Fixing the fleet and backlog: World-Class American Transit

Agencies can’t just buy thousands of new railcars and buses without a plan to maintain them—major capital expenditures require proportional, consistent investment in maintenance to prevent the depreciation of public assets and to avoid adding to the maintenance backlog. This means that maintenance spending would need to increase to account for both the increased frequency of service on existing routes and the maintenance of new assets acquired through expanded capital spending.

To keep pace with spending on operating new services, an additional $297 billion would need to be spent on maintaining the new assets acquired in this scenario. This projection is based on historic ratios of spending on maintenance relative to operating expenses, which typically equal 30 percent of operating costs.

Repair costs: Addressing the deferred maintenance backlog

We also accounted for the costs to fix existing assets in disrepair. The U.S. Department of Transportation’s (USDOT) Conditions and Performance (C&P) report analyzes the nation’s existing infrastructure assets and investments required to expand and maintain them. Specifically, the latest C&P report, which produced estimates using 2018 data, found that U.S. transit infrastructure had a deferred maintenance backlog of over $100 billion. The report estimated that between 2018 and 2038, more than $20 billion would need to be dedicated to maintenance to eliminate this backlog. Accounting for inflation, a more recent analysis from FTA found that the value of this backlog grew to over $140 billion in 2022. Adjusting the 25th edition C&P report’s figures for inflation since its publication, we will need to spend an average of $5.4 billion over baseline levels for a 20-year period to address the historic underinvestment in existing transit systems’ state of good repair, constituting a 20-year investment of $106 billion to eliminate transit’s deferred maintenance backlog.

Assumptions

Between 2005 and 2023, annual maintenance costs have generally tracked with operations, ranging from 22.8 to 31.7 percent of total operations costs. Over that time, maintenance costs averaged 27.6 percent of total expenditures. For our purposes, we assume that new maintenance costs over baseline levels would be 30 percent of new operations expenditures, slightly above previous year averages. Baseline maintenance costs are extrapolated from a linear forecast of 2005-2023 maintenance costs.