Reconnecting America People * Places * Possibility

Reconnecting America Analysis of FY 12 New Starts Report

On February 15, 2011, the Federal Transit Administration issued its Annual Report on Funding Recommendations for the New Starts and Small Starts program for fiscal year 2012 (FY 2012). The report lists the New Starts and Small Starts projects that make up the program budget included in the President’s FY 2012 Federal Budget, which was released on February 14, 2011.  The total budget for the New Starts and Small Starts programs in the President’s FY 2012 budget is $3,225,556,000.

New Starts and Small Starts are discretionary grant programs that provide capital funding for fixed-guideway transit projects that are locally planned, implemented and operated.  Authorized under the federal surface transportation bill of 2005 (SAFETEA-LU), these funds can be used to support the development of heavy rail, light rail, commuter rail, streetcars, bus rapid transit systems and ferries.  As outlined in Section 5309 of Title 49 of the United States Code, New Starts projects are those that have total capital costs of more than $250 million or are requesting $75 million or more in federal funding, while Small Starts projects are those with costs falling below these thresholds.  

Overview of FY 2012 New Starts Report

The New Starts and Small Starts budget request of $3.24 billion represents an increase of 77 percent over the program’s budget in FY 2011.  This includes funding recommendations for 32 projects, including 19 recommended New Starts projects, nine Small Starts projects and four potential future projects. 

FTA’s recommended budget includes $835.4 million to support seven ongoing New Starts projects, all of which are either under construction or open for service.  An additional $1.295 billion is recommended for nine projects that have pending full funding grant agreements (FFGAs)[1], which means they were recommended for funding in past years and are undergoing final design.  Three projects are recommended for new FFGAs totaling $443.6 million in FY 2012. The budget includes $180.6 million for nine Small Starts projects and $400 million in discretionary funding for additional, future New or Small Starts projects.  FTA lists four transit projects that could become eligible for this additional funding if the projects overcome local uncertainties or funding issues during the fiscal year.  A summary table of FY 2012 projects with existing or proposed FFGAs is provided below, and more detail about these projects is provided in FTA’s FY 2012 Annual Report on Funding Recommendations: 

http://www.fta.dot.gov/publications/reports/reports_to_congress/publications_12354.html

Here are some facts about the transit projects recommended for funding in FY 2012:

  • For New Starts projects, the average proposed federal FY 2012 allocation is $135.5 million and the average New Starts share of total capital costs is 49 percent. In FY 2011 the average New Starts share of total capital costs was 47 percent.
  • For Small Starts projects, the average proposed federal FY 2012 allocation is $20.1 million and the average Small Starts share of total capital costs is 57 percent.  In FY 2011 the average Small Starts share of total capital costs was 59 percent. 
  • Of the 32 recommended and potential future grantees, 13 are new to the list in FY 2012.  Of these new projects, there are five in California and one project each from North Carolina, Oregon, Utah, Washington, Arizona, Florida, Michigan and Texas. 
  • Of the 23 recommended and potential future New Starts projects, 13 are light rail, five are subway/heavy rail, four are commuter rail, and one is bus rapid transit.  All of the Small Starts projects are bus rapid transit systems except for one light rail extension in Mesa, AZ. 

In addition to the projects recommended for funding, the New Starts report discusses 11 other transit projects that are in the New Starts “pipeline,” which means that they have been approved for preliminary engineering or final design but are either not yet ready to enter into a capital funding agreement with FTA or did not score as competitively as other projects, according to the New/Small Starts rating system.  It is important to note that all of the recommendations in the FY 2012 New Starts report are subject to Congressional appropriations, a process that can result in changes to funding levels or to the list of funded projects. 

Transit projects recommend for FFGAs and in the New Starts pipeline are evaluated against a range of criteria and awarded a score for both “Project Justification” and “Financial Rating.”  The project evaluation criteria used to determine the FY 2012 recommended projects did not vary from that used in FY 2011.

 

 

Discussion

The recommended New Starts/Small Starts budget of $3.24 billion represents a significant increase over the FY 2011 budget of $1.82 billion.   The increase is primarily due to three factors:

  • In FY 2012, FTA introduced eight new New Starts projects while only two New Starts projects from FY 11 were removed from the recommended project list (New Jersey’s Access to the Region’s Core, which was cancelled, and Denver West Corridor Light Rail, for which the federal funding agreement has been fulfilled).  
  • The average award for New Starts projects increased from $86,645,040 in FY 11 to $135,472,998 in FY 2012.  As the average federal share of projects did not change significantly, nor did the average total capital costs of projects, Reconnecting America speculates that this increase in average project awards for FY 2012 is an attempt to expedite project delivery in the near term.    
  • The budget for “Other New Starts/Small Starts Projects” increased significantly from $44.6 million in FY 2011 to $400 million in FY 2012.  Recognizing that transit project development does not always correspond with the federal budget schedule, FTA included this additional discretionary funding in order to “be poised to provide funding for additional qualified projects” as they become ready to advance through the federal process. 

One billion of the FY 2012 New Starts budget would come from the first-year funding boost of $50 billion that is proposed in the President’s FY 2012 Federal Budget. 

If the FY 2011 budget is any indication, there is likely to be lively debate in Congress over the proposed funding levels for transit in FY 2012.  With the current extension of the federal budget set to expire on March 4th, the House passed a Continuing Resolution (CR) on February 18th that would fund the government for the remainder of FY 2011 but would make significant cuts to transit programs including New Starts.  The House CR, if passed into law, would rescind $280 million in unobligated New Starts balances from fiscal year 2010 and cut the remainder of FY 2011 funds by $431 million.  According to estimates by the American Public Transportation Association, those cuts to the New Starts program could result in the loss of 34,000 jobs.[2]

While the future of the New Starts budget remains unclear, it is certain that there is significant demand for transit funding as regions across the country seek to reinvigorate their economies.    It is also important to note that the Annual New Starts Report includes only those projects that have been formally approved by FTA to enter the New Starts “pipeline”, and does not include the many other transit projects around the country that are in earlier stages of planning or alternatives analysis, or those being funded by other federal, state or local resources. 

Summary of Recommended FY 2012 New Starts and Small Starts Budget

FY 2012 President's Budget

Full Funding Grant Agreements

 

NY New York, Long Island Rail Road East Side Access

$215,000,000

NY New York, Second Avenue Subway Phase I

$197,182,000

TX Dallas, Northwest/Southeast LRT MOS

$86,249,717

UT Salt Lake City, Mid Jordan LRT

$78,889,750

UT Salt Lake City, Weber County to Salt Lake City Commuter Rail

$52,047,490

VA Northern Virginia, Dulles Corridor Metrorail Project Extension to Wiehle Ave.

$96,000,000

WA Seattle, University Link LRT Extension

$110,000,000

Pending Full Funding Grant Agreements - Projects First Recommended For Funding in Prior Years

CA Sacramento, South Sacramento Corridor Phase 2

$50,000,000

CA San Francisco, Third Street Light Rail Phase 2 - Central Subway

$200,000,000

CO Denver, Eagle Commuter Rail

$300,000,000

CT Hartford, New Britain - Hartford Busway

$45,000,000

FL Orlando, Central Florida Commuter Rail Transit

$50,000,000

HI Honolulu, High Capacity Transit Corridor Project

$250,000,000

MN St. Paul-Minneapolis, Central Corridor LRT

$200,000,000

TX Houston, North Corridor LRT 

$100,000,000

TX Houston, Southeast Corridor LRT

$100,000,000

New Full Funding Grant Agreement Funding Recommendations

CA San Jose, Silicon Valley Berryessa Extension Project

$130,000,000

OR Portland, Portland-Milwaukie Light Rail Project

$200,000,000

UT Salt Lake County, Draper Transit Corridor

$113,618,000

Other Capital Investment Program Funding Recommendations

$400,000,000

(FTA may fund these or other projects not listed below)

CA Los Angeles, Regional Connector Transit Corridor

 

CA Los Angeles, Westside Subway Extension

 

NC Charlotte, LYNX Blue Line Extension - Northeast Corridor

WA Vancouver, Columbia River Crossing Project

 

Small Starts Funding Recommendations

AZ Mesa, Central Mesa LRT Extension

$37,500,000

CA Fresno, Fresno Area Express Blackstone/Kings Canyon BRT

$17,800,000

CA Oakland, East Bay BRT

$25,000,000

CA San Francisco, Van Ness Avenue BRT

$30,000,000

FL Jacksonville, JTA BRT

$6,443,200

MI Grand Rapids, Silver Line BRT

$12,887,943

TX El Paso, Mesa Corridor BRT

$13,540,000

WA King County, RapidRide E Line BRT

$21,629,000

WA King County, RapidRide F Line BRT

$15,880,000

Oversight Activities

$80,888,900

TOTAL FY 2012 Budget

$3,235,556,000

 


[1] A Full Funding Grant Agreement (FFGA) is a contract between the project sponsor and the Federal Transit Administration that formally establishes the maximum level of New Starts funding and outlines the terms and conditions of Federal financial participation.

[2] American Public Transportation Association (APTA), “Job Loss from Proposed Cuts to Public Transportation, High-Speed Intercity Passenger Rail and Amtrak,” February 14, 2011.