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Tag: transit supply chain

New and expanded transit projects may not get built

City and state budget deficits and a drastic decline in transit ridership have pushed transit agencies to the brink of collapse. Communities that were on the verge of expanding or building new transit may not be able to finance their projects if Congress doesn’t act.

Transit agencies across the country are facing huge operating and budget losses. While transit agencies are still operating to provide essential service, they are on track to lose billions this year due to revenue dwindling as a result of dramatically reduced ridership, increased cleaning costs, diminished local tax receipts, and other impacts from a contracting economy.

This has had a predictable impact on service, with every agency in the country making changes to reflect the drops in ridership. But also at risk are plans to expand or build new transit that have been in the works for years. These new services would yield significant mobility and economic benefits for communities in the years to come, but only if they can get off the ground.

Communities of all sizes apply to the federal Capital Investment Grants (CIG) program in order to secure federal funding for new or expanded transit projects—subway systems, commuter rail, light rail, streetcars, and bus rapid transit. Participating in the CIG program requires significant local political and financial commitment and years of dedicated work. But even with that comparatively high bar, there is still great demand for this funding, with over $23 billion in requests from projects currently waiting in the CIG “pipeline” for federal funding.

To access funding, Congress has recently required local communities to come up with at least 50 percent of the total cost, and under this administration, FTA has sought to make local communities pay even more. For many CIG projects, the local match comes from tax revenue and local community budgets. In many cases, communities have gone to the ballot to increase taxes to pay for these transit projects.

Now, all those carefully laid plans and contingencies could be for naught in light of the gaping hole that’s suddenly appeared in many municipal budgets—a 50 percent (or greater) local match could become an insurmountable challenge. Even projects that were on the verge of receiving a grant could see their “overall project rating” downgraded, which would prevent them from receiving a grant and delay critical projects which support jobs today, and long term economic development tomorrow.

Boosting CIG to create jobs

Back in March, Congress passed the Coronavirus Aid, Relief and Emergency Security (CARES) Act, a $2 trillion relief package that gives transit agencies $25 billion in emergency relief. While providing transit operating support, as the CARES Act did, will continue to be important to keep transit running and allow service to rebound as economies reopen, ensuring that capital projects receive adequate federal support will spur our economic recovery in the long run. Transit is a job creator, and investing in CIG projects means investing in jobs in local communities and in the manufacturing sector across the country. The supply chain for public transportation touches every corner of the country and employs thousands of Americans who produce tracks, seats, windows, communications equipment, wheels, and everything else in between. More than 2,000 manufacturing facilities and companies are tied directly to the manufacture or supply of new transit systems and repairs and upgrades to existing systems.

Every $1 billion invested in public transit creates more than 50,000 jobs and economic returns of $3.7 billion over 20 years. And during the 2009 stimulus, we found that dollar for dollar, “public transportation produced 70 percent more job hours” than funds spent on highways.

Further, access to transit has proven to be critical to economic development, and any long-term economic recovery will be nearly impossible without transit service to help people get back to work after this unprecedented crisis subsides. Companies of all sizes are relocating to or deciding to start up in walkable downtowns and communities with transit to ensure access to a high quality workforce. Communities designed around transit are desirable for workers and businesses, which will boost economic growth and support our economic recovery.

Investments in transit create jobs directly, and lay the foundation for long term economic prosperity.

What Congress can do

Congress has already stepped up to help transit agencies get through the beginning of this crisis by providing operating support in the CARES Act, and while transit agencies need additional operating support, we must also think about other important challenges facing transit.

To support local community demands for transit, and job creation today while supporting the conditions for job creation tomorrow, we need CIG, and to save CIG, Congress must:

  • Provide no less than the FY19 funding level of $2.55 billion and $3.1527 billion in FY21 if Congress enacts the proposals below.
  • Eliminate the local match for new CIG projects for projects that demonstrate an inability to cover the cost of the local match.
  • Retroactively eliminate the local match for existing projects that demonstrate an inability to cover the cost of the local match.
  • Prevent FTA from changing overall project ratings due to changes in local commitments or ridership projections.

A proposal for the long-term transportation reauthorization released by U.S. House Democrats on June 3 would address a number of these points, at least partially. There’s nearly $1 billion for emergency CIG support in the first year and a delay in payment for local matches. The bill would also allow a 30 percent increase in the federal share of project funding (for a total of up to 80 percent) for new projects and projects that received their grant as far back as 2017.

These actions would reduce strain on local community budgets, allow them to proceed with building transit, and give USDOT the resources to fund more projects. In the long-term, this would ensure more robust transit service and greater access to jobs and services. But in the short-term, it would create jobs and put Americans to work. It would allow projects to continue to move through the “pipeline” and eventually receive funding.

What transit agencies can do

As we wrote recently, transit agencies need to track and publicize how COVID-19 is impacting their agency. They should quantify the impacts of low ridership and of keeping service running for essential workers and document stories from personnel and riders to make the case for continued federal funding and local support.

Tell Congress what your agency needs and what your experience of waiting for CIG funds has been like. Congress needs to hear that there is continued demand for CIG funding and sustained local support to continue expanding transit.

And most importantly, continue to engage with local advocates and riders. Ask them to call their elected officials to explain how important transit is, and how transformational new or expanded transit in the community could be.

KC Streetcar supports jobs locally and across the U.S.

Last month Transportation for America’s Chairman John Robert Smith traveled to Overland Park, KS to discuss the economic impact of public transportation dollars on local manufacturing jobs with state and local leaders. Local manufacturer Dimensional Innovations (DI) hosted the event at their facility where attendees saw the recently constructed shelters destined for the Downtown Kansas City Streetcar. Transit shelters are one part of the transit supply chain with over 20 percent of DI’s business stemming from public transportation.

Since opening in 2016, the Kansas City Streetcar (KC Streetcar) has been a remarkable success. It’s seen record high ridership levels, logging more than five million passenger trips. It’s also spurred more than $2 billion in residential, retail, and commercial investment. As Tom Gerend, Executive Director of the Kansas City Streetcar Authority states, the streetcar has fueled a economic boom in Kansas City.

But the benefits of transit systems like the KC Streetcar go far beyond the streets and neighborhoods they serve. In the KC Streetcar’s case, it has supported manufacturing jobs at 83 suppliers in 26 different states. Last month, Transportation for America traveled to one such manufacturer—Dimensional Innovations—in Overland Park, KS to highlight the economic impact of public transportation dollars on manufacturing jobs for state and local leaders.

Congresswoman Sharice Davids and staff for Congressman Sam Graves joined leadership from the Greater KC Chamber of Commerce, Kansas City Area Transportation Authority, and Kansas City Streetcar Authority to tour Dimensional Innovations’ manufacturing facility where they build the station shelters for the KC Streetcar.

DI uses its inspired design skills—honed from creating interactive pieces for museums, hospitals, and sports arenas—to make sleek transit shelters that incorporate public art pieces and provide information to customers. Over 20 percent of DI’s business stems from public transportation.

“DI has been incredibly fortunate to be involved in transit-related work across the Kansas City metro for nearly 15 years,” said Tucker Trotter, CEO of Dimensional Innovations. “Transit work has not only created multiple jobs for our organization and allowed us to invest in other areas for growth, but it’s done the same for our local partners and subcontractors. We believe this creates a positive ripple effect within our community, and makes Kansas City an even better place for our employees and their families.”

The transit supply chain is far reaching, touching almost every congressional district. When cities like Kansas City or Chicago invest local and federal dollars in transit projects, they support jobs in the transit supply chain throughout the country. In the case of the KC Streetcar, when Kansas City purchased transit shelters, some of those dollars came to Overland Park and supported jobs locally.

Many public transit manufacturers and suppliers rely on a trained and consistent workforce. Without stable funding from state and federal partners, these jobs might be lost. According to Transportation for America Director Beth Osborne, “that’s a very real threat given that President Trump’s 2020 budget would cut federal transit capital grants by $1 billion.”

The decisions Congress makes regarding transportation funding will impact people who live in communities building transit systems and in the communities that manufacture the seats, engines, wheels, technology, and station shelters that keep those transit systems running. As Gerend says, “Transit investment equals job creation. Not only is the KC Streetcar creating opportunities locally, but it’s helping to create jobs across the country.”

All photos courtesy of Dimensional Innovations.

One more reason buses are cool (literally)

Just before the end of 2018, Transportation for America traveled to Thermo King’s headquarters in Bloomington, MN to get an up close look at the economic impact of public transportation dollars on Minnesota’s manufacturing jobs. Joined by several state and local leaders, Thermo King shared with the group how their high-quality HVAC systems fit into the public transit supply chain.

That welcome rush of cool air when you step onto a bus in the midst of a summer heatwave? You may be experiencing the comfort of a Thermo King cooling system. Back in 1955, Thermo King developed their first air conditioning unit for passenger buses and have been supplying HVAC systems for buses and rail cars ever since. We visited Thermo King’s headquarters in Bloomington, MN to see where they test and design their products.

We worked with the Minneapolis Regional Chamber to bring together several state leaders including Representative Andrew Carlson, Representative Jon Koznik, and Senator Melissa Wiklund, as well as local leaders like Bloomington City Council Member Tim Busse, and members of Bloomington Chamber of Commerce and East Metro Strong. The discussion focused on how federal, state, and local money invested in public transportation supports and creates jobs in Minnesota and across the country.

Investment in public transit not only supports about 500 jobs at Bloomington’s Thermo King facility, but more than 15,000 manufacturing jobs nationwide. Many of those manufacturers and suppliers rely heavily on a trained and consistent workforce. Without stable funding from state and federal partners, these jobs might be lost. That’s a very real threat given that the Trump administration has repeatedly called for eliminating all federal funding for transit capital improvements. And many state governments are quick to cut transit funding when budgets get tight. The transit supply chain and the effects of those cuts aren’t often well understood.

The bottom line is that when we invest in public transit, we are investing in well-paying jobs in communities across America. From assembling busses in Crookston, MN to producing bus seats in Elkhart, IN, or manufacturing rail tracks in Cleveland, OH the public transit supply chain is vast and relies on tens of thousands of hard-working Americans across the country.

Crookston, MN: Where investment in public transit and hard-working Americans “help buses come alive”

Last week Transportation for America traveled to one of New Flyer of America’s transit bus manufacturing facilities in northern Minnesota to meet with state and local leaders like State Representative Deb Kiel, and get a close look at the economic impact of public transportation dollars on Minnesota manufacturing jobs.

State and local leaders get an inside look at New Flyer of America’s transit bus production line in Crookston, MN. New Flyer proudly flies both the US and Canadian flag as part of NFI Group Inc., a multinational company and North America’s largest bus manufacturer with 31 facilities across the U.S. and Canada.

When Americans think about transit, the first thing that comes to mind might be a bus or train moving people in a coastal, bustling urban area. But the work of manufacturing that bus or railcar—as well as its thousands of component parts— is made possible by the billions in state, local, and federal funds invested in transit each year. And those dollars have effects that ripple out to communities of nearly all sizes across the country.

Last week, we convened state and local leaders like State Representative Deb Kiel, Crookston Mayor Wayne Melbye, staff from U.S. Representative Colin Peterson’s office, and others at New Flyer of America’s transit bus manufacturing facility in Crookston, MN for a discussion about how federal, state, and local money invested in public transportation supports and creates jobs in Minnesota and across the country.


(Left) Jennifer McNeill, New Flyer Vice President of Sales and Marketing talks with Craig Hoiseth, Executive Director at Crookston Housing & Economic Development Authority. (Right) Second from right, Rep. Deb Kiel, and other local leaders hear from New Flyer about the inner workings of the Crookston facility.

Crookston, located in the far northwest corner of the Minnesota, is home to one of New Flyer of America’s four transit bus manufacturing facilities in the U.S. New Flyer of America serves all 25 of the largest transit agencies in North America, and is responsible for about half of the transit buses we see on our roads today.

Each week at the Crookston facility alone, they produce about 20 buses that end up serving communities across the U.S. On the tour we saw technicians in this small, rural community in Minnesota hard at work to build buses destined for cities like Phoenix and San Francisco, painting a compelling picture of just how the supply chain for transit ripples from coast to coast.

New Flyer employs over 1,200 people between its two manufacturing facilities in Minnesota. Like many manufacturers, New Flyer needs a trained and consistent workforce to succeed; both time and money are wasted if you have to retrain a workforce every few years. As Jennifer McNeill, New Flyer Vice President of Sales and Marketing, noted, these are skilled manufacturing jobs, not jobs that can be switched on and off as needed.


(Left) New Flyer employees building out the inside of a bus. (Right) Chairman of Transportation for America, John Robert Smith, speaks to the economic impact of public transportation dollars on manufacturing jobs.

70 percent of New Flyer’s buses are purchased with public dollars, and it’s clear that these Minnesota manufacturing jobs—and others in Alabama, Indiana, Kentucky, New York, Washington, and Wisconsin—are directly reliant on the federal government continuing to make smart investments in transit.

Unfortunately, ongoing transit funding isn’t entirely certain today. The U.S. Department of Transportation (USDOT) has been slow to award grants from the major federal program that helps communities make new investments in high-quality transit service. But the issue goes beyond discretionary grant programs. Congress has had difficulty passing multi-year transportation funding bills and finding dedicated funding sources for transportation. Before passing the FAST Act in December 2015 (which funds federal transportation investments through 2020), Congress passed 35 short-term extensions, which creates the kind of uncertainty that threatens manufacturing jobs that depend on a stable pipeline of orders and projects.

Federal money invested in public transportation each year leverages local and state funding and supports thousands of high paying manufacturing jobs in communities like Crookston, and in nearly every state across the country. Our recent report on the public transportation supply chain found that 91 percent [396 of 435] of congressional districts host at least one manufacturer.

Without predictable and stable federal and state funding, we may see transit agencies cut projects and be pressured to cancel bus and railcar orders from manufacturers across the country like New Flyer.

Federal investments in transit go far beyond building buses and trains for big cities. The transit supply chain supports high quality, valuable, and sustainable jobs in communities like Crookston all across the country. As members of Congress are considering federal appropriations and future long-term transportation funding bills, they should remember the hard working Americans in communities of all sizes that depend on transit funding.  

Photo courtesy of New Flyer

Connecting Kansas City and the national economy with transit

During a recent briefing on Capitol Hill, a panel of different stakeholders including the mayor of Kansas City spoke about the important national impacts that local transit investments have. While the mayor was in Washington, DC, Erika Young from Smart Growth America took a trip to Kansas City to see the local impacts of the KC Streetcar.

Cities, states, and the federal government all have a stake in building a stronger, more resilient economy. It’s in pursuit of that goal that local and federal governments have partnered, pooling resources to build public transit systems across the country. These buses, trains, and ferries help spur local investment, support high-paying jobs around the country, and provide the foundation for robust regional, state, and national economies. Localities invest their own dollars, often raised through local taxes, expecting a reliable federal partner. They do so because, without transit, our nation’s economy would suffer. Everyone—locals, states, and the federal government—need to be at the table investing, together, in these important transportation systems; one entity can’t go it alone.

That’s the case with Kansas City, MO. In recent years, the city created new a ‘Transportation Development District’ to raise local funds for a streetcar, and used additional federal and state funding to build it. Known as the KC Streetcar, the line has spurred hundreds of millions of dollars of investment while supporting manufacturing jobs across the country. Recently, Kansas City Mayor Sly James came to Washington, DC to talk about the value of federal transit investments and their national impact with a panel of other stakeholders—a regional chamber of commerce, transit manufacturer, and transit agency. While Mayor James was on Capitol Hill making the economic case for transit, Smart Growth America’s Director of Strategic Partnerships, Erika Young, visited Kansas City to see the local impact first hand.

On the ground in Kansas City, MO

Long before the trains started rolling down the street, the Kansas City made extensive changes to the area around the Streetcar. They selected the route, augmented zoning around the line to allow more development, implemented fees for surface parking lots, and removed parking requirements for new homes and businesses. A special tax district was also implemented to capture some of the increased sales and property values that would occur due to the line and provide an ongoing funding source (more on that in this podcast). The city also received federal grants to help round out the funding for the KC Streetcar. All this upfront work set the stage for what happened next.

A new hotel under construction along the KC Streetcar route. (Image: Staff)

Magic. While the streetcar has only been up and running for a little over two years, it has transformed downtown with new hotels, businesses, and residences. The streetcar and the mobility and connections it provides—as is often the case with quality transit—were enough to spur this new development. While hundreds of millions of dollars have already been invested in new development along the line, as Erika learned, there’s even more construction planned. Surface parking lots are being transformed into economically productive places. Sixty percent of the riders on the streetcar ride it for work. This isn’t a fluke or an aberration. This streetcar and transit more broadly, is an important component to creating strong economies. While the local impacts of the streetcar are easy to see, the KC Streetcar has had national impacts on economies which are largely unseen, but no less important.

While Erika was on the ground in Kansas City (#SGAinKCMO), Kansas City’s mayor was back in Washington, DC talking about those economic impacts.

Meanwhile, on Capitol Hill…

Kansas City, MO Mayor Sly James joined a panel of business and transit professionals from around the country organized by Transportation for America to brief Congress members and their staff about the effects of federal transit investments. The panel included Alesha Washington from the Great Lakes Metro Chambers Coalition; Don Makarius from Kiel North America (a manufacturer of seats for public transit); and Bill Van Meter, Assistant General Manager of Planning at the Denver Regional Transportation District (RTD).

Even with their diverse backgrounds the panel spoke unanimously about the importance of federal funding that makes transit projects possible. Without a federal partner, public transit projects would stall, preventing cities and regions from realizing new private investments and affordable transportation options while starving transit manufacturers around the country of critical business opportunities.

Transportation for America’s Congressional briefing in the Capitol Building. (Image: Staff)

The Kansas City Streetcar, for example, received $37 million in federal grants. Mayor James, who championed the project throughout its planning and construction, emphasized that without a strong partnership with the federal government, Kansas City wouldn’t have achieved the level of success that it has seen along the streetcar route. The same is true for RTD in Denver where five of the past 11 major corridor projects in the area have received federal funding, according to panelist Bill Van Meter, who oversees project development at RTD.

The local and regional investments in public transit seen in Denver and Kansas City ripple outward to other cities and states through transit manufacturers like Kiel. Take RTD’s $678 million W light rail line, for which the agency received $308 million in federal New Starts funding, part of the Capital Investment Grant (CIG) program. As Van Meter explained, the agency spent almost $500 million on acquiring transit parts, materials, and supplies that were sourced from outside of Colorado. Businesses in 16 states produced everything from fiber optic cables to station furnishings.

For businesses that make parts for public transit systems, federal funding for transit projects ensures a regular, predictable stream of business that supports high-paying manufacturing jobs. At Kiel North America—headquartered in Elkhart, IN—almost 80 percent of their clients are public transit agencies receiving federal funding for their transit projects. Don Makarius, Kiel’s assistant chief operations officer, sees a clear connection between federal investment in transit and the long-term health of his business: “Without the federal funding that keeps cities’ public transit projects alive, we probably won’t be here long term.” The pipeline of transit projects in various stages of development awaiting federal grants includes approximately 50 projects in 19 states.

But the impact of the public transit supply chain goes beyond individual companies to affect entire regions. The Great Lakes region for example boasts more than 1,000 transit suppliers and manufacturers. “Strong federal investments in transportation are critical to economic success of the Great Lakes,” according to Alesha Washington from the Great Lakes Metro Chambers Coalition (a group of chambers from eight states). National public transportation investments are a big part of how the Great Lakes region will continue to grow and thrive.

From left to right: John Robert Smith, Transportation for America (moderator); Kansas City Mayor Sly James; Alesha Washington, Great Lakes Metro Chambers Coalition; Don Makarius, Kiel North America; Bill Van Meter, RTD (Image: Staff)

Transit manufacturing businesses, the jobs they support, the local transit investments being made across the country, and the economies they contribute too, all feed back into our national story. A strong Kansas City economy contributes to strong regional and state economies which in turn contribute to the national economy. As Mayor James noted, “if the idea is to have a vital vibrant economy, we have to produce jobs that people can get to, and public transportation is vital to that process.”

While the Trump administration has proposed eliminating critical sources of federal transit funding—like the BUILD Grants program (formerly known as TIGER) and the CIG program—and dramatically cutting other programs, Congress has so far rejected those proposals. We join our panelists in thanking members of Congress who have supported these programs, and will continue working to ensure that the federal government remains a strong partner with states and local governments as we build more transit.

Investing in transit fuels local economies across the country

Last week, we traveled to Indiana to bring Republican Rep. Jackie Walorski together with one of the 60 companies in her working-class district who build components for public transportation systems across the country, demonstrating how the public dollars devoted to transit support thousands of manufacturing jobs in communities all across the country.

Rep. Walorski, second from right, touring the floor at Kiel with Don Makarius, assistant chief operating officer for Kiel NA, second from left, and other Kiel managers. Photos courtesy of Rep. Walorski’s office.

At Transportation for America, we talk a lot about the nexus between federal investments in transit and economic prosperity. We do it because whenever federal transit dollars are leveraged with state and local funding to buy new buses, railcars or any component used by a public transit system, economies everywhere benefit, including in smaller towns and rural areas. And that means more jobs, more local tax revenue and more opportunity for communities—even those that may be the least served by public transit.

Last week, we brought Kiel North America together with their Congresswoman, U.S. Representative Jackie Walorski, to talk about the seats they produce in Elkhart, IN for interstate coaches, rail systems like BART in the Bay Area, and their growing business line for commuter buses that operate in larger metropolitan areas across the country.

Business is good in the ten counties that make up Indiana’s 2nd congressional district. Today, according to the Wall Street Journal, Elkhart city and the surrounding communities are experiencing labor shortages, rising home values and increased wages.

The local economy in Elkhart is dominated by RV (recreational vehicles) manufacturing, but Indiana’s 2nd district is also home to the highest concentration in the country of transit manufacturers and suppliers—at least 60—who produce everything from tracks, to seats, windows, communications equipment, wheels and everything else in between.

When large transit properties, like BART and others, are ready to buy, chances are good that Northwest Indiana is on the shopping list.

Nationwide, there are more than 2,700 transit manufacturers and suppliers, located in 49 states, employing more than 15,000 people. Last fall, Transportation for America examined the recent capital expenditures of four transit properties in San Francisco, Chicago, Denver and Portland and found that the capital outlays from just these four transit properties alone benefited communities in 21 states—communities like Elkhart.

View that full report here.

Continuing to make regular, predictable federal investments in transit will buttress local economies all across the country. The pipeline of transit projects in various stages of development awaiting federal grants for construction includes approximately 50 projects in 19 states. This pipeline means reliable business for the transit supply chain and allows companies to open specialized manufacturing facilities, keep workers employed, and have some measure of confidence that their business has the potential for more work in the future.

Kiel has about two-dozen employees today, but they believe they can triple the size of their workforce, given the opportunities already present in public transit marketplace. The pipeline of transit projects is a big deal to their future—the same pipeline that the Trump administration wants to pause indefinitely and eventually cancel entirely.

Thankfully, Congresswoman Walorski has become a champion for federally funded public transit investments. She led efforts in the House to fully fund the sole source of federal support for communities of any size that are expanding or improving public transportation service—new stations, new lines or improved capacity for rail or even bus rapid transit projects.

Her work, and that of her like-minded colleagues is finally paying off. Last month, Congress adopted and the president signed, the federal government’s FY18 spending plan that included $13.5 billion for public transit investments, including $2.6 billion for the transit Capital Investment Grant (CIG) program and $1.5 billion for the TIGER program, both important sources of funding for transit agencies that spend money in places like Elkhart.

All of this is very good news indeed, but the future is far from certain.

Last year, the Trump administration sought to severely reduce and phase out the transit capital program and to eliminate the TIGER program completely. The president’s FY19 budget recommendation seeks the same again. And there’s even a movement afoot by the president and some leadership in the House to potentially rescind portions of that budget deal, which could put transit funding back under the guillotine.

Without continued federal support, transit projects underway could stall, new or planned projects would be postponed or canceled, and transit agencies would scale back or cancel orders of new railcars or buses. The factories and suppliers—like Kiel—that produce or manufacture components for transit systems would have to downsize or shutter without a steady pipeline of projects.

Congress does not have to accept that future for Elkhart or any other community. We urge Congress to follow the lead of their colleague Rep. Walorski and others like her, by continuing to invest in the transit capital and TIGER programs. Maintain and expand funding for public transit investment so the Elkharts of America and thrive and grow.

Photo courtesy of Rep. Walorski’s office.