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Transit funding in the infrastructure bill: what can it do for me?

The new infrastructure bill authorizes $109 billion to fund public transit projects through formula and competitive grant programs. Here’s what you need to know about the new money and (modest) policy changes to the transit program, as well as how you can make them work for you.

Bus stopping in front of a crosswalk filled with pedestrians
Photo by City of Minneapolis

The new infrastructure law is already pouring hundreds of billions of dollars into transportation projects and has created dozens of new USDOT grant programs that will advance hundreds of other projects. With this new law in place, T4America is empowering states and local communities to leverage this funding toward the best possible local projects. To that end, we’re embarking on a longer series of posts where we will be walking through specific topics like transit, climate, equity, rail, providing clear information about the law’s funding for that area, new grant programs, and how local officials and advocates alike can utilize the new funding to prioritize repair over expansion, improve access to jobs and services, and put safety over speed.  This first post is about transit. 

promo graphic for a guide to the IIJA

This post is part of a series of content T4America is producing to explain the new $1.2 trillion Infrastructure Investment and Jobs Act (IIJA), which now governs all federal transportation policy and funding through 2026. What do you need to know about the new infrastructure law?  We know that federal transportation policy can be intimidating and confusing. Our hub for this law will guide you through it, from the basics all the way to more complex details.

What’s in the law?

The first thing to know is that the infrastructure law failed to make any transformational changes to transit policy. (We covered this in #3 here.) Unlike the significant changes made to other areas, Congress carried forward the same old policy from the FAST Act, maintaining the status quo in which transit projects are subject to onerous oversight not required of highway projects. The second thing to know is that the law increased overall federal transit funding by 79%. This does not begin to address the full needs of transit in the U.S., but will allow numerous states and cities to make major investments in transit.

That funding is split between several programs. The largest share ($23 billion over five years) goes toward the core program for making capital improvements to expand or improve high capacity transit service. By comparison, the FAST Act spent $11.5 billion on this program, the Capital Investments Grant program (CIG). Notably, CIG money cannot be used to maintain or operate existing service. As defined by federal law, a “fixed guideway” for CIG projects is a means of public transit that operates on its own right-of-way, like a rail line, dedicated bus rapid transit line (bus lane), or even a ferry route. 

CIG grants are split into Small Starts (projects under $400 million, most often bus or bus rapid transit projects) and New Starts/Core Capacity (larger projects, where nearly all of the rail projects happen), and the two have different processes for funding approval. Under the previous infrastructure law, only projects that cost less than $300 million were eligible for Small Starts. The new infrastructure law increased that number to $400 million but left the maximum federal share of a project the same, at $150 million. This means local agencies with Small Starts projects that cost more than $300 million will need to come up with a higher percentage of local or state funds than in previous years.

While CIG funding cannot be used for repair projects, the infrastructure law increased funding for its State of Good Repair Formula Program from $13.4 billion in the FAST Act to $21.6 billion over five years. These non-competitive grants are distributed by USDOT to fixed guideway transit systems that are at least seven years old. So while transit agencies will not need to apply for funding, they will need to proactively identify repair needs to access this cash. There is also a new Rail Vehicle Competitive Grant program, funded for $1.5 billion over five years, aimed to help transit agencies leverage local/state/private financing to replace rail vehicles (think streetcars, subway rail, or light rail cars). The law also included $1.75 billion in competitive grant funding to help agencies meet Americans with Disabilities Act (ADA) accessibility standards, which can include repairs and upgrades to station elevators, boarding ramps, adequate support rails and signage, among other necessary services. USDOT has made clear that projects that engage with pertinent stakeholders and have community support will be best positioned to receive these competitive grant monies. 

In a minor but notable change, the law also strengthened reporting requirements to count all assaults on transit workers, a step in the right direction as transit operators continue to face rising rates of assault by transit riders.

How else could the administration improve the transit program?

Though Congress failed to make any real substantive changes to transit policy and instead locked the status quo in amber for another five years, Biden’s USDOT does have some leeway for interpreting and implementing this policy. For one, the Federal Transit Administration (FTA) could absolutely update their guidance for both formula and grant programs to more strongly emphasize that transit projects prioritize equitable access for all users (regardless of mobility challenges) and climate adaptation and resilience. Those who have been around for a few years will remember that FTA once rewarded transit capital projects “that tended to favor shorter travel times and longer distances between stops—rather than the number of people moved or the numbers of residents with access to reliable transit service.” This resulted in projects that moved suburban commuters quickly through a city but failed to improve transit access in order to score high in FTA’s cost-effectiveness criteria. But this is the kind of guidance that FTA and USDOT have the latitude to change.

Furthermore, FTA project guidance can place higher value on projects that have supportive land uses and facilitate first- and last-mile connections to transit, inclusive of shared micromobility.

How can the new money advance our goals?

Overall, assessing the transit needs of your community will be the best way to find and utilize the right funding sources. Advocates should work with transit agencies to pursue and develop the plans and projects that would best serve marginalized communities and improve the state of repair, and then work with the agencies to finalize plans to submit for capital funding. Here’s how this funding could be used to advance transit-related equity and climate goals.

Equity: As mentioned above, expanding and improving transit is the best way to serve and improve access in marginalized, underserved communities. But if these investments are directed to the wrong projects, they can instead reinforce racist land-use decisions (like those of “urban renewal”). Transit investments need to shift away from “development potential” and instead be meticulously planned around serving the people already living in the communities in question. Follow the people! Planners, transit agencies, and all stakeholders should direct their projects toward improving accessibility, connecting people not only along commute corridors, but to food, parks, shopping, health services, and other services. As we have seen during the COVID-19 pandemic, the people who most need transit are not served by the commuter-centric model present in most American cities.

Climate: The infrastructure law is not the climate legislation that the Biden administration billed it to be. The new transit money should be spent to give as many people as possible greater access to high quality transit, helping to keep the growth of emissions and vehicle miles traveled in check.  Doing so will be incredibly important considering the historic amount that Congress also provided for new highway spending in the infrastructure law. Cities can focus on electrification of projects using known technologies we can implement today (wires, limited range batteries), rather than holding out for expensive or nonexistent technologies to become widespread. Cities also should look at ways to better quantify and qualify the impact that transit projects can have on climate change (such as highlighting induced demand on roadways without the transit project).

So what?

For local transportation officials who have an interest in expanding and improving transit service, the overall increase in transit funding means that more projects will get funded, allowing you to push through projects that have stalled out due to a lack of funding. For cities in transit-unfriendly states, those state DOTs will need to spend the additional transit formula money anyway (which is inclusive of operating and capital repair dollars), so if cities approach them with detailed transit plans and projects that have community support, the state will find these projects hard to turn down. For competitive grants, knowing the intricacies of grant eligibility and USDOT’s selection criteria will make your applications that much stronger. 

For advocates and concerned citizens, the next time your local transportation officials say they don’t have enough money for critical vehicle repairs or equitable network expansion, you can point them to specific formula and competitive grants, as well as the eligibility criteria to prove that your project can receive that funding. 

One last important note we addressed in our competitive grants blog post: Strong local matching funds (ranging from 20 to 50 percent  of project cost) are critical to winning these grants, and the process to raise these funds starts by engaging in state and local budget processes far in advance (6-9 months before the start of the fiscal year.) So advocates, this means you should engage agencies early and often on resource prioritization to realize transit projects.

Note: There are ample opportunities for the infrastructure law to support good projects and better outcomes. We also produced memos to explain the available federal programs for funding various types of projects. Read our memos about available funding opportunities for transit capital and operating projects. In conjunction with TransitCenter and the National Campaign for Transit Justice, we also produced a table of transit funding opportunities. View that table here.

If you have additional ideas for how to utilize these expanded programs, or have questions about the content listed here, please contact us. Our policy staff is eager to hear from you.