Coordination of Transportation Services Gets GAO Spotlight

Most of the time, the US Government Accountability Office (GAO) is a quiet watchdog, helping Congress examine the effectiveness of federal programs and activities, and working hard to ferret out waste, fraud and abuse. This past week, though, GAO sailed out into the media limelight, with an attention-getting government-wide examination of duplication in federal government programs.

This 345-page report, entitled Opportunities to Reduce Potential Duplication in Government Programs, Save Tax Dollars, and Enhance Revenue, received coverage from all corners of the media spectrum, including National Public Radio, the Washington Post, Fox News Channel and many other news outlets. Following the report's publication, the Comptroller General, Gene Dodaro, gave testimony on the GAO findings at a March 3, 2011, hearing convened by the House Oversight and Government Reform Committee.

As we state on the front page of the National Resource Center for Human Service Transportation Coordination's (NRC) web site, www.NRCtransportation.org, coordination between transportation and human services is "good practice, good policy." That same thinking permeates this GAO report. In numerous points throughout the report, GAO highlights opportunities for the federal government and its programs to function more effectively through several aspects of streamlining and interagency or intergovernmental coordination. Here are just a few highlights that pertain to coordination between transportation and human services:


1. Citing a 2009 NRC report, GAO recommends that the eleven federal departments and agencies comprising the interagency Coordinating Council on Access and Mobility (CCAM) "should identify and assess their transportation programs and related expenditures and work with other departments to identify potential opportunities for additional coordination such as the use of one-call centers, transportation brokerages, or shared resources, among other options.... [and] should develop the means for collecting and sharing this information by establishing agency roles and responsibilities and developing a strategy to reinforce cooperation."

2. In another recommendation regarding coordination between transportation and human services, GAO states "Federal departments also have more work to do in developing and disseminating policies and grantee guidance for coordinating transportation services. This is important because state and local grantees typically look to their administrating departments for guidance on issues such as coordination."


3. Picking up a point that has been raised by the NRC in 2009, and in a special CCAM Report to the President in 2005, GAO observes that "progress has been made in coordination efforts, particularly at the state and local level. However, to assure that coordination benefits are realized, Congress may want to consider requiring key programs to participate in coordinated planning."

The above points, and related comments, such as GAO's current estimation that there may be 80 federal programs whose funds may be used in some way to provide transportation services to "transportation disadvantaged" populations, but for which there continue to be no reliable data on the precise number of such programs, nor the nature or extent of how these programs' expenses are used on transportation, all can be found on pages numbered 134 through 139 of the GAO report (if reading on line, note that these are the 139th through 144th pages of text in the PDF version of the document).

Some other GAO findings and recommendations that pertain to the coordination of transportation and human services include:

• Using the overdue reauthorization of SAFETEA-LU as a vehicle to overcome the growing fragmentation of federal surface transportation programs. GAO had looked at one small part of this fragmentation in 2009, recommending that "consolidating the application processes for three federal transit programs that provide funding for transportation-disadvantaged populations [i.e., the FTA Job Access, New Freedom, and Section 5310 programs] could reduce the administrative burden for states and transit agencies applying for these funds."
• Improving collaboration among the economic development programs administered by USDA, HUD, the Small Business Administration, and the Commerce Department's Economic Development Administration.
• Promoting streamlining, instead of duplication, among the various safety and security systems for transit and trucking that have been established by the Department of Homeland Security, the Federal Transit Administration, and the Federal Motor Carrier Safety Administration.
• Reducing the programmatic inconsistencies between USDA's various food and nutrition programs.
• Taking steps to better coordinate the many programs that provide services and assistance to homeless persons.
• Co-locating federally funded job training programs and consolidating their administrative structures.
• Transforming the New Markets Tax Credit into a federal grant-making program.
• Helping states do more to "implement and oversee processes to prevent, identify, and recover improper payments and to reduce the billions of dollars that are annually lost to improper Medicaid payments."

Judging from the reception of this report on Capitol Hill and across the news media, it would appear that there is much interest in finding ways to promote improved coordination of services. To borrow a phrase from the Roosevelt administration, "We Do Our Part" at the National Resource Center to make the coordination between public transportation and human services an effective reality.
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No need to hold your breath....at least not this week

Many people in the nation's public transit community were becoming increasingly worried this past week, when speculation increased by the minute that there would be a lapse in federal appropriations, and at the same time, the legislative authority for highway and transit programs under SAFETEA-LU also would lapse. With regard to federal spending, every government agency was readying its "contingency plans," and preparing the messages to communicate to grantees and customers. Within the US Department of Transportation (DOT), extra effort was being paid to what could or could not be done if there were to be a lapse in authorizations.

However, the cause for concern has passed, if only for the moment.

A short-term continuing resolution has been signed into law that keeps federal funds on tap for two more weeks, through March 18, 2011. As was widely reported in the news media, this stopgap measure included several billion dollars of budget cuts, but none of those cuts, not even those identified within the DOT, appear likely to have any effect on transit programs or grantees. In general, the spending cuts under this continuing resolution represent programs that were carried over from last year's appropriations, but which neither President Obama nor Congress had any intention of funding this year in the first place.

Today, President Obama is expected to sign another bill into law: the Surface Transportation Extension Act of 2011. This bill basically extends SAFETEA-LU through the end of the current fiscal year. This takes a lot of the pressure off both Congress and the DOT, in the short term, but pressures to renew our nation's federal highway and transit programs remain very real and very urgent.

While worries over SAEFTEA-LU authorizations may have eased for now, the issue of federal appropriations continues to loom large. Expect more last-minute legislative drama in two weeks' time.
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FTA Sets Its Position on "Buy America" Waivers

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.
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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.
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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).
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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.
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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.
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