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New Starts Program Overview

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Overview of the New Starts Program

The federal government's primary arena for public transit investment is the New Starts Program, which is administered by the Federal Transit Administration (FTA). The New Starts Program provides federal funding of new rapid transit projects of any mode type that meet certain criteria and follow the guidelines. Beginning in FY08, the FTA introduced the concept of a Small Start and a Very Small Start, which were projects that cost much less than a full New Start and were therefore subject to less stringent criteria and regulations. The FTA is proposing a streamlining of criteria for FY12 that would eliminate the distinction between New Start and Small Start.

New Starts Program Budget

In FY10 $2 billion was allocated for the New Starts Program; this amount is tentatively also available in FY11, although Republicans in the House of Representatives have attempted to carve out over $500 million from the total. $6.6 billion was authorized for the program between FY06 and FY09. The FY12 New Starts Program budget has not currently been finalized, the President wants to allocate $3.2 billion while some Republican members of Congress desire to eliminate it altogether.

New Starts Program Current Recipients

In FY11, New Starts Program recipients currently under construction include Denver's West Corridor LRT, the Long Island Rail Road East Side Access and the Second Avenue Subway in New York City, Dallas's Northwest/Southeast LRT, Salt Lake City's Mid-Jordan LRT and its Weber County commuter rail extension, Seattle's light rail extension to the University of Washington, and the extension of Metrorail towards Dulles Airport in Washington, D.C. In addition to the above a total of thirty-four additional projects are in the pipeline but have not begun construction yet, of which the most notable is a 20 mile long elevated rail line in Honolulu, Hawaii.

New Starts Program Criteria

Projects under consideration for a New Starts Program grant are judged on a variety of criteria. For each of the criteria, the project is given one of three ratings: low, medium, or high. Projects that receive an overall project rating of less than medium will not be considered for New Starts Program funding.

Of the program criteria, arguably the most important is the local financial commitment to the project. New Starts funding typically provides a maximum of 60% of the capital funding needed to complete the project - the rest must come from other sources. In addition, the FTA will not fund projects unless it is confident that the local transit agency will be able to afford to operate the project when it is completed.

A lot of the local "match" money, as it is called, comes from local taxes, usually sales taxes, dedicated to the project. This point is certainly true in California, where Measure R in Los Angeles and a similar sales tax in Santa Clara County (San Jose) have dedicated amounts to projects in the New Starts Program funding stream. Honolulu's project is partially being paid for a state-wide increase in the excise tax; this state-wide application will probably remain unusual as it is unlikely that voters in Syracuse New York, for example, would vote for a tax increase to construct a project in New York City. When possible, however, states can contribute funding from other sources. Public-private arrangements, where private companies put up some project funding, have become more common in other countries, including Canada, but are still rare in the United State. A west side commuter rail project in Denver is planned to take advantage of this kind of partnership.

In addition to the local financial commitment a project must secure an acceptable project justification rating. The project justification rating is derived from a combination of the environmental benefits, operating efficiencies, mobility improvements, cost effectiveness, potential of economic development, and land use aspects of the project. Many of the components of this section of the rating appear as a result of a change orchestrated by the Obama administration in January 2010. During the Bush administration the primary criteria were cost and how the cost compared with the shortening of commute times that would occur as a result of the project.

New Starts Program Timeline

Before a given project can be considered for New Starts funding, an alternatives analysis must be conducted. An alternatives analysis exhaustively studies a wide variety of proposal to improve transit in a particular study area and how each proposal would score on the list of criteria described above. In addition to rapid transit projects the alternatives analysis must include what is known as a Transportation Demand Management (TDM) alternative and a No Build alternatives. The TDM alternative explores how the current transportation situation could be improved with very low cost solutions such as traffic signal priority. The No Build alternative explores how the situation will be in the future if nothing is done at all. At the conclusion of the alternatives analysis, a Locally Preferred Alternative is selected. If the Locally Preferred Alternative meets FTA guidelines then the project will be granted permission to move into preliminary engineering; if at that point the guidelines are still met the project will move into Final Design, and if the guidelines are still met at that stage actual construction can begin.

Final Thoughts

The New Starts program has contributed funding to almost all of the new rapid transit projects built in the last twenty years. The new Obama project justification guidelines are encouraging, as they recognize the fact that a rapid transit line, or any transit, will not be successful without supportive land use. While some may argue about the current effectiveness of these projects - for a great example consider Governor of New Jersey Chris Christie, who cancelled a major project in the New Starts program funding stream - a second rail tunnel between New Jersey and Manhattan - the proper lens through which to evaluate these projects is not the present day but twenty to thirty years in the future. As gas prices climb ever higher, a project that seems to be a waste of money in 2011 may turn out to be a godsend in 2031.

Return to the Basics of Transportation Funding .

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