FY2024 President’s Budget includes trio of suggested transit policy revisions

March 10, 2023
The proposed policy changes are designed to provide flexible relief options to agencies facing continued financial challenges.

The Federal Transit Administration (FTA) included three proposed policy revisions in the President’s Budget request for Fiscal Year 2024. The revisions are designed to give transit agencies greater flexibility in the use of their formula funds, relieve potential financial burden from rural transit providers delivering mobility services to elderly and disabled riders and expands allowable land acquisitions prior to environmental reviews commencing.

The budget proposal reads:

“The nation’s transit systems play a critical role in ensuring riders can access jobs, school, healthcare and opportunity, along with spurring sustainable economic development, reducing highway congestion and lowering climate emissions. However, transit systems face an uncertain future as ridership and fare revenue have not fully rebounded from the COVID-19 pandemic, given significant shifts in work and commuting patterns.”

Under the budget request, FTA is proposing transit agencies serving larger urbanized areas be granted flexibility to pay for operating expenses with the funds received through the Section 5307 Urbanized Area Formula Program and Federal-Aid Highway programs. This is designed to alleviate the operating budget gap agencies are facing due to lost fare revenue during the COVID-19 pandemic and extended recovery phase.

FTA held a press call to discuss the administration’s budget request and noted the flexibility in using formula funds for operating expenses already exists for smaller agencies, and the proposed temporary policy change would extend this option to all agencies that receive formula funds. For FY24, FTA estimates this could open around $6.6 billion in formula for operating expenses. However, the administration explained the suggested language of the statue change ensures agencies that make use of these flex funds will not be penalized at the local level with diminished funds.

A second policy proposal aims to provide relief to rural and small operators by increasing the maximum allowable federal share percent for the Enhanced Mobility of Seniors & Individuals with Disabilities and Formula Grants for Rural Areas programs to 100 percent. The existing federal share of eligible capital costs may not exceed 80 percent and 50 percent for operating assistance.

FTA recognizes these programs fund critical services for older adults, individuals with disabilities and rural populations that, due to the small size of these communities, often struggle to generate support for providing local match funds. The administration believes enacting this policy change will advance equity initiatives and significantly impact rural and nonprofit operators serving seniors and individuals with disabilities at a small dollar cost.

The third proposed policy change would expand situations where land acquisition is permitted prior to the completion of the National Environmental Policy Act (NEPA) process. FTA says the proposed change would amend 49 U.S.C. §5323(q) to cover acquisition of “real property interests,” not just for “corridor preservation.”

Project sponsors will be able to purchase needed properties outside of existing transit corridors, consistent with Federal Highway Administration (FHWA) authorities. Current rules only allow agencies to purchase property in advance of a project completing the NEPA process if the property is within an existing transit corridor. FTA explains agencies operating in competitive real estate markets are finding properties meeting these requirements to be harder to secure. FTA also explains the suggested change brings its programs into parity with FHWA’s programs and allows project sponsors greater flexibility to acquire property and preserve it for future use.

Congress will need to act on these changes because they require changes in statutes. FTA says the proposed budget includes the suggested changes for Congressional consideration.


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About the Author

Mischa Wanek-Libman | Editor in Chief

Mischa Wanek-Libman serves as editor in chief of Mass Transit magazine. She is responsible for developing and maintaining the magazine’s editorial direction and is based in the western suburbs of Chicago.

Wanek-Libman has spent more than 20 years covering transportation issues including construction projects and engineering challenges for various commuter railroads and transit agencies. She has been recognized for editorial excellence through her individual work, as well as for collaborative content. 

She is an active member of the American Public Transportation Association's Marketing and Communications Committee and serves as a Board Observer on the National Railroad Construction and Maintenance Association (NRC) Board of Directors.  

She is a graduate of Drake University, where she earned a Bachelor of Arts degree in Journalism and Mass Communication with a major in magazine journalism and a minor in business management.