American Recovery and Reinvestment Act

Update:

Monday, February 23, 2009 ... On Wednesday, February 25, MTC will consider a $490 million spending plan for the transit and formula funding anticipated to come to the region from the American Recovery and Reinvestment Act, signed into law just one week ago. The final staff proposal directs nearly 80 percent of the funds into rehabilitation of the region's public transit and local street and road system. Staff is also recommending $70 million for the BART Oakland Airport Connector, $13 million for safety projects and $19 million for the Freeway Performance Initiative. The proposal also recommends that the Commission seek $400 million for the San Francisco Transbay Terminal Train Box from the $8 billion High Speed Rail & Intercity Rail competitive grant program and $50 million for Doyle Drive from competitive pots available for roadways in National Parks. For more details on the proposal, see the staff memo here.

Tuesday, February 17, 2009 ... President Obama signed the American Recovery and Reinvestment Act today, a $787 billion package of spending and tax cuts designed to stimulate the national economy. The final bill contains approximately $49 billion in transportation-related spending, including $27 billion for highways and $16.4 billion for public transit, including high speed rail. The bill also contains a change to the tax code to increase the allowable pre-tax transportation fringe benefit for transit and vanpool expenses from $120/month to $230/month, the same amount allowed for parking. For an estimate of how much the Bay Area would receive, see yellow box at right.

House Takes Swift Action on Economic Stimulus Package

Wednesday, January 28, 2009 … Working in partnership with President Obama, Congress is developing an $800–$900 billion economic recovery package calling for massive new spending as well as tax cuts.

The House passed its version of the American Recovery and Reinvestment Plan today with a vote of 244 to 188 that largely went along party lines. "This package is the first crucial step in a concerted effort to create and save 3 to 4 million jobs, jumpstart our economy, and begin the process of transforming it for the 21st century," the House Committee on Appropriations wrote in its bill summary.

Meanwhile, the Senate Appropriations Committee yesterday approved its portion of the American Recovery and Reinvestment Plan, paving the way for consideration by the full Senate.

“As Americans contend with the painful effects of the most serious economic crisis since the Great Depression, the U.S. Congress is responding with a bold plan to revive our struggling economy, put millions of people to work, and lay the foundation for America’s economic competitiveness in the 21st century,” a press release from the Senate Appropriations Committee stated.

The bills focus spending on sectors deemed critical to rebuilding the nation’s economy, including transportation and other infrastructure, technology and science, schools and educational programs, clean energy, and healthcare.

The economic stimulus plan now in development in Washington is fairly in synch with a set of guiding principles adopted by MTC In December 2008.

"The Metropolitan Transportation Commission (MTC) supports a sustained effort to renew the nation’s transportation infrastructure to benefit the United States long after the current recession ends with investments that will endure for generations,” MTC’s legislative principles note. “Residents of the San Francisco Bay Area continue to rely every day on major infrastructure projects built during the Great Depression, such as the Golden Gate and San Francisco-Oakland Bay Bridges, Caldecott Tunnel, Berkeley Marina, Alameda County Courthouse, and San Jose Civic Auditorium. These 1930s investments helped make possible the unprecedented economic expansion that followed for decades to come.”

Mirroring concepts in MTC's principles, both versions of the stimulus bill call for distributing short-term funding by existing statutory formulas rather than via project earmarking, although by somewhat different formulas.

Based on the latest versions of the bills, the Bay Area stands to receive in the range of $520 million to $665 million in formula funds.

Short-term stimulus funding likely will focus on system preservation activities that can be commenced and completed quickly, such as road resurfacing, brige repair and bus replacements. MTC's principles also call for a second tier of "longer-term 'game-changing' investment strategies that can jump start a new direction for federal transportation in the 21st century" — particularly in the realms of climate protection and energy security.

Along these lines, the Senate bill includes a $5.5 billion competitive grant program to be administered by the U.S. secretary of transportation for transit, highway or goods movement projects that will have a significant impact on the nation, a metropolitan area or a region. The bill directs the secretary to ensure an equitable geographic distribution of funds, as well as a balance between urban and rural communities, and to give priority to projects that are expected to be completed within three years. The fund would also be replenished by any transit or highway formula funds that are unobligated within one year. The bill establishes a minimum grant size of $20 million and a maximum grant size of $500 million.

— Brenda Kahn