas. When FTA funds are involved, it becomes important to assure compliance with FTA's specific and unique "Buy America" requirements. Indeed, a few communities have turned to non-FTA sources, such as the HUD Community Development Block Grant program, for vehicle purchases at least in part because the process of assuring Buy America compliance becomes a challenging obstacle.
This week, FTA Administrator Peter Rogoff put into writing a statement of principles that had been in force ever since states and transit agencies began purchasing vehicles with "stimulus" funds from the American Recovery and Reinvestment Act, but which FTA applies to all vehicle acquisitions involving FTA grant funds, regardless of programs.
In this February 16, 2011, "Dear Colleague" letter, Mr Rogoff explicitly states, "FTA will not consider any requests for a public interest waiver of FTA’s Buy America regulation." In this same letter, he goes on to say "FTA has raised the bar for all Buy America waiver requests. All requests will be scrutinized. Most requests will result in FTA offering technical assistance to develop a solution that will not necessitate a waiver. Please be cautious about leading your projects down a path where a Buy America waiver will be needed, as it is unlikely to be granted."
Given the tenor of this letter, anyone concerned with the Buy America provisions that apply to capital purchases involving FTA funding should pay close attention to the regulations and related information at FTA's "Buy America" web page.
Thursday, February 17, 2011
Monday, February 14, 2011
President Obama Sends FY 2012 Budget Request to Congress
Even when submitted on Valentine's Day, the annual budget request from the White House is far from a fait accompli. However, these documents, chock-full of details and ideas, do help shape the basis by which the annual appropriations process begins to unfold. That said, there are many interesting ideas wrapped up in this latest budget request, and it will be even more interesting to see which of these gain traction in the halls of Congress.
Since the budget documents (which all are posted on-line at the Office of Management and Budget's website) are about annual spending, here's a quick rundown of what is being discussed that may be of greatest relevance to the federal investment in public transit and its most closely linked medical, workforce and social services programs.
Federal Transit formula grants
President Obama and Transportation Secretary Ray LaHood are requesting total spending for the Federal Transit Administration (FTA) of $22.4 billion in FY 2012. This is more than double the funds appropriated to FTA in FY 2010 and 2011. Within the formula-based transit grant programs, the FTA budget request would increase "Section 5307" urban transit grants to $6.2 billion and "Section 5311" rural transit grants to $766 million. Although the details would have to be contained within a SAFETEA-LU reauthorization, the Administration's budget request calls for consolidating the current "Section 5310" funding for elderly and disabled persons' transit, "New Freedom" funding t, and "Job Access and Reverse Commute" (JARC) funding under a $405 million "Consolidated Specialized Transportation" grant program. In addition, there is a DOT-wide initiative requested under this budget proposal for $50 billion of "Up-Front Investments," of which at least $3 billion is sought for additional funding of urban and rural transit projects at a 100 percent federal share, plus $7.5 billion for 100 percent federally funded fixed-guideway modernization projects, and $1.0 billion for "New Starts," above those covered in the existing Section 5309 program. Another notable feature is the Administration's request that there be a mechanism by which urban transit funding in areas experiencing unemployment above a certain threshold would be able to be used to cover a portion of those grantees' operating costs.
Medicaid
Federal payments for Medicaid are a form of mandatory spending that is outside the annual appropriations process. In the budget request, it is estimated that federal spending on Medicaid will be $270.7 billion in FY 2012.
Temporary Assistance for Needy Families
Federal payments to states for Temporary Assistance for Needy Families (TANF) are a form of mandatory spending that is outside the annual appropriations process. TANF spending is fixed by law at $16.4 billion per year.
Workforce Investment Act programs
Employment and training grants under the Workforce Investment Act (WIA), along with funding for closely related federal job training programs, are slated for a reduction of approximately 12 percent, to $3.5 billion under the President's budget request. The bulk of that funding would continue to be directed to workforce development activities for dislocated workers ($1.3 billion), youth ($965 million) and job-seeking adults ($792 million).
Older Americans Act programs
The portion of Older Americans Act funding that is directed to supportive services and senior centers, which historically has been a significant partner to many urban and rural transit arrangements, is slated for a 13 percent increase under the President's budget request, to a level of $468 million. Elsewhere in the Administration's request is an interesting note, that President Obama is seeking to shift management of the Senior Community Service Employment Program away from the Department of Labor and into the Administration on Aging.
Community Development Block Grants
The Department of Housing and Urban Development's Community Development Block Grant program would receive a 20 percent cut under the President's budget request, to $3.7 billion.
Community Services Block Grants
Making good on a commitment he made in his most recent State of the Union speech, President Obama is requesting a 50 percent reduction in funding for Community Services Block Grant activities, to $350 million.
Vocational Rehabilitation
Grants from the Department of Education to state vocational rehabilitation agencies are slated for very slight growth, to $3.1 billion in FY 2012 under the President's budget request.
Qualified Transportation Fringe Benefits and Other Tax Credits
Although tax expenditures are not a part of the annual appropriations process, the President's budget documents are the one place where the estimated values of these "tax breaks" all are noted in one place, typically without much analysis or commentary. As anyone who follows these items can suspect, the leading tax expenditures continue to be the tax deductions for employer-provided health care (estimated at $173.8 billion in FY 2011) and itemized deductions for mortgage interest on personal residences (estimated at $88.7 billion in FY 2011). Of greater interest to public transportation and its partners are the impacts of the Qualified Transportation Fringe Benefit for transit and vanpooling (estimated at $510 million in FY 2011) and, for a much smaller segment of the population, the claimed value of the Work Opportunity Tax Credit (estimated at $1.0 billion in FY 2011). Under the American Recovery and Reinvestment Act, some transportation projects were able to be financed with Build America Bonds; although that program has since terminated, the tax expenses associated with current Build America Bonds are estimated at $2.6 billion in FY 2011. Credits claimed for activities financed through New Markets Tax Credits are estimated at $800 million in FY 2011.
Since the budget documents (which all are posted on-line at the Office of Management and Budget's website) are about annual spending, here's a quick rundown of what is being discussed that may be of greatest relevance to the federal investment in public transit and its most closely linked medical, workforce and social services programs.
Federal Transit formula grants
President Obama and Transportation Secretary Ray LaHood are requesting total spending for the Federal Transit Administration (FTA) of $22.4 billion in FY 2012. This is more than double the funds appropriated to FTA in FY 2010 and 2011. Within the formula-based transit grant programs, the FTA budget request would increase "Section 5307" urban transit grants to $6.2 billion and "Section 5311" rural transit grants to $766 million. Although the details would have to be contained within a SAFETEA-LU reauthorization, the Administration's budget request calls for consolidating the current "Section 5310" funding for elderly and disabled persons' transit, "New Freedom" funding t, and "Job Access and Reverse Commute" (JARC) funding under a $405 million "Consolidated Specialized Transportation" grant program. In addition, there is a DOT-wide initiative requested under this budget proposal for $50 billion of "Up-Front Investments," of which at least $3 billion is sought for additional funding of urban and rural transit projects at a 100 percent federal share, plus $7.5 billion for 100 percent federally funded fixed-guideway modernization projects, and $1.0 billion for "New Starts," above those covered in the existing Section 5309 program. Another notable feature is the Administration's request that there be a mechanism by which urban transit funding in areas experiencing unemployment above a certain threshold would be able to be used to cover a portion of those grantees' operating costs.
Medicaid
Federal payments for Medicaid are a form of mandatory spending that is outside the annual appropriations process. In the budget request, it is estimated that federal spending on Medicaid will be $270.7 billion in FY 2012.
Temporary Assistance for Needy Families
Federal payments to states for Temporary Assistance for Needy Families (TANF) are a form of mandatory spending that is outside the annual appropriations process. TANF spending is fixed by law at $16.4 billion per year.
Workforce Investment Act programs
Employment and training grants under the Workforce Investment Act (WIA), along with funding for closely related federal job training programs, are slated for a reduction of approximately 12 percent, to $3.5 billion under the President's budget request. The bulk of that funding would continue to be directed to workforce development activities for dislocated workers ($1.3 billion), youth ($965 million) and job-seeking adults ($792 million).
Older Americans Act programs
The portion of Older Americans Act funding that is directed to supportive services and senior centers, which historically has been a significant partner to many urban and rural transit arrangements, is slated for a 13 percent increase under the President's budget request, to a level of $468 million. Elsewhere in the Administration's request is an interesting note, that President Obama is seeking to shift management of the Senior Community Service Employment Program away from the Department of Labor and into the Administration on Aging.
Community Development Block Grants
The Department of Housing and Urban Development's Community Development Block Grant program would receive a 20 percent cut under the President's budget request, to $3.7 billion.
Community Services Block Grants
Making good on a commitment he made in his most recent State of the Union speech, President Obama is requesting a 50 percent reduction in funding for Community Services Block Grant activities, to $350 million.
Vocational Rehabilitation
Grants from the Department of Education to state vocational rehabilitation agencies are slated for very slight growth, to $3.1 billion in FY 2012 under the President's budget request.
Qualified Transportation Fringe Benefits and Other Tax Credits
Although tax expenditures are not a part of the annual appropriations process, the President's budget documents are the one place where the estimated values of these "tax breaks" all are noted in one place, typically without much analysis or commentary. As anyone who follows these items can suspect, the leading tax expenditures continue to be the tax deductions for employer-provided health care (estimated at $173.8 billion in FY 2011) and itemized deductions for mortgage interest on personal residences (estimated at $88.7 billion in FY 2011). Of greater interest to public transportation and its partners are the impacts of the Qualified Transportation Fringe Benefit for transit and vanpooling (estimated at $510 million in FY 2011) and, for a much smaller segment of the population, the claimed value of the Work Opportunity Tax Credit (estimated at $1.0 billion in FY 2011). Under the American Recovery and Reinvestment Act, some transportation projects were able to be financed with Build America Bonds; although that program has since terminated, the tax expenses associated with current Build America Bonds are estimated at $2.6 billion in FY 2011. Credits claimed for activities financed through New Markets Tax Credits are estimated at $800 million in FY 2011.
Wednesday, February 9, 2011
Transit Money Made Available
In this climate of SAFETEA-LU extensions and short-term continuing resolutions, the Federal Transit Adminsitration (FTA) is rather constrained in its ability to allocate transit funds to states and communities. Every so often, the statutory window opens, and some funds are made available.
On February 8, 2011, FTA published a notice allocating formula-based transit funds for the first 5/12 of the current federal fiscal year. This notice provides partial apportionments and allocations for: statewide and metropolitan transit planning (Sections 5303 and 5304), urbanized area transit grants (Section 5307), fixed-guideway modernization (an element of Section 5309), elderly persons and individuals with disabilities transit capital (Section 5310), rural transit grants (Section 5311), job access and reverse commute grants (Section 5316), and new freedom transit grants (Section 5317).
For details, see the notice on FTA's website at http://www.fta.dot.gov/funding/apportionments/grants_financing_12353.html. NOTE: although this notice was "officially" published in the February 8, 2011, Federal Register, that notice contains formatting errors that arose during the Federal Register publishing process; please rely on FTA's website, and not the as-published Federal Register, for the most accurate information (besides, the FTA page will include any updates and additional allocations as those become available).
On February 8, 2011, FTA published a notice allocating formula-based transit funds for the first 5/12 of the current federal fiscal year. This notice provides partial apportionments and allocations for: statewide and metropolitan transit planning (Sections 5303 and 5304), urbanized area transit grants (Section 5307), fixed-guideway modernization (an element of Section 5309), elderly persons and individuals with disabilities transit capital (Section 5310), rural transit grants (Section 5311), job access and reverse commute grants (Section 5316), and new freedom transit grants (Section 5317).
For details, see the notice on FTA's website at http://www.fta.dot.gov/funding/apportionments/grants_financing_12353.html. NOTE: although this notice was "officially" published in the February 8, 2011, Federal Register, that notice contains formatting errors that arose during the Federal Register publishing process; please rely on FTA's website, and not the as-published Federal Register, for the most accurate information (besides, the FTA page will include any updates and additional allocations as those become available).
Monday, December 27, 2010
CDL-Holding Drivers: Don't Use Handheld Devices While Driving
Drivers who are required under federal law to hold Commercial Drivers Licenses (CDLs) would be prohibited from using cellphones or similar handheld devices for conversation or texting while driving, under a rule proposed last week by the Federal Motor Carrier Safety Administration (FMCSA).
There is a lot of literature and data to support the need to prevent "distracted driving," of which cell phone/texting use is a critical risk. The proposed rule would not place new restrictions on two-way or citizen-band radios. However, since many community transportation organizations are using cell-phone based technologies for their core communication functions, study and comment on this proposed rule is well-advised.
The proposed rule was issued in the December 21, 2010, Federal Register. Comments are due to FMCSA by February 22, 2011.
There is a lot of literature and data to support the need to prevent "distracted driving," of which cell phone/texting use is a critical risk. The proposed rule would not place new restrictions on two-way or citizen-band radios. However, since many community transportation organizations are using cell-phone based technologies for their core communication functions, study and comment on this proposed rule is well-advised.
The proposed rule was issued in the December 21, 2010, Federal Register. Comments are due to FMCSA by February 22, 2011.
Friday, December 17, 2010
Transit Benefit "Parity" Will Continue for one more year
Today or tomorrow, Pres Obama is expected to sign an $858 billion package of tax cuts and extensions into law. While some provisions of this legislation, such as the extension of unemployment benefits, and a temporary rollback of payroll taxes for Social Seucrity, will be noticed by almost every working and non-working person, there is at least one nugget of news for the transit community.
Sec. 727 of the tax relief bill continues the temporary "parity" of tax-favored transit benefits for one more year, through December 31, 2011. This means that employers can continue to provide tax-free transit and vanpooling benefits of up to approximately $230 per month under Section 132(f) of the Internal Revenue Code. This is the same as the amount of tax-free parking benefits employers are allowed to provide.
Prior to enactment of the American Recovery and Reinvestment Act (ARRA), transit benefits were capped at an annually adjusted rate that was approximately half the value of allowed parking benefits. ARRA provided a temporary increase for transit, but this going to expire this month, and the transit benefit would have reverted to an estimated $120 per month, were it not for this legislative action.
Other aspects of the "tax relief" bill may be noticed in some corners of the transit community. There are extensions of the Work Opportunity Credit and New Markets Tax Credits, which can facilitate employment of certain populations and tax-favored investments in economically distressed areas, respectively. Some "post-Katrina" and "post-9/11" tax credit programs also are extended. On the other hand, the "Build America Bonds" program created under ARRA is not being extended, and new bonding will come to an end this month.
In other news, Senate efforts to pass a comprehensive "omnibus" appropriations bill have fallen apart. Senate leaders are regrouping, to see what next steps to take. Since the current continuing resolution expires this weekend, some action is imminent, but it's hard to gauge whether the next legislation will sustain government spending for a few days, a few months, or the remainder of the current fiscal year.
Sec. 727 of the tax relief bill continues the temporary "parity" of tax-favored transit benefits for one more year, through December 31, 2011. This means that employers can continue to provide tax-free transit and vanpooling benefits of up to approximately $230 per month under Section 132(f) of the Internal Revenue Code. This is the same as the amount of tax-free parking benefits employers are allowed to provide.
Prior to enactment of the American Recovery and Reinvestment Act (ARRA), transit benefits were capped at an annually adjusted rate that was approximately half the value of allowed parking benefits. ARRA provided a temporary increase for transit, but this going to expire this month, and the transit benefit would have reverted to an estimated $120 per month, were it not for this legislative action.
Other aspects of the "tax relief" bill may be noticed in some corners of the transit community. There are extensions of the Work Opportunity Credit and New Markets Tax Credits, which can facilitate employment of certain populations and tax-favored investments in economically distressed areas, respectively. Some "post-Katrina" and "post-9/11" tax credit programs also are extended. On the other hand, the "Build America Bonds" program created under ARRA is not being extended, and new bonding will come to an end this month.
In other news, Senate efforts to pass a comprehensive "omnibus" appropriations bill have fallen apart. Senate leaders are regrouping, to see what next steps to take. Since the current continuing resolution expires this weekend, some action is imminent, but it's hard to gauge whether the next legislation will sustain government spending for a few days, a few months, or the remainder of the current fiscal year.
Thursday, December 9, 2010
Preparing for extensions, continuations
As widely reported, federal spending for the current fiscal year (i.e., the year ending September 30, 2011, or FY 2011), has not been finalized by Congress and Pres. Obama. The current "continuing resolution" is keeping the federal government in business through Dec. 18, 2010.
The House has passed a massive, government-wide continuing spending bill that would sustain federal programs and activities through the remainder of the fiscal year. Under this legislation, most federal programs would be sustained at their FY 2010 funding levels, with some adjustments here and there. The House bill appears to be devoid of specific project earmarks.
For a number of reasons, this bill is believed to face an uncertain fate in the Senate. Until something predictable starts to emerge in Senate deliberations, I'm loath to post or predict funding levels.
In the transportation arena, one of the critical components of the House spending bill is a one-year extension of the current SAFETEA-LU highway and transit legislation, continuing these authorizations through September 30, 2011.
Speaking of extended authorizations, another piece of legislation, the Claims Resolution Act of 2010, was just signed into law by Pres. Obama. While the headline features of this bill are guaranteeing settlements for Native Americans (over BIA-administered trust accounts) and African-American farmers (concerning improperly denied farm loans), a key feature of this legislation for public and community transportation stakeholders is an extension of the Temporary Assistance for Needy Families program authorizations through September 30, 2011.
The House has passed a massive, government-wide continuing spending bill that would sustain federal programs and activities through the remainder of the fiscal year. Under this legislation, most federal programs would be sustained at their FY 2010 funding levels, with some adjustments here and there. The House bill appears to be devoid of specific project earmarks.
For a number of reasons, this bill is believed to face an uncertain fate in the Senate. Until something predictable starts to emerge in Senate deliberations, I'm loath to post or predict funding levels.
In the transportation arena, one of the critical components of the House spending bill is a one-year extension of the current SAFETEA-LU highway and transit legislation, continuing these authorizations through September 30, 2011.
Speaking of extended authorizations, another piece of legislation, the Claims Resolution Act of 2010, was just signed into law by Pres. Obama. While the headline features of this bill are guaranteeing settlements for Native Americans (over BIA-administered trust accounts) and African-American farmers (concerning improperly denied farm loans), a key feature of this legislation for public and community transportation stakeholders is an extension of the Temporary Assistance for Needy Families program authorizations through September 30, 2011.
Wednesday, November 10, 2010
HHS Publishes FMAP rates for 2012
One of the most important numbers for state budgeting and other purposes is the Federal Medical Assistance Percentage, or FMAP. At its core, this number represents the rate at which the federal government will reimburse states for medical services they provide through Medicaid, but FMAP rates also are used in a number of other federal programs, including the Children's Health Insurance Program, support to states for child support enforcement, some payments to states through the Child Care and Development Fund, and some assistance to states for foster care and related programs.
Because these programs, especially Medicaid, represent huge portions of states' budgets, FMAP-based reimbursements loom large in state budgeting. As a result, state agencies and their partners are taking note of a notice published today (November 10) by the US Dept of Health and Human Services, establishing the FMAP rates that will be in effect from October 1, 2011, through September 30, 2012. FMAP rates are calculated every year. Current and historical rates are posted on-line by the HHS Assistant Secretary for Planning and Evaluation (ASPE). The rates for FY 2012 appear in the November 10, 2010, Federal Register, but soon will make their way to the ASPE web site.
For transportation providers, FMAP rates may be behind-the-scenes, but are significant. States spend close to $3 billion a year on non-emergency transportation through their Medicaid programs, much of which is provided by public and community transportation services. Since the overwhelming majority of states claim these transportation expenses as a "medical" expense, reimbursed by the federal government at the FMAP rate, any change in those percentages will affect the bottom line of states' Medicaid budgets, and can influence the ways in which states procure and pay for their Medicaid non-emergency transportation.
If you are unfamiliar with FMAP rates, here's a bit of background. They are calculated annually using a formula based on each state's average per capita income. The lower a state's per capita income, the higher its FMAP. By law, no state FMAP can be lower than 50 percent, nor higher than 83 percent (14 states have FMAPs of 50 percent; Mississippi's FMAP is the highest, at 74.73 percent in FY 2011 (going down to 74.18 percent in FY 2012). The District of Columbia's FMAP is set at 70 percent; the FMAP in territories and possessions is fixed at 50 percent. Under the American Recovery and Reinvestment Act, there was a temporary increase of at least 6.2 percentage points in every state's FMAP, which has steered nearly $92 billion of additional federal investments into state Medicaid coffers.
Because these programs, especially Medicaid, represent huge portions of states' budgets, FMAP-based reimbursements loom large in state budgeting. As a result, state agencies and their partners are taking note of a notice published today (November 10) by the US Dept of Health and Human Services, establishing the FMAP rates that will be in effect from October 1, 2011, through September 30, 2012. FMAP rates are calculated every year. Current and historical rates are posted on-line by the HHS Assistant Secretary for Planning and Evaluation (ASPE). The rates for FY 2012 appear in the November 10, 2010, Federal Register, but soon will make their way to the ASPE web site.
For transportation providers, FMAP rates may be behind-the-scenes, but are significant. States spend close to $3 billion a year on non-emergency transportation through their Medicaid programs, much of which is provided by public and community transportation services. Since the overwhelming majority of states claim these transportation expenses as a "medical" expense, reimbursed by the federal government at the FMAP rate, any change in those percentages will affect the bottom line of states' Medicaid budgets, and can influence the ways in which states procure and pay for their Medicaid non-emergency transportation.
If you are unfamiliar with FMAP rates, here's a bit of background. They are calculated annually using a formula based on each state's average per capita income. The lower a state's per capita income, the higher its FMAP. By law, no state FMAP can be lower than 50 percent, nor higher than 83 percent (14 states have FMAPs of 50 percent; Mississippi's FMAP is the highest, at 74.73 percent in FY 2011 (going down to 74.18 percent in FY 2012). The District of Columbia's FMAP is set at 70 percent; the FMAP in territories and possessions is fixed at 50 percent. Under the American Recovery and Reinvestment Act, there was a temporary increase of at least 6.2 percentage points in every state's FMAP, which has steered nearly $92 billion of additional federal investments into state Medicaid coffers.
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