The federal government can’t neglect transit operations funds any longer

The most costly aspect of transit is funding its operations, and for decades this has fallen mainly on states and localities that are already struggling financially. The federal government has invested heavily in transit capital, but the big next steps are to improve efficiency and reliability by ensuring transit can function.

T4’s policies to invest in transit operations

In our platform for reauthorization, under our principle of Invest in the Rest, we aim to improve our transit efficiency and reliability to ensure better access to jobs, schools, and other imperative community resources. Establishing a dedicated federal stream of funding will support increases in transit service, including greater frequency, longer hours of service, and launching new service. Our proposal includes changes like:

• Allowing an 80 percent federal cost share for transit agencies in areas of persistent poverty.
• Redefining mobility improvement project justification based on improvements in access to jobs and essential services, and the congestion relief project justification based on whether projects allow transit users to avoid traffic congestion.

Why is there little investment in federal transit operations?

The United States has a history of building transit systems while neglecting transit operations funding. For the transit systems that remained after post-World War II urban sprawl, there was a large push from city governments to step in financially for transit operations. The federal government adopted the Urban Mass Transportation Act of 1964. The act authorized a large sum of funding and was the catalyst for the federal government to assist in transit capital projects and initiated the formation of the Federal Transit Administration.

Federal funding for capital projects increased, while transit agencies were in regular need of more operations assistance. Congress attempted to fill this gap by supplementing $4 billion in federal operating funds following the oil crisis in 1973 (also highlighting the importance of transit for addressing oil-dependency). The federal operations funding helped stabilize ridership and with the addition to the robust capital funds, other metropolitan areas were able to construct their own rail systems (MARTA and BART for example).

During the era of “Reaganomics”, there was a movement to limit the federal government’s role in local transportation issues, and specifically with operating funding. Although the Intermodal Surface Transportation Efficiency Act (ISTEA) and Transportation Equity Act of the 21st Century (TEA-21) both substantially supported transit, federal transit operating assistance had been eliminated. The following federal transit bills reflected this imbalance, allocating more funds to highways than transit and neglecting to adequately adjust operations funding for inflation.

Why feds should support transit operations

A transit operations budget typically includes funding for gasoline, overhead, and salaries for transit operators. For larger transit agencies, these funds are limited and are only supported through local and state funds such as sales taxes or ballot measures. A renewed federal investment in transit operations is essential, building on the precedent set in the 1970s, but scaled to meet today’s greater needs.

Robust, fully funded transit operations dramatically improve service, reliability and efficiency. Transit operations are the everyday costs that are incurred by transit agencies and when it is plentiful, service interruptions are less likely to occur. To improve frequency, agencies need enough operators behind the wheel. Competitive pay and better working conditions help attract and retain drivers, making frequent, reliable bus service a reality. Operations also go towards paying for fuel and vehicle maintenance. Proper maintenance and sufficient fuel ensure that transit vehicles remain reliable and capable of delivering consistent service. Establishing a funding stream specifically for transit operations is foundational to provide world-class services for communities.

Establish transit operations funding at the federal level

We cannot keep forcing states and localities to scrounge around for money to fund transit operations. The federal government has the ability and financial capacity to assist. Cost share (also known as a federal-match) is the portion of funds that is paid for by federal funds. By expanding the cost share to 80 percent from 50 percent, the federal government can assist in closing the funding gap and allow states to focus on providing high quality t services.

In the last couple of years, Representative Hank Johnson (GA) has made efforts to highlight the need for federal assistance with transit operations. His Stronger Communities Through Better Transit Act, originally introduced in 2024, would establish a federal program to provide operating‑support grants to public transportation agencies, enabling improved service in underserved communities. “Simply put, people could get to more places in less time using transit. Jobs, schools, and other daily destinations that previously took too long to reach would become more accessible,” Rep. Johnson said in a recent press release. “People would feel less strain on household budgets as their transportation costs shrink. They would have more time to spend with their families as time spent commuting falls.”

Looking ahead

Even modest federal investment in transit operations can be transformative—especially for communities struggling with limited or unreliable service. A $20 billion annual federal program, as envisioned by advocates, could increase transit service by up to 40 percent. This service increase could be monumental by allowing more people to commute to jobs easier, find greater economic opportunities, and navigate their communities in a safe and reliable way. Day-to-day operations are exactly where the federal government is offering the least amount of support. This reauthorization is a chance to fix that: to fund transit the right way and give states and communities the sustained operational support they urgently need.