First we need to be cautious of unintended consequences or fatal flaws. Transit capital needs are not being met either so compromising capital dollars for operating dollars is not an option. Second we need to make sure that federal operating dollars don’t result in state and local governments reducing their contribution to transit operations. Finally we need to make sure there is a direct link between additional operating dollars and additional service.

Here are four steps.

As the article states the next stimulus bill should have general fund support for transit operations. This isn’t restoring operating funds as the article states but a one time emergency fix. (The long term fixes are below.) These funds for a two to three year period are to specifically restore service hour’s cuts since January 1, 2008, prevent service hour cuts announced prior to the introduction of the legislation or to increase service hours to meet unmet demand. This would be new funds thus not compromising capital funds and each recipient would have to demonstrate that number of service hours being “purchased” with these dollars equals the marginal cost of providing service and not in lieu of state and local funding that hasn’t already been reduced; addressing the other two concerns.

The Carnahan bill should be modified to allow transit agencies below a certain size (e.g. 100 peak pull-out fixed route buses) use 50 to 100% of the formula funds for operating provided they determine that the amount of revenue used for operations from all non federal sources is not declining. The reason the size of a system is more important than the population of the service area is that a small transit operator in a large urban area is really no different than a transit operation a small city. Smaller systems tend to have smaller capital needs hence could make better use of federal dollars with this flexibility.

The next two ideas should be contained in the next authorization to make sure that state and local government step up to the plate and adequately fund transit operations.

An incentive program of at least $1 billion per year should go to states and/or regions whose aggregate service transit service hours per capital are either equal the highest year between 2000 and 2009 or exceed the median for comparable states and regions. (Note because it is based on per capita service hours will have to increase to keep pace with population changes.) Part of this incentive could also go to states that allow their transportation user fees (gas taxes etc.) used on transit capital and operations.

The House authorization bill calls for $75 billion in two new flexible transportation program over the next six years. Before a state or region can tap into any of this money the aggregate service transit service hours per capital either are either equal the highest year between 2000 and 2009 or exceed the median for comparable states and regions.

These for ideas provide a comprehensive approach to the lack of transit operating funds without jeopardizing transit capital or other unintended consequences.