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United States Government Accountability Office: 
GAO: 

Report to the Committee on Banking, Housing, and Urban Affairs, U.S. 
Senate: 

November 2010: 

Public Transportation: 

Transit Agencies' Actions to Address Increased Ridership Demand and 
Options to Help Meet Future Demand: 

Public Transportation: 

GAO-11-94: 

GAO Highlights: 

Highlights of GAO-11-94, a report to the Committee on Banking, 
Housing, and Urban Affairs, U.S. Senate. 

Why GAO Did This Study: 

Demand for public transportation in the United States reached record 
highs in 2008 and rose in the decade prior to 2008. Increased demand 
for public transportation can create opportunities and challenges for 
communities working to meet demand, improve service, and maintain 
transit systems, while operating within budgetary constraints. Transit 
agencies rely on a variety of funding sources, including federal, 
state, and local entities, and other sources, such as fares. The U.S. 
Department of Transportation’s (DOT) Federal Transit Administration 
administers federal grant programs transit agencies can use to help 
meet ridership demand, such as for purchasing buses and modernizing 
rail systems. 

As requested, this report addresses (1) trends in transit ridership 
and services from 1998 through 2008, (2) challenges, if any, transit 
agencies faced during this period to address increased ridership and 
actions they took in response, and (3) factors that might affect 
future ridership demand and the ability of transit agencies to meet 
that demand. GAO analyzed data from the National Transit Database on 
transit ridership (i.e., passenger miles traveled), service (i.e., 
vehicle revenue miles), costs, and revenues; conducted interviews with 
15 transit agencies operating heavy rail, light rail, and bus; 
interviewed federal officials and others; and reviewed prior GAO 
recommendations. 

DOT generally agreed with the report and provided technical comments. 

What GAO Found: 

From 1998 through 2008, the most recent year for which complete data 
are available, transit ridership grew at a faster rate than transit 
service. Heavy rail experienced the greatest difference between growth 
in ridership and service compared with light rail or bus—heavy rail 
ridership outpaced the provision of service by about 18 percentage 
points during this period. Transit agency costs and revenues also 
increased overall from 1998 through 2008, but the relative shares of 
revenue sources changed. The share of federal funding remained steady 
while increases in state and local funding shares offset declines in 
the share of funding from other sources, such as passenger fares. In 
addition, in 1998 the federal government was the largest source of 
capital investment in transit; by 2008 local government provided the 
largest share. 

From 1998 through 2008, transit agencies faced challenges and took 
actions to address increased ridership demand. Specifically, agencies 
faced capacity constraints, including limitations of their vehicles 
(e.g., too few rail cars and buses) and their system infrastructure 
(e.g., platforms that were too short to accommodate longer trains). 
Transit agencies took steps to respond to increased demand, including: 
adjusting their service by modifying routes, fares, and hours of 
service; making new system investments, such as expanding fleets and 
extending platforms; and maintaining and updating existing 
infrastructure and vehicles. For example, New York City transit 
officials improved the signaling in their heavy rail system to 
increase frequency of service. Agencies experienced varying degrees of 
success in responding to increases in demand—some reported 
accommodating increases in ridership while others’ success was 
limited. For example, a light rail agency reported that its service 
area did not keep pace with real estate development, and a bus agency 
turned away riders. 

Population growth and other factors are likely to increase future 
ridership demand, but cost increases and fiscal uncertainties could 
limit transit agencies’ ability to meet this demand. Transit agency 
officials expressed concern about meeting future increases in 
ridership due to increased costs of expanding transit systems and 
maintaining aging infrastructure. Also, transit agencies’ funding has 
been strained since 2008, as state and local funding has decreased 
with the economic downturn. This is significant because transit 
agencies previously relied on increases in state and local funding 
shares to offset decreases in other sources. Given this environment, 
along with fiscal difficulties facing the nation, it will be a 
challenge to effectively focus limited resources to maximize the 
positive effect on transit agencies’ services. GAO and others have 
made recommendations to DOT, Congress, and others on options that 
could more effectively deliver federal surface transportation programs 
and help transit agencies address growing ridership. These options are 
under consideration and include: focusing resources on state of good 
repair, streamlining the delivery of federal grant programs, and 
incorporating performance accountability measures to maximize the 
impact of investments. 

View [hyperlink, http://www.gao.gov/products/GAO-11-94] or key 
components. For more information, contact David Wise at (202) 512-5731 
or wised@gao.gov. 

[End of section] 

Contents: 

Letter: 

Background: 

Transit Ridership Grew at a Faster Rate Than Service and Funding 
Sources Changed: 

Agencies Faced Challenges and Responded by Adjusting Service, Making 
New System Investments, and Maintaining Their Existing Systems: 

Demographic Changes Point to Future Increases in Ridership Demand, but 
Cost Increases and Fiscal Uncertainties May Limit Agencies' Ability to 
Meet Demand: 

Agency Comments: 

Appendix I: Objectives, Scope, and Methodology: 

Appendix II: Analyzing the Effect of New York City on National Transit 
Trends: 

Appendix III: GAO Contact and Staff Acknowledgments: 

Tables: 

Table 1: Select Federal Transit and Transit-Related Programs: 

Table 2: Examples of Transit Infrastructure-related Challenges, 1998- 
2008: 

Table 3: Examples of Actions Taken by Transit Agencies to Meet Demand, 
1998-2008: 

Table 4: Site Visit Interviews: 

Table 5: Transit Agency Interviews: 

Table 6: Growth in Service Output and Service Use, 1998-2008: United 
States National Trends and New York City: 

Table 7: Growth in Operating Costs by Function and Mode, 1998-2008: 
United States National Trends and New York City: 

Table 8: Growth in Capital Costs by Function and Mode, 1998-2008: 
United States National Trends and New York City: 

Table 9: United States Percentage of Total Funding for Operating and 
Capital Expenditure Combined by Source: 

Table 10: United States, Except New York City, Percentage of Total 
Funding for Operating and Capital Expenditure Combined by Source: 

Table 11: New York City, Percentage of Total Funding for Operating and 
Capital Expenditure Combined by Source: 

Table 12: All United States, Percentage of Total Funding for Operating 
Expenditure by Source: 

Table 13: All United States, Except New York City, Percentage of Total 
Funding for Operating Expenditure by Source: 

Table 14: New York City, Percentage of Total Funding for Operating 
Expenditure by Source: 

Table 15: United States Percentage of Total Funding for Capital 
Expenditure by Source: 

Table 16: United States Except, New York City, Percentage of Total 
Funding for Capital Expenditure by Source: 

Table 17: New York City, Percentage of Total Funding for Capital 
Expenditure by Source: 

Table 18: Unlinked Passenger Trips in 2008: United States Compared 
with New York City: 

Table 19: Vehicle Revenue Miles in 2008: United States Compared with 
New York City: 

Figures: 

Figure 1: Passenger Miles Traveled by Mode, 1998-2008: 

Figure 2: Vehicle Revenue Miles by Mode, 1998-2008: 

Figure 3: Total Transit Funding Sources, 1998 and 2008: 

Figure 4: Transit Funding Sources--Operating, 1998 and 2008: 

Figure 5: Transit Funding Sources--Capital, 1998 and 2008: 

Abbreviations: 

CMAQ: Congestion Mitigation and Air Quality Improvement Program: 

DOT: Department of Transportation: 

FHWA: Federal Highway Administration: 

FTA: Federal Transit Administration: 

MTA: Metropolitan Transportation Authority: 

NEPA: National Environmental Policy Act of 1969: 

NHTSA: National Highway Traffic Safety Administration: 

NTD: National Transit Database: 

PMT: passenger miles traveled: 

Recovery Act: American Recovery and Reinvestment Act of 2009: 

SAFETEA-LU: Safe, Accountable, Flexible, Efficient Transportation 
Equity Act: A Legacy for Users: 

UPT: unlinked passenger trip: 

VRH: vehicle revenue hour: 

VRM: vehicle revenue mile: 

[End of section] 

United States Government Accountability Office: 
Washington, DC 20548: 

November 30, 2010: 

The Honorable Christopher J. Dodd:
Chairman:
The Honorable Richard C. Shelby:
Ranking Member:
Committee on Banking, Housing, and Urban Affairs:
United States Senate: 

Demand for public transportation in the United States reached record 
highs in 2008 and rose in the decade prior to 2008. From 1998 through 
2008, the growth in public transportation ridership exceeded overall 
population growth and outpaced the growth of vehicle miles traveled on 
the nation's highways. While transit ridership has decreased since 
2008, in part because of high unemployment and other factors related 
to the recession, population and demographic trends indicate that 
demand for public transit will grow in the years to come. Increased 
demand for public transportation can create opportunities and 
challenges for communities working to accommodate demand, improve 
services, and properly maintain their systems within budgetary 
constraints. 

As demand for transit services has grown over time, so has the federal 
government's overall investment in public transportation. Transit 
agencies rely on federal funding to meet a substantial amount of their 
capital investment and other needs. A variety of other funding sources 
also support the provision of transit services, including assistance 
from state and local entities, and sources such as passenger fares. To 
assist transit agencies, the Federal Transit Administration (FTA) 
within the Department of Transportation (DOT) administers a variety of 
federal grant programs that can be used to help meet ridership demand, 
such as grants for purchasing buses and modernizing rail systems. The 
funding for these programs is currently authorized by an extension to 
the Safe, Accountable, Flexible, Efficient Transportation Equity Act: 
A Legacy for Users (SAFETEA-LU), which expired in September 2009 and 
is due to be reauthorized.[Footnote 1] In preparation for 
reauthorization, you asked us to review how transit agencies are 
responding to increased passenger demand. Accordingly, this report 
addresses (1) trends in transit ridership and services from 1998 
through 2008; (2) challenges, if any, that transit agencies faced 
during this period to address increased ridership and actions they 
took in response; and (3) factors that might affect future ridership 
demand and the ability of transit agencies to meet that demand. Unless 
otherwise noted, for the purposes of this review, we have focused on 
transit agencies that operate heavy rail, light rail, and bus 
services.[Footnote 2] These modes represent approximately 92 percent 
of the overall public transit market. 

To describe the trends in the transit industry's ridership, services, 
costs, and revenues from 1998 through 2008, we examined data from 
FTA's National Transit Database (NTD).[Footnote 3] We examined NTD 
data for all reporting agencies from 1998 through 2008 and conducted 
more detailed analyses by mode (for agencies operating heavy rail, 
light rail, and bus services).[Footnote 4] We used NTD data to 
determine trends in the transit industry's ridership (measured by 
passenger miles traveled (PMT)--or the cumulative sum of the distances 
ridden by each passenger), supply of services (measured by vehicle 
revenue miles (VRM)--that is, miles a transit vehicle travels while 
carrying passengers), costs, and revenues. We chose to analyze NTD 
data from 1998 through 2008 because they provided a comprehensive and 
detailed dataset containing the variables we included in the analysis. 
Data from 2008 were the most current available data on these variables 
when we conducted our review. In reviewing NTD data, we determined 
that they were reliable for our purposes. Appendix I contains a more 
detailed discussion of our data reliability assessment. To identify 
challenges transit agencies faced and actions they took to address 
increased ridership, we conducted semistructured interviews with 
officials from 15 selected transit agencies in urbanized areas. 
[Footnote 5] We based our selection of these transit agencies on the 
type of transportation services provided (heavy rail, light rail, or 
bus), growth in passenger trips from 1998 through 2008, geographic 
dispersion, and size. Of the 15 selected transit agencies, we visited 
three (one with each type of service--heavy rail, light rail, and bus) 
to conduct in-person interviews with representatives of the transit 
agencies, local governments, metropolitan planning organizations, the 
business community, advocacy groups, and others. We conducted in-depth 
telephone interviews with officials of the remaining 12 transit 
agencies. To identify what factors might affect future ridership 
demand and the ability of transit agencies to meet that demand, we 
reviewed relevant literature and interviewed transit agency and FTA 
officials, transportation researchers, and industry and advocacy 
groups. Appendix I contains a more detailed discussion of our 
objectives, scope, and methodology. 

We conducted this performance audit from December 2009 through 
November 2010 in accordance with generally accepted government 
auditing standards. Those standards require that we plan and perform 
the audit to obtain sufficient, appropriate evidence to provide a 
reasonable basis for our findings and conclusions based on our audit 
objectives. We believe that the evidence obtained provides a 
reasonable basis for our findings and conclusions based on our audit 
objectives. 

Background: 

In 2008, Americans took an estimated 10.4 billion trips on public 
transit, the highest ridership in over 50 years. More recently, 
however, transit ridership has experienced a decline in line with the 
current economic downturn. While use of public transit has generally 
grown over time, driving remains the primary travel mode choice for 
most Americans. Specifically, in 2008, 86 percent of commute trips to 
work were made by private vehicle and 5 percent were made by public 
transit.[Footnote 6] Driving, as measured by national vehicle miles 
traveled, dropped in 2008 for the first time in 28 years, in part, due 
to the downturn in the economy and high gasoline prices, before 
beginning to grow again in 2009. 

A variety of factors can affect the demand for public transit 
services, including: 

* Population and demographics. According to the U.S. Census Bureau, 
from 2000 through 2009, the U.S. population grew by an estimated 9 
percent, reaching more than 300 million. Longer life spans, a stable 
fertility rate, and immigration are among the contributing factors to 
this growth. The population aged 65 and over is estimated to have 
reached 40 million this year and this number is expected to continue 
growing as "baby boomers" age. During the past decade, the total 
fertility rate has remained stable, while the foreign-born population 
has increased due to immigration. In addition, in the past century, 
metropolitan areas, including central cities and suburbs, have 
experienced significant growth in population, with city suburbs 
growing more rapidly than central cities. In 2009, an estimated 84 
percent of the U.S. population lived in metropolitan areas as compared 
with only 69 percent in 1970. Increases in the U.S. population, 
including increases in the population aged 65 and over, can increase 
the need for transportation options, including demand for public 
transit. 

* Employment and the economy. Similarly, employment rates and the 
state of the economy can affect the travel choices of Americans and 
their use of public transit. During the past decade, there were two 
economic recessions beginning in 2001 and 2007, respectively. The 2007 
recession was accompanied by high levels of unemployment and 
subsequent decreases in transit ridership. For example, according to 
the U.S. Bureau of Labor Statistics, during the 2007 recession, 
unemployment rose from 5 percent in January 2008 to 10.1 percent in 
October 2009, and has only edged down slightly to 9.6 percent by 
September 2010. This increase in unemployment has been accompanied by 
a decrease in transit ridership, with ridership decreasing by about 4 
percent in 2009 and about 3 percent in the first quarter of 2010. 

* Gasoline prices. The public's reaction to increases in gasoline 
prices can also affect the demand for public transit.[Footnote 7] 
During the last decade, gasoline prices increased dramatically before 
falling again.[Footnote 8] After the average price of gasoline peaked 
at more than $4 per gallon in June and July of 2008, the price began 
to rapidly drop. The average price of gasoline for 2009 was $2.35 per 
gallon as compared with $3.27 for 2008. Following the increase in 
gasoline prices in 2008, transit ridership reached record highs, 
before eventually declining in 2009. 

Federal, state, and local investment in transit has grown over the 
years, resulting in the expansion of the nation's public transit 
systems. FTA works in partnership with states and local grant 
recipients, such as transit agencies, to administer federal transit 
programs, and to provide financial, technical, and other assistance. 
Transit agencies also rely on a variety of other funding sources to 
help provide service, including assistance from state and local 
entities, and other sources such as passenger fares.[Footnote 9] State 
and local governments are ultimately responsible for executing most 
federal transit programs by matching and distributing federal funding 
and by planning, selecting, and supervising infrastructure projects in 
accordance with federal requirements. In addition, in some cases, 
financial assistance programs administered by the Federal Highway 
Administration (FHWA), or jointly administered by FHWA and FTA, can 
also be used to support transit agencies. For example, the Congestion 
Mitigation and Air Quality Improvement Program (CMAQ), which is 
jointly administered by FHWA and FTA, provides assistance to states 
for eligible transportation projects or programs that improve air 
quality and reduce congestion.[Footnote 10] States also have 
flexibility to transfer a limited amount of funds from other highway 
programs to assist transit programs, as in the case of CMAQ funds. 
[Footnote 11] The funding for these programs is authorized by SAFETEA-
LU, which was enacted in August 2005 and expired in September 2009. 
[Footnote 12] While it has yet to be reauthorized, SAFETEA-LU has been 
extended several times and the most recent extension will expire on 
December 31, 2010.[Footnote 13] Table 1 summarizes select federal 
transit and transit-related grant programs. 

Table 1: Select Federal Transit and Transit-Related Programs: 

FTA programs: Urbanized Area Formula Program; (49 U.S.C. § 5307); 
Summary of programs: Capital assistance[A] and transportation-related 
planning for urbanized areas[B] and operating assistance[C] for use in 
public transportation if certain eligibility criteria are met, among 
other things. Eligible uses include capital investments in bus and bus-
related activities, and capital investments in new and existing fixed 
guideway[D] systems. Funds are allocated based on a multitiered 
formula. 

FTA programs: Fixed Guideway Modernization Program (49 U.S.C. § 5309); 
Summary of programs: Capital assistance to modernize or improve 
existing fixed guideway systems, including the purchase and 
rehabilitation of vehicles, maintenance facilities, and equipment, and 
preventive maintenance. Funds are allocated based on a multitiered 
formula. 

FTA programs: Bus and Bus Facility Grant Program (49 U.S.C. §§ 5309, 
5318); 
Summary of programs: Capital assistance for new and replacement buses, 
related equipment, and facilities. Funding is discretionary. 

FTA programs: Capital Investment Grants - "New and Small Starts" (49 
U.S.C. § 5309); 
Summary of programs: Capital assistance for the construction of new 
fixed guideway systems or extensions to existing fixed guideway 
systems or corridor-based bus systems. Funds are allocated on a 
discretionary basis based on recommendations made by FTA. 

FTA programs: Metropolitan and Statewide Planning Programs (49 U.S.C. 
§§ 5303, 5304, 5305); 
Summary of programs: Planning assistance, including activities that 
increase the safety and security of the transportation system and 
protect and enhance the environment. Funding is provided to state 
departments of transportation and then allocated to metropolitan 
planning organizations. 

Source: GAO summary of FTA and FHWA program information. 

[A] According to the NTD, capital expenses include the following 
categories: revenue vehicles, guideway, communication and information 
systems, fare revenue collection equipment, maintenance facilities, 
passenger stations, administration buildings, service (nonrevenue) 
vehicles, and other (including passenger shelters, signs and 
amenities, and furniture and equipment that are not integral parts of 
buildings and structures). 

[B] Urbanized areas are areas encompassing a population of not less 
than 50,000 people that have been defined and designated in the most 
recent decennial census as an "urbanized area" by the Secretary of 
Commerce. 49 U.S.C. § 5302(a)(17). 

[C] The NTD defines operating expenses as those expenses incurred by 
transit agencies that are associated with operating mass 
transportation services (i.e., vehicle operations, maintenance, and 
administration). 

[D] A "fixed guideway" refers to any public transportation facility 
using and occupying a separate right-of-way or rail for the exclusive 
use of public transportation and other high-occupancy vehicles; or 
using a fixed catenary system (i.e., overhead lines) and a right-of-
way usable by other forms of transportation. 49 U.S.C. § 5302(a)(4). 
The term includes heavy rail, commuter rail, light rail, monorail, 
trolleybus, aerial tramway, inclined plane, cable car, automated 
guideway transit, ferryboats, that portion of motor bus service 
operated on exclusive or controlled rights-of-way, and high-occupancy- 
vehicle lanes. 

[End of table] 

Transit Ridership Grew at a Faster Rate Than Service and Funding 
Sources Changed: 

Transit Ridership Grew at a Faster Rate Than Service from 1998 through 
2008: 

From 1998 through 2008, transit ridership for agencies offering heavy 
rail, light rail, and bus services grew more than 28 percent. During 
the same period, transit service grew approximately 20 percent. 

Transit Ridership Increased by Over 28 Percent: 

Transit ridership increased overall by over 28 percent from 1998 
through 2008, as measured by passenger miles traveled (PMT).[Footnote 
14] By mode, light rail ridership grew at a faster rate than heavy 
rail or bus. The high ridership growth for light rail may reflect the 
increase in the number of light rail systems in operation during the 
time period. As shown in figure 1, light rail ridership increased by 
nearly 87 percent (from 1.12 billion to 2.08 billion passenger miles), 
heavy rail ridership increased by about 37 percent (from 12.3 billion 
to 16.8 billion passenger miles), and bus ridership increased by about 
19 percent (from 17.9 billion to 21.2 billion passenger miles). 
[Footnote 15] 

Figure 1: Passenger Miles Traveled by Mode, 1998-2008: 

[Refer to PDF for image: multiple line graph] 

Year: 1998; 
Heavy rail: 12.3 billion; 
Light rail: 17.9 billion; 
Bus: 1.12 billion. 

Year: 1999; 
Heavy rail: 12.9 billion; 
Light rail: 18.7 billion; 
Bus: 1.19 billion. 

Year: 2000; 
Heavy rail: 13.8 billion; 
Light rail: 18.8 billion; 
Bus: 1.34 billion. 

Year: 2001; 
Heavy rail: 14.2 billion; 
Light rail: 19.6 billion; 
Bus: 1.43 billion. 

Year: 2002; 
Heavy rail: 13.7 billion; 
Light rail: 19.7 billion; 
Bus: 1.43 billion. 

Year: 2003; 
Heavy rail: 13.6 billion; 
Light rail: 19.2 billion; 
Bus: 1.48 billion. 

Year: 2004; 
Heavy rail: 14.4 billion; 
Light rail: 18.9 billion; 
Bus: 1.58 billion. 

Year: 2005; 
Heavy rail: 14.4 billion; 
Light rail: 19.4 billion; 
Bus: 1.7 billion. 

Year: 2006; 
Heavy rail: 14.7 billion; 
Light rail: 20.4 billion; 
Bus: 1.87 billion. 

Year: 2007; 
Heavy rail: 16.1 billion; 
Light rail: 20.4 billion; 
Bus: 1.93 billion. 

Year: 2008; 
Heavy rail: 16.8 billion; 
Light rail: 21.2 billion; 
Bus: 2.08 billion. 

Change, 1998-2008: 
Heavy rail: 37%; 
Light rail: 19%; 
Bus: 87%. 

Source: GAO analysis of FTA NTD data. 

[End of figure] 

According to officials at the transit agencies we contacted, a number 
of factors contributed to ridership increases from 1998 through 2008, 
including population increases, periods of growth in employment, and 
increases in gasoline and parking prices. In addition, some agency 
officials reported taking actions they believe attracted new riders, 
such as expanding and enhancing their systems, adding new service, 
forming local partnerships, and launching marketing campaigns to 
increase ridership. For example, the Ann Arbor Transportation 
Authority, which provides bus service to Ann Arbor, Michigan, and 
surrounding areas, entered into partnerships with employers, including 
the University of Michigan, to subsidize students' and employees' 
transit costs. According to officials from the Ann Arbor 
Transportation Authority, the University of Michigan, and 
representatives from the business community, these partnerships helped 
to generate significant ridership growth in the city of Ann Arbor. 

Transit Service Increased by About 20 Percent: 

The availability of transit service also increased steadily for heavy 
rail, light rail, and bus agencies, with vehicle revenue miles (VRM) 
increasing by approximately 20 percent from 1998 through 2008. 
[Footnote 16] Consistent with trends in ridership by mode, the supply 
of light rail service grew faster than heavy rail or bus services, 
which may reflect, in part, the increase in the number of light rail 
systems during the time period. As shown in figure 2, VRMs increased 
by 104 percent for light rail (from 42 million to 86 million miles), 
as compared with about 19 percent for heavy rail (from 549 million to 
655 million miles) and 18 percent for agencies providing bus services 
(from 1.652 billion to 1.956 billion miles). 

Figure 2: Vehicle Revenue Miles by Mode, 1998-2008: 

[Refer to PDF for image: multiple line graph] 

Year: 1998; 
Light rail: $1.65 billion; 
Heavy rail: $549 million; 
Bus: $42 million. 

Year: 1999; 
Light rail: $1.72 billion; 
Heavy rail: $561 million; 
Bus: $47 million. 

Year: 2000; 
Light rail: $1.76 billion; 
Heavy rail: $578 million; 
Bus: $51 million. 

Year: 2001; 
Light rail: $1.82 billion; 
Heavy rail: $591 million; 
Bus: $53 million. 

Year: 2002; 
Light rail: $1.87 billion; 
Heavy rail: $603 million; 
Bus: $60 million. 

Year: 2003; 
Light rail: $1.88 billion; 
Heavy rail: $612 million; 
Bus: $64 million. 

Year: 2004; 
Light rail: $1.89 billion; 
Heavy rail: $625 million; 
Bus: $67 million. 

Year: 2005; 
Light rail: $1.88 billion; 
Heavy rail: $629 million; 
Bus: $68 million. 

Year: 2006; 
Light rail: $1.91 billion; 
Heavy rail: $634 million; 
Bus: $73 million. 

Year: 2007; 
Light rail: $1.93 billion; 
Heavy rail: $638 million; 
Bus: $82 million. 

Year: 2008; 
Light rail: $1.96 billion; 
Heavy rail: $655 million; 
Bus: $86 million. 

Change, 1998-2008: 
Light rail: 18%; 
Heavy rail: 19%; 
Bus: 104%. 

Source: GAO analysis of FTA NTD data. 

[End of figure] 

The relationship between transit ridership and service varied by mode. 
For example, heavy rail experienced the greatest discrepancy in 
ridership and supply of services from 1998 through 2008 compared with 
light rail or bus. Ridership outpaced the provision of heavy rail 
service by about 18 percentage points (specifically, ridership for 
heavy rail increased by about 37 percent while the provision of heavy 
rail service increased by about 19 percent). For agencies offering bus 
services, ridership generally seemed to keep pace with the supply of 
services during the same period (19 percent as compared with 18 
percent growth). Transit agency officials with whom we spoke noted 
that bus systems can typically respond more quickly to increases in 
ridership demand, while heavy rail agencies face more challenges due 
to the capital-intensive nature of their systems and the financial 
investment required to increase heavy rail service. However, the 
availability of light rail service actually grew faster than ridership 
demand, partly due to light rail systems expanding during this time 
period. Specifically, light rail service grew by over 100 percent 
while ridership grew by about 87 percent from 1998 through 2008. 

For passengers, the disparity between ridership growth and service 
points to several potential effects. Passengers using transit systems 
with enough capacity to accommodate increases in ridership may 
experience a better utilized system. However, they may also experience 
a system that, while better utilized, has become more crowded. For 
passengers using transit systems without the capacity to accommodate 
increases in ridership, they may have experienced an overcrowded 
system that left passengers on the platform or curb during periods of 
high demand. According to officials at the transit agencies we 
contacted, agencies experienced varying degrees of success in 
responding to ridership growth from 1998 through 2008. 

Transit Agencies' Costs and Revenues Increased from 1998 through 2008, 
and the Share of Funding Sources Changed: 

While providing additional service, transit agency costs, including 
operating and capital expenses, increased from 1998 through 2008, as 
did transit agency revenues.[Footnote 17] However, while revenues 
increased overall, the share of funding sources changed; the share of 
federal funding remained steady while increases in state and local 
funding shares essentially offset declines in the share of funding 
from other sources, such as passenger fares.[Footnote 18] 

Costs and Revenues: 

Increases in ridership and service from 1998 through 2008 were 
accompanied by increases in overall costs to provide transit service. 
Total costs, which include operating and capital expenses, for transit 
agencies offering heavy rail, light rail, and bus services increased 
by about 46 percent. While both capital and operating expenses grew, 
capital expenses grew at a faster rate than operating expenses for 
agencies during this period. Specifically, capital expenses grew by 
about 68 percent[Footnote 19] while operating expenses increased by 
over 36 percent from 1998 to 2008.[Footnote 20] The increase in 
capital expenses reflects, in part, the financial investment in heavy 
rail and light rail systems. The increase in operating costs was most 
noticeable for light rail systems likely due, in part, to increases in 
light rail service over the time period studied. 

Similarly, transit agency revenues[Footnote 21] increased by more than 
48 percent from 1998 through 2008.[Footnote 22] Revenue sources 
include federal, state, local, and other funding sources, such as 
passenger fares. While overall transit revenues increased, the share 
of funding sources changed. As shown in figure 3, as a percentage of 
total revenues, the share of federal funding remained steady at about 
17 percent. The shares of state and local funding increased (from 
about 18 to 22 percent and 32 to 35 percent, respectively), while the 
share of funds from other sources, such as passenger fares, decreased 
(from 34 percent to 26 percent). Increases in the share of state and 
local funding essentially offset declines in the share of funding from 
other nonfederal funding sources, such as passenger fares, from 1998 
through 2008. For example, those transit systems that had to add 
service to accommodate growing ridership during this period, and 
finance the associated costs, likely used state and local funding to 
supplement decreases in other funding sources, including passenger 
fares. Since fares collected from passengers typically do not cover 
the full cost of their transit trips, these agencies essentially 
experienced a widening gap between passenger fare revenue and costs as 
ridership increased. This gap can significantly limit the ability of 
transit agencies to increase transit service in response to rising 
demand. In almost all cases, expanding transit service would require 
securing additional funding to bridge this gap. 

Figure 3: Total Transit Funding Sources, 1998 and 2008: 

[Refer to PDF for image: 2 pie-charts] 

1998: 
Federal: 17%; 
State: 18%; 
Local: 32%; 
Other: 34%. 

2008: 
Federal: 17% (no change from 1998); 
State: 22% (+4 percentage points since 1998); 
Local: 35% (+3 percentage points since 1998); 
Other: 26% (-8 percentage points since 1998). 

Source: GAO analysis of FTA NTD data. 

Note: Percentages may not add up to 100 due to rounding and other 
factors. 

[End of figure] 

Upon closer examination of the components of transit funding sources, 
the shares of revenue sources for operating[Footnote 23] and capital 
[Footnote 24] funding differ slightly from the shares for total 
revenues mentioned previously. For example: 

* Operating funding. Fare revenues were the largest source of 
operating funding in 1998 and 2008; however, as shown in figure 4, the 
share of fare revenues decreased considerably as a percentage of 
operating funding during this time period (from about 38 percent to 31 
percent). At the same time, as a percentage of operating funding, 
local government contributions for operating expenses remained 
relatively steady (from about 29 percent to 30 percent), contributions 
of federal and state funding increased (from 4 to 7 percent and 20 to 
26 percent, respectively), and other funding sources, such as 
subsidies from other sectors of operations, decreased (from 9 percent 
to 6 percent). According to transit agency officials at a heavy rail 
agency with whom we spoke, because public transit riders do not pay 
for the full cost of their rides through passenger fares and revenues 
have not kept pace with operating costs, increased ridership has 
strained their transit system's operating budget.[Footnote 25] 

Figure 4: Transit Funding Sources--Operating, 1998 and 2008: 

[Refer to PDF for image: 2 pie-charts] 

1998: 
Federal: 4%; 
State: 20%; 
Local: 29%; 
Other: 9%; 
Fares: 38%. 

2008: 
Federal: 7% (+3 percentage points since 1998); 
State: 26% (+6 percentage points since 1998); 
Local: 30% (+1 percentage points since 1998); 
Other: 6% (-3 percentage points since 1998); 
Fares: 31% (-7 percentage points since 1998). 

Source: GAO analysis of FTA NTD data. 

Note: Percentages may not add up to 100 due to rounding and other 
factors. 

[End of figure] 

* Capital funding. In 1998 the federal government was the largest 
source of capital investment in transit, but by 2008 this was no 
longer the case. Instead, local government replaced the federal 
government as the largest source. As shown in figure 5, from 1998 
through 2008, as a percentage of capital funding, the contribution of 
the federal government fell (from about 50 percent to 40 percent) 
while the contributions of state governments remained relatively 
stable (at about 12 percent), and local government funding increased 
(from 39 percent to 47 percent). 

Figure 5: Transit Funding Sources--Capital, 1998 and 2008: 

[Refer to PDF for image: 2 pie-charts] 

1998: 
Federal: 50%; 
State: 12%; 
Local: 39%. 

2008: 
Federal: 40% (-10 percentage points since 1998); 
State: 12% (no change from 1998); 
Local: 47% (+8 percentage points since 1998); 
Other: 1% (+1 percentage points since 1998). 

Source: GAO analysis of FTA NTD data. 

Note: Percentages may not add up to 100 due to rounding and other 
factors. 

[End of figure] 

Agencies Faced Challenges and Responded by Adjusting Service, Making 
New System Investments, and Maintaining Their Existing Systems: 

Agencies Faced Capacity Constraints and Other Challenges Related to 
Their Vehicles and Infrastructure: 

From 1998 through 2008, transit agencies faced challenges when 
addressing increased ridership demand. More specifically, agencies 
faced capacity constraints related to limitations of their vehicles 
(e.g., too few rail cars and buses) and system infrastructure (e.g., 
platforms that were too short to accommodate longer trains). In 
particular, several of the heavy rail, light rail, and bus agencies we 
interviewed experienced capacity constraints within existing vehicles 
as well as shortages of rail cars and buses. For example, an official 
with the Ann Arbor Transportation Authority said the agency did not 
always have the bus capacity to accommodate increased demand, 
sometimes resulting in overcrowding on buses. In San Francisco, the 
heavy rail system's serviceable rail cars were in such high demand 
that they did not always have enough time to undergo sufficient 
maintenance, which officials said led to problems with vehicle 
reliability and a shortage of vehicles. TriMet, which provides light 
rail services to the metropolitan area of Portland, Oregon, was 
sometimes unable to meet demand for its services due to vehicle 
shortages, such as prior to opening a new rail line and new rail cars 
becoming available. Agency officials said that long lead times for 
vehicle procurements limited their ability to respond to growing 
demand in a timely manner, but that they eventually were able to 
procure additional rail cars to satisfy passenger demand on the new 
line. Rail car procurements generally take years to complete. We have 
reported that time frames of 3 to 4 years are considered quick for 
complete rail car procurements, and many take much longer.[Footnote 26] 

In addition to vehicle capacity constraints, transit agencies also 
faced infrastructure-related capacity challenges when addressing 
increased ridership demand from 1998 through 2008. Most of the 
agencies that reported infrastructure-related challenges from 1998 
through 2008 provided heavy or light rail services.[Footnote 27] 
Infrastructure constraints, such as those related to stations, tracks, 
and other facilities, posed challenges to transit agencies. For 
example, from 1998 through 2008: 

* Chicago's heavy rail system faced challenges related to its platform 
capacity. Due to the platform limitations of certain heavy rail 
stations, Chicago Transit Authority officials could only operate six- 
car trains where eight-car trains would have reduced congestion. These 
stations' platforms were not long enough to accommodate passengers 
loading and unloading from eight-car trains. As a result of capacity 
constraints at these stations, the agency could not always meet 
passenger demand or allow all passengers to board. 

* Los Angeles County's heavy rail system ran out of parking spaces 
immediately after opening parking lots at the northern end of one of 
its rail lines. Difficulty securing additional funds for parking 
structures has limited the agency's ability to meet parking demand. 

* Although Washington, D.C.'s, heavy rail stations were designed to 
accommodate eight-car trains, associated power systems initially were 
only equipped to handle four-and six-car trains. Therefore, upgrading 
the power system components so they could accommodate eight-car trains 
was a significant challenge that agency officials addressed during the 
10-year period in which they worked to expand the system's overall 
capacity. 

Table 2 summarizes these and other examples of infrastructure-related 
challenges that heavy rail and light rail agencies faced when 
addressing increased passenger demand from 1998 through 2008. 

Table 2: Examples of Transit Infrastructure-related Challenges, 1998- 
2008: 

Station challenges: Station design; 
Transit agency examples: Washington, D.C.'s, heavy rail system has 
reached a level of ridership that has created significant vertical 
transportation problems at some of the system's most heavily used 
stations, such as core downtown stations and major transfer points. 
Due to a limited number of stairs and escalators within stations, 
which were not designed to accommodate current ridership levels, 
maintaining enough working escalators and elevators to transport 
riders from below-ground platforms to ground level became a problem in 
1998-2008. 

Station challenges: Terminal design; 
Transit agency examples: The first and last stations--also known as 
terminals--on certain lines within New York City's heavy rail system 
have less capacity to accommodate trains than other terminals. An 
example of a low-capacity terminal is the Astoria-Ditmars Boulevard 
terminal, which can only handle 15 trains per hour because it does not 
have the track configurations needed to allow approaching trains to 
enter terminals at full speed. The system's full-capacity terminals, 
on the other hand, can accommodate 30 trains or more per hour. 

Station challenges: Platform capacity limitations; 
Transit agency examples: Due to the platform capacity limitations of 
certain Chicago Transit Authority stations, the agency could only 
operate six-car trains where eight-car trains would have alleviated 
congestion. These stations' platforms were not long enough to 
accommodate passengers loading and unloading from eight-car trains. As 
a result of capacity constraints at these stations, the agency could 
not always meet passenger demand and sometimes turned away riders. 

Track challenges: Track limitations; 
Transit agency examples: Limitations of the track junctions--locations 
where tracks merge or diverge--within the New York City heavy rail 
system reduce train frequencies. For example, the Nostrand Junction, 
where several rail lines converge, creates a bottleneck for incoming 
trains due to physical conflicts between train movements. Agency 
officials would have to completely redesign Nostrand Junction to 
improve the frequency of train crossings at that junction. 

Other challenges: Insufficient parking; 
Transit agency examples: Los Angeles County's heavy rail system ran 
out of parking spaces immediately after opening park-ride lots at 
northern end stations of one of its rail lines. Difficulty securing 
additional funds for parking structures has limited the agency's 
ability to meet parking demand. 

Other challenges: Shortage of maintenance space; 
Transit agency examples: A shortage of workspace in the Bay Area Rapid 
Transit's maintenance shops exacerbated maintenance backlogs and 
contributed to a shortage of vehicles available for service. 

Other challenges: Insufficient power; 
Transit agency examples: Although Washington, D.C.'s, heavy rail 
stations were designed to accommodate eight-car trains, associated 
power systems initially were only equipped to handle four-and six-car 
trains. Therefore, upgrading the power system components so they could 
accommodate eight-car trains was a significant challenge that agency 
officials addressed during the 10-year period in which they worked to 
expand the system's overall capacity. 

Source: GAO analysis of interviews with selected transit agencies. 

[End of table] 

During this time period, agencies also faced challenges related to 
maintaining aging infrastructure. Heavy rail agencies in particular 
have faced challenges related to aging infrastructure because their 
aging assets have increasingly needed capital reinvestments, even as 
ridership has grown. For example, officials from the Washington 
Metropolitan Area Transit Authority said the agency needed to shift 
its focus from new construction to maintenance during this time 
period, yet securing funds to maintain existing assets proved more 
difficult than securing funds for new projects. In addition, balancing 
scheduled maintenance with expanding hours of service also proved 
challenging. Light rail officials, such as those at Portland's TriMet, 
said they recognize that managing aging infrastructure will take 
significantly more effort in the future. Currently, the oldest section 
of TriMet's system is only 24 years old, which is relatively new in 
comparison with some of the nation's oldest systems; however, agency 
officials have already begun capacity planning in preparation for the 
challenges to come during the next 20 years. 

Many of the transit agencies we interviewed faced budget and funding 
constraints. In some cases, these constraints limited their ability to 
increase services to accommodate additional riders. For example, from 
1998 through 2008: 

* Balancing a constrained operating budget with increased demand for 
services posed a challenge for Chicago's heavy rail system. During 
this time period, the agency's funding sources--including state 
capital bonds and general revenues--did not grow enough to fully cover 
the agency's maintenance needs and personnel costs, according to 
transit officials. Because public transit riders typically do not pay 
for the full cost of their rides, increasing ridership further 
stressed the Chicago system's operating budget, according to agency 
officials. In response, agency officials said they deferred 
maintenance, which in turn affected the system's ability to meet 
demand due to service delays and other maintenance-related problems. 

* Merced County Transit, which provides bus services to Merced County 
in California's Central Valley, tried to improve service frequencies 
so that buses could run every 15 minutes instead of every hour. 
However, agency officials found it very difficult to improve their 
services and they struggled to retain local transit funds amidst 
competing funding needs elsewhere in the county. Agency officials 
ultimately compromised on their goal of increasing service to every 15 
minutes and increased service instead to every 30 minutes. Since 2008, 
available funds have decreased as sales tax revenues and real estate 
values have plunged, causing transit officials to reduce or eliminate 
routes and reduce staff positions. 

* Dallas Area Rapid Transit, which provides light rail services to the 
greater Dallas, Texas, area, is funded by a 1-cent local sales tax, 
which generates revenues annually. From 2001 through 2004, these sales 
tax revenues declined substantially, according to transit agency 
officials, requiring the agency to reduce its capital expansion 
program, use reserve funds to cover budget short falls, and make 
operational adjustments. 

As a result of transit agencies' challenges meeting ridership demand 
from 1998 through 2008, some transit agencies faced the added 
challenge of customer dissatisfaction. For example, as a result of 
increased crowding on trains, customers developed less favorable 
opinions of Chicago's heavy rail system and customer complaints 
increased, according to transit agency officials. In Ann Arbor, 
Michigan, transit riders were not always able to board buses during 
peak ridership periods and ridership studies showed that people 
continue to want more frequent service on some routes. 

Agencies Addressed Increased Ridership Demand by Adjusting Service, 
Making New System Investments, and Maintaining Their Existing Systems: 

To meet increased ridership demand from 1998 through 2008, transit 
agencies took various steps to increase the capacity and efficiency of 
their existing systems. These actions included making service 
adjustments and new system investments, in addition to maintaining 
their existing systems. For example, from 1998 through 2008: 

* Service adjustments, such as extending service hours and adjusting 
routes, helped agencies make better use of available resources and 
target areas of high demand. For example, the light rail agency in 
Sacramento, California, extended service hours during a period of high 
demand in 2008 when an interstate highway in the area was under 
construction. During this time period, which coincided with an 
increase in gas prices, there was standing room only on the line that 
serviced that particular area and some riders could not get onto a 
train. In response, transit officials ran longer trains and extended 
service hours, thereby creating additional capacity and accommodating 
the increase in demand. 

* New system investments, such as expanding vehicle fleets, extending 
platforms, building new stations, and adding parking, allowed agencies 
to accommodate more riders and improve their operations and customer 
service. For example, in response to challenges posed by limited space 
at maintenance facilities, San Francisco's heavy rail agency expanded 
its maintenance facilities, which allowed the transit agency to 
increase its maintenance operations and, ultimately, increase the 
availability of serviceable rail cars. 

* Maintaining existing systems, including vehicles and infrastructure, 
allowed agencies to accommodate more riders, increase the frequency of 
their service, and come into compliance with laws and regulations, 
such as the Americans with Disabilities Act of 1990, as amended. 
[Footnote 28] For example, transit officials at the MTA in New York 
City, New York, said the agency improved the heavy rail system's 
signaling systems in order to sustain current levels of service and 
also enable the agency to increase frequency of service. Officials 
explained that the improved signaling system will increase capacity by 
allowing trains to be spaced more closely. 

Table 3 summarizes other examples of actions that heavy rail, light 
rail, and bus agencies took to address growing ridership demand from 
1998 through 2008. 

Table 3: Examples of Actions Taken by Transit Agencies to Meet Demand, 
1998-2008: 

Service adjustments: Adjusting services; 
Transit agency examples: As ridership increased on one of its light 
rail lines, Dallas Area Rapid Transit increased the frequency of peak 
hour services. 

Service adjustments: Adding new services; 
Transit agency examples: NJ Transit officials initiated light rail 
service on their recently constructed Hudson-Bergen and River light 
rail lines to spur and accommodate economic development and any 
ridership increases associated with these developments. 

Service adjustments: Extending service hours; 
Transit agency examples: The light rail service provider in 
Sacramento, California, extended service hours during periods of 
increased ridership. 

Service adjustments: Adjusting routes; 
Transit agency examples: Some agencies, such as Ann Arbor's municipal 
bus service provider, adjusted their routes to better meet the needs 
of their customers. Ann Arbor bus officials improved the directness of 
certain routes by launching service from the west side of town 
straight to the University of Michigan campus so that passengers 
previously riding less-direct routes would not have to change buses. 

Service adjustments: Adjusting or increasing fares; 
Transit agency examples: Some agencies altered their fare schedules. 
For example, Washington, D.C.'s, heavy rail system increased fares 
during peak hours to better manage peak demand and create incentives 
for riders to travel during off-peak hours. 

Service adjustments: Assessing needs; 
Transit agency examples: Some agencies conducted needs assessments to 
better align their services with riders' needs. Merced County Transit, 
which operates bus services for California's Merced County, for 
example, conducted ridership surveys to better understand riders' 
needs. From these surveys, transit agency officials gained a better 
understanding of where, when, and why riders board most frequently. 
This information helped them understand how to modify service 
schedules to better meet the needs of their riders. 

New system investments: Expanding fleets; 
Transit agency examples: Among other cities, Denver, Colorado, 
expanded its light rail fleet in response to increased ridership. 
Because the city rapidly expanded its rail system from 4.5 miles of 
track in 1998 to more than 35 miles of light rail lines by 2008, 
ridership on the light rail system grew quickly and far exceeded 
ridership forecasts. The early ridership forecasts underestimated 
demand for the new service, which led to capacity constraints on the 
original light rail line. In response to capacity constraints, transit 
agency officials purchased additional rail cars. 

New system investments: Extending platforms; 
Transit agency examples: Dallas's light rail system extended its 
platforms to accommodate longer trains and more riders. 

New system investments: Increasing maintenance space; 
Transit agency examples: The San Francisco Bay Area's heavy rail 
system expanded its maintenance facilities, which allowed the system 
to increase its maintenance operations and, ultimately, increase the 
availability of serviceable rail cars. 

New system investments: Adding parking; 
Transit agency examples: Several agencies responded to increased 
passenger demand by expanding their parking capacity. NJ Transit, 
Dallas Area Rapid Transit, and the Los Angeles County Metropolitan 
Transportation Authority were among the transit agencies that 
increased their parking capacity. 

New system investments: Purchasing new technologies; 
Transit agency examples: Several agencies adopted new technologies to 
improve their operations and customer service. For example, Ann 
Arbor's bus agency began offering riders real-time information using 
an advanced operating system, which included automatic vehicle 
location, bus diagnostic, and electronic fare box technologies. 

New system investments: Adding new stations or extending existing 
lines; 
Transit agency examples: Some agencies added new stations and extended 
their lines. For example, San Francisco's heavy rail system added a 
new station in between two other stations along the Dublin/Pleasanton 
line and an extension to San Francisco International Airport. NJ 
Transit extended light rail lines and added new stations on those 
lines to attract new riders and better service existing riders. 

Maintaining existing systems: Rehabilitating or reconfiguring fleets; 
Transit agency examples: Some agencies either rehabilitated or 
reconfigured their fleets. Reconfiguring cars increased standing space 
and allowed agencies to accommodate more passengers. 

Maintaining existing systems: Replacing vehicles; 
Transit agency examples: Some agencies replaced existing vehicles with 
new vehicles to better meet passenger demand. For example, Ann Arbor's 
bus agency replaced its fleet with low-floor buses, which an agency 
official said are more comfortable for standing passengers, in part, 
because there is less swaying when passengers are low to the ground. 

Maintaining existing systems: Making track improvements; 
Transit agency examples: Some agencies made track improvements to 
improve service frequency and reliability. For example, before San 
Francisco's heavy rail system officials undertook one track 
improvement project, trains coming from the system's center would have 
to travel to the last station at the end of the line to turn around. 
Now, trains can turn back sooner, which has allowed the agency to 
improve its single-tracking functions and operate trains in both 
directions. As a result, agency officials have been able to make 
better use of available trains because trains that would otherwise 
have had to travel to the end of the line can now re-enter the service 
pattern sooner. 

Maintaining existing systems: Updating stations; 
Transit agency examples: Some agencies updated their stations to 
improve stations' loading times, comfort, perceived safety, and 
accessibility to persons with disabilities. For example, Dallas Area 
Rapid Transit expanded some light rail station platforms to improve 
loading of passengers with disabilities, strollers, and bicycles. This 
improved the efficiency of trains throughout the system. 

Maintaining existing systems: Updating signaling systems; 
Transit agency examples: Some agencies improved their signaling 
systems to maintain current levels of service and increase frequency 
of service. For example, New York City's heavy rail agency installed a 
communications-based train control system on the L Canarsie line, 
which will eventually increase capacity by allowing trains to be 
spaced more closely. 

Source: GAO analysis of interviews with selected transit agencies. 

[End of table] 

Agencies Experienced Varying Degrees of Success in Meeting Increased 
Ridership Demand: 

Transit agencies experienced varying degrees of success in meeting 
increased ridership demand from 1998 through 2008. Most heavy rail 
agency officials we spoke with said they generally met growing demand, 
and one reported partial success in meeting demand. For example, 
transit agency officials in Washington, D.C., reported that although 
heavy rail services generally met rising demand, the agency faced 
challenges accommodating high demand while working to expand its 
system and maintain its aging assets. Community and business groups 
added they would like to see the city's heavy rail capacity increased 
to help relieve congestion in the system and increase the reliability 
of service. 

Light rail agency officials with whom we spoke were divided about the 
extent to which their agencies successfully met ridership demand from 
1998 through 2008. Several said they were generally successful in 
meeting growing demand. However, two said they either barely or 
inadequately met demand. For example, Sacramento's light rail service 
provider reported that the agency's service area did not keep up with 
the area's growing population and housing boom from 1998 through 2008. 
Officials from a local agency and community group said the transit 
agency met demand within the city of Sacramento fairly well, and the 
system had enough capacity to meet those riders' needs. However, they 
added that as the area developed housing and employment centers 
outside the downtown area, the agency was not always able to meet the 
needs of commuters from outlying or newer-growth areas. Nor was the 
agency always able to meet the needs of potential riders who chose to 
drive rather than use public transit due to inconvenient transfers or 
a shortage of transit services, according to the community group 
official. 

All five bus agencies we interviewed had limited success in meeting 
ridership demand. Some agencies could not add the services needed to 
accommodate increasing demand. Others had to turn away riders, while 
others reported that their ability to expand to meet the needs of 
emerging markets was limited. For example, a transit official from Ann 
Arbor's bus agency said the agency was generally successful in meeting 
demand within the city of Ann Arbor, but was not as successful in 
surrounding communities due to funding constraints. Representatives of 
a local community group and intergovernmental agency added that the 
agency turned away riders during periods of high demand and service on 
many routes was too infrequent. However, local officials, as well as 
community and business groups, acknowledged the efforts the agency has 
made to respond to increased ridership demand amidst funding and 
resource challenges. 

Demographic Changes Point to Future Increases in Ridership Demand, but 
Cost Increases and Fiscal Uncertainties May Limit Agencies' Ability to 
Meet Demand: 

Population Increases and Other Demographic Trends May Increase Future 
Demand: 

Estimates for future population growth and other demographic trends 
point to potential increases in future ridership demand. According to 
U.S. Census Bureau projections, the U.S. population will increase by 
20.4 percent from 2010 to 2030. Demographic changes point to increases 
in future demand as well. 

Trends in growing redevelopment and increased densities in the urban 
core, as well as continued growth of housing and employment centers 
near outlying suburban transit hubs, are expected to contribute to 
future increases in ridership demand. Additionally, increased focus on 
transit-oriented development around transit stations in both urban and 
suburban areas may also increase future ridership demand.[Footnote 29] 
For example, the regional planning agency in the San Francisco Bay 
Area anticipates a substantial amount of continued growth and 
redevelopment of San Francisco's urban core. Transit agency officials 
also noted that while San Francisco used to be the principal 
destination for employers, areas outside of the city, such as Walnut 
Creek, Dublin, Pleasanton, and San Jose, are increasingly attracting 
employment centers, which has increased traffic on reverse commute 
routes. Furthermore, the transit agency is collaborating with others 
to encourage transit-oriented developments near transit stations. 
Property values have held steady near transit stations as compared 
with declines in property values in other areas.[Footnote 30] For 
example, according to transit agency officials, to date, property 
values in the city of San Francisco were barely impacted by the 
housing downturn, whereas areas further out with less access to 
transit were impacted more greatly, indicating that people are 
starting to see the value of living near public transit. 

Increases in the transportation-disadvantaged populations[Footnote 
31]--those who must rely on public transit for their travel--may also 
increase future ridership demand. For example, according to the U.S. 
Census Bureau, in 2030, baby boomers aged 65 and older will comprise 
nearly 20 percent of all U.S. residents. Transit officials that we 
spoke with said that individuals may become increasingly transit- 
dependent as they age. Transit officials in Ithaca, New York, 
anticipate a peak in their senior population starting around 2020 and 
expect that as people retire, they may stop driving personal vehicles, 
which may contribute to increases in transit ridership. Also, 
according to transit officials in Portland, Oregon, the prominence of 
the aging demographic will become more noticeable as the baby boomers 
age "in place" (i.e., remain in the Portland metropolitan area). Over 
time, officials said that accommodating the aging population on bus 
and light rail services and providing transit services that are 
accessible, comfortable, and safe will be challenging but critical. 
However, officials added that accommodating the expected increase in 
seniors is an important consideration for transit agencies, especially 
because complementary paratransit service,[Footnote 32] the 
alternative for individuals unable to use fixed-route transit service, 
is more expensive to provide per rider. We previously reported that it 
is difficult for transit agencies to balance providing complementary 
paratransit service with the increased cost of accommodating a growing 
ridership.[Footnote 33] Additionally, increased densities in urban 
areas may increase transit-dependent populations, where transit is a 
mode of necessity for many city residents.[Footnote 34] In Dallas, 
Texas, and Frederick, Maryland, transit agency officials also noted 
increases in the low-income population, who rely upon transit to get 
to their jobs primarily within the service sector, which they 
anticipate will increase transit ridership demand in these areas. 

Transit agency officials and others with whom we spoke also identified 
an expectation that discretionary riders[Footnote 35] will impact 
future increases in ridership demand. Specifically, they expect that a 
younger demographic will migrate into cities and increasingly use 
transit, consistent with their quality-of-life preferences and 
environmental concerns. For example, Ann Arbor business community 
representatives told us that an increasingly younger workforce 
commutes from nearby communities where housing is cheaper and prefers 
to take transit. According to transit agency officials in Portland, 
Oregon, there is a growing younger population with certain lifestyle 
expectations, including the ability to walk, bike, or take transit to 
meet most of their transportation needs. 

Although transit agency officials anticipate future ridership 
increases, the extent of this increase is sometimes difficult to 
determine. We previously reported that some metropolitan planning 
organizations face challenges in travel demand forecasting, including 
a lack of technical capacity and data necessary to conduct complex 
transportation modeling required to meet their planning needs. 
[Footnote 36] Some transit agency officials with whom we spoke also 
noted that a lack of technical expertise and resources needed to 
accurately forecast future ridership growth is a challenge. According 
to FTA officials, difficulties transit agencies may have in assessing 
the demand for existing or new services could affect their ability to 
meet future demand. Specifically, if future ridership demand is not 
accurately projected, transit agencies may not make the best 
investment of their resources. 

Agencies' Increased Costs and Fiscal Uncertainties May Limit Their 
Ability to Meet Future Increases in Ridership Demand: 

Transit agency officials expressed concern about their agencies' 
abilities to meet future increases in ridership demand for two 
principal reasons: increased costs and various fiscal uncertainties. 

Increased Costs: 

Future costs for transit agencies will increase because agencies must 
continue to support system expansions and add capacity to accommodate 
for increases in ridership demand, as well as address additional 
expenses associated with maintaining a state of good repair for aging 
infrastructure. According to FTA, aging capital assets drive 
increasing maintenance costs and limit the ability to expand system 
capacity at a time of high demand. FTA has also reported that roughly 
one-third (29 percent) of all transit assets are in poor or marginal 
condition, implying that these assets are near or have already 
exceeded their expected useful life and need significant capital 
reinvestment for rehabilitation or replacement.[Footnote 37] Based on 
FTA's most recent estimates, $77.7 billion is needed to bring all the 
nation's transit systems into a state of good repair. In addition, an 
annual average of $14.4 billion would be required to maintain the 
systems.[Footnote 38] 

Officials from heavy rail and light rail agencies with whom we spoke 
in particular said they anticipate facing increasingly difficult 
challenges related to maintaining a state of good repair and operating 
their systems as they continue to age. For example, in Chicago, 
increasing ridership on the heavy rail transit system placed a 
significant amount of stress on the agency's operating budget. As a 
result, the agency deferred maintenance, which in turn impacted its 
ability to meet demand due to service delays and other maintenance- 
related problems on the aging system. Since 2008, challenges related 
to the agency's operating budget have persisted, and, starting in 
February 2010, the agency had to implement $100 million in service 
cuts to help balance its budget. Also, officials from the heavy rail 
agency in Washington, D.C., said the challenge of maintaining and 
repairing their aging system increased from 1998 through 2008, and 
they expect this trend to continue. Washington, D.C., transit 
officials said that before 1998 the agency focused on constructing and 
expanding a new system. In 1998, the system's 103 miles of track had 
not been completely built, but the oldest part of the system was only 
22 years old. However, by 2008, the oldest portion of the system was 
32 years old and officials said they needed to devote significant 
resources to maintaining the system.[Footnote 39] 

As compared with the majority of the large heavy rail systems, the 
infrastructures of light rail systems are relatively newer. For 
example, the oldest section of Portland, Oregon's, light rail system 
is 24 years old, as compared with the heavy rail systems in Chicago 
and New York which are over 100 years old. However, although officials 
at Portland's transit agency said they have a robust capital 
maintenance program, they also said that without an influx of American 
Recovery and Reinvestment Act of 2009 (Recovery Act)[Footnote 40] 
funding in 2009, which the agency specifically targeted to help reduce 
a backlog of systems and vehicle maintenance, the transit agency would 
have fallen further behind in its maintenance needs. For NJ Transit, 
the light rail extension of the Newark line was financially 
challenging because of the line's aging infrastructure. In order to 
extend the line, the agency had to upgrade the entire track and 
signaling system, while undergoing other maintenance-related expenses 
such as the maintenance and rehabilitation of transit stations and 
vehicles, as well as maintaining a general state of good repair of the 
system as a whole. 

Further, transit agency officials anticipated that increases in the 
costs associated with providing paratransit services necessitated by 
projected demographic changes, such as increases in the transit- 
dependent population, would be a challenge looking ahead. 

Fiscal Uncertainties: 

Due to operating deficits that states and localities currently face, 
state and local governments may not be able to continue their past 
level of support which may ultimately limit transit agencies' ability 
to meet future increases in ridership demand. Officials from the 
agencies with whom we spoke said that since 2008, the economic 
downturn has put a strain on all sources of funding for transit 
agencies, particularly state and local sources of funding. We have 
reported that states and localities face near-term budget and long-
term fiscal challenges that will grow over time.[Footnote 41] States' 
revenue shortfalls have been cushioned by the temporary infusion of 
Recovery Act funds.[Footnote 42] For example, we found that officials 
in local governments used Recovery Act funds to maintain services, 
retain staff positions, or begin infrastructure and public works 
projects that otherwise would have been delayed or canceled. However, 
local government officials also reported they experienced revenue 
declines and budget gaps even after incorporating Recovery Act funds 
in their budgets. Officials at some localities reported that while 
these funds have helped to preserve services, they still faced budget 
deficits for the remainder of fiscal year 2010 and the next fiscal 
year.[Footnote 43] We also previously reported that state and local 
governments face increasing fiscal challenges in the next 50 years and 
these pressures have implications for federal programs. For example, 
estimates of the costs to repair, replace, or upgrade aging 
infrastructure so that it can safely, efficiently, and reliably meet 
current demands, as well as expand capacity to meet increasing 
demands, top hundreds of billions of dollars. The nation's transit 
infrastructure is owned, funded, and operated by all levels of 
government. In this environment, all levels of government will compete 
for resources to meet the demand for infrastructure improvements, 
which may exceed what the nation can afford.[Footnote 44] 

As previously discussed, from 1998 through 2008, while overall transit 
revenues (including operating and capital funding) increased, 
increases in the share of state and local government funding offset 
decreases in the share of other nonfederal funding sources, such as 
passenger fares. In addition, while in 1998 the federal government was 
the largest source of capital investment in transit, by 2008 this was 
no longer the case. Instead, local government replaced the federal 
government as the largest source. However, as state and local 
governments are currently facing budget shortfalls, transit agency 
officials raised concerns that fiscal uncertainties may limit their 
agencies' ability to meet future increases in ridership demand. For 
example, the state of California eliminated all state transit 
development assistance for state fiscal years 2009 and 2010 because of 
the state's fiscal situation, and it has only been partially restored 
for 2011. Officials from Merced County Transit in California said the 
bus agency's biggest challenges will be insufficient operating funds 
due to the elimination of state transit development assistance and a 
decrease in local sales tax revenue, which will not allow for any bus 
service expansions. Similarly, light rail officials from Sacramento 
Regional Transit, which also operates in California, said the agency 
is struggling to survive the economic downturn given a major cut in 
state transit assistance (which was approximately $15 million to $16 
million each year and nearly 10 percent of its total operating 
budget), declining local sales tax revenues, and widespread state 
employee furloughs, which have impacted farebox revenues. 
Additionally, according to transit agency officials we spoke with, the 
uncertainty of federal funding levels with the pending surface 
transportation reauthorization combined with anticipated decreases in 
state and local funding poses challenges for long-term planning. 

Options Exist to More Effectively Deliver Federal Surface 
Transportation Programs and Help Transit Agencies Meet Increased 
Ridership Demand: 

We and others have reported on ways to more effectively deliver 
federal surface transportation programs that could help transit 
agencies address growing ridership demand amid fiscal uncertainties. 
While officials from all 15 transit agencies we spoke with said 
federal grant programs are critical to maintaining and operating their 
transit systems, including addressing growing ridership demand, most 
agency officials also said that additional federal funding would help 
their agencies accommodate future increases in ridership. However, the 
nation faces mounting fiscal difficulties and although demand on 
transit systems is expected to grow, increased federal financial 
support is not something transit agencies can count on. Therefore, the 
challenge is to focus the resources that are available to effectively 
maximize the impact on transit agencies' services. We and others have 
made recommendations to Congress and others about how to restructure 
federal programs to better assist transit agencies and the federal 
government in focusing scarce resources and addressing future 
ridership demand, including: 

* focusing resources on maintaining the nation's rail and bus systems 
in a state of good repair; 

* streamlining the delivery of federal grant programs and projects; 
and: 

* incorporating performance accountability into federal programs. 
[Footnote 45] 

State of Good Repair: 

A critical component of addressing future ridership demand is the need 
for the federal government and transit agencies to focus on transit 
systems' state of good repair.[Footnote 46] When a system is not 
maintained in a state of good repair and needed maintenance is 
deferred, it is difficult to address future ridership demand because 
the system is not operating at optimal levels. This could ultimately 
lead to a loss of riders due to resulting problems, such as service 
delays and safety issues. 

According to FTA, bringing the nation's transit system to a state of 
good repair, while at the same time planning for and implementing 
needed service expansions to accommodate demand, will be a significant 
challenge. Despite ongoing investment, many of the nation's vehicles 
and much of its infrastructure are deteriorating. For transit riders, 
this deterioration eventually leads to declining service reliability. 
For transit operators, aging capital assets drive increasing 
maintenance costs and limit the ability to expand system capacity at a 
time of high demand.[Footnote 47] The President's fiscal year 2011 
budget request included, for FTA, a new State of Good Repair 
initiative for bus and rail transit agencies to bring infrastructure 
into a state of good repair. The proposed initiative combines two 
existing programs, namely the Fixed Guideway Modernization Program (49 
U.S.C. § 5309(b)(2)) and the Bus and Bus Facilities Program (49 U.S.C. 
§§ 5309(b)(3), 5318), and would provide $2.9 billion for fiscal year 
2011, an 8 percent increase over the combined programs' fiscal year 
2010 level of funding. The President has submitted his budget request 
to Congress.[Footnote 48] In addition, the Committee on Transportation 
and Infrastructure of the U.S. House of Representatives issued A 
Blueprint for Investment and Reform (Blueprint) in 2009, which is a 
summary of a proposal for the pending reauthorization of the surface 
transportation legislation.[Footnote 49] It focuses the majority of 
transit funding into four core categories, one of which is to bring 
urban and rural public transit systems to a state of good repair. 
[Footnote 50] 

Officials from the majority of transit agencies with whom we spoke 
emphasized the importance of maintaining a state of good repair in 
order to meet future increases in ridership demand. However, agency 
officials pointed out it is easier to procure additional federal 
funding to support new transit capital projects than to obtain funding 
to help maintain their existing vehicles and infrastructure. Transit 
agency officials explained that their agencies rely on annual federal 
transit formula funds to address ongoing needs, but additional federal 
funds available beyond those yearly allocations are focused on new 
capital investments as opposed to maintaining a state of good repair. 
Further, when asked how federal grants could be improved to better 
help transit agencies address ridership demand, agency officials 
reported that flexibility in how funding could be used, either for 
capital or operating purposes based on an agency's needs, would be 
particularly helpful for efforts to maintain a state of good repair 
and other core capacity issues. Transit agency officials also 
indicated that if their systems' state of good repair needs are not 
met and infrastructure maintenance is deferred, they will not be able 
to efficiently and effectively address future ridership demand. 

Further, the National Surface Transportation Policy and Revenue Study 
Commission,[Footnote 51] which was required by SAFETEA-LU to study and 
identify key areas for federal focus for the nation's surface 
transportation system, concluded that the area of highest priority--
and the foundation for all of the report's other recommendations 
[Footnote 52]--was to bring the nation's infrastructure, including 
transit assets, into a state of good repair. Specifically, the 
Commission stated that states, local governments, and other entities 
must develop, fund, and implement a program of asset maintenance and 
support over the useful life of the asset in order to assure the 
maximum effectiveness of federal capital support.[Footnote 53] 
According to FTA, currently only a few transit agencies actively 
maintain transit asset inventories for capital planning purposes and 
there is no federal reporting requirement for transit assets except 
for vehicles. However, FTA officials added that while some data on 
fixed infrastructure are collected in the NTD, they are limited in 
scope. FTA also noted that a comprehensive and effective asset 
management program could help transit agencies establish 
organizational state of good repair objectives, assess the magnitude 
of the issue, better coordinate agency planning and decision-making 
functions, and ultimately help transit agencies prioritize their most 
critical needs, especially with scarce funds for state of good repair 
and deferred maintenance backlogs.[Footnote 54] Additionally, the 
Senate report accompanying the fiscal year 2010 appropriations bill 
for the Department of Transportation (DOT), directed FTA to take a 
leadership role in improving the use of asset management practices 
among transit agencies.[Footnote 55] According to FTA officials, in 
response to this congressional direction, FTA is undertaking a new 
initiative to provide technical assistance and develop new data 
resources to help transit agencies improve their asset management 
practices. FTA officials added that this initiative is intended to 
promote a better understanding of how the industry can achieve state 
of good repair goals. 

Streamlining the Delivery of Federal Grant Programs and Projects: 

We and others have recommended that the current federal grant approval 
process for large transit capital projects be simplified and 
streamlined to speed up project delivery and reduce costs. This 
includes streamlining the delivery of federal transportation grant 
programs such as the New Starts project planning and development 
approval process and the required environmental reviews.[Footnote 56] 
The New Starts program is the primary federal source for major transit 
capital investments for construction of new fixed guideway systems or 
extensions to existing systems. Transit agency officials indicated 
that New Starts funding helped their agencies address increases in 
ridership demand.[Footnote 57] However, officials from nearly half of 
the heavy and light rail transit agencies with whom we spoke also said 
it would be helpful if the federal grant process were more streamlined 
and efficient. Agency officials explained that the development and 
approval process for large transit capital projects can be lengthy. 
Further, the process can become more difficult as agencies are 
concurrently trying to use the finite resources they have to 
accommodate growing demand. 

In prior work, we recommended that DOT assess streamlining options, 
such as combining project phases, for the New Starts program.[Footnote 
58] We also recommended that DOT seek legislative changes, if 
necessary, to implement options to expedite the New Starts process. 
DOT agreed with our recommendations noting that the options identified 
are consistent with the options that FTA has been discussing with 
transit stakeholders and congressional staff. However, while each 
option could help expedite the process, each option has advantages and 
disadvantages to consider. For example, each option would likely 
require certain trade-offs, namely, potentially reducing the level of 
rigor in the evaluation process in exchange for a more streamlined 
process.[Footnote 59] As we have previously reported, the length of 
the New Starts process is due, at least in part, to the rigorous and 
systematic evaluation and rating process required by law.[Footnote 60] 
The rigor of the program is intended to help FTA hold transit agencies 
accountable for results, maximize the benefits of each dollar 
invested, and ensure that the federal obligation to the project is not 
affected by cost and schedule overruns.[Footnote 61] Our previous work 
has also identified delays in the New Starts project development 
process due to FTA's project management oversight. According to some 
project sponsors, in some cases, addressing additional oversight 
requirements has increased the time and resources required by the 
project sponsor which also increases total project costs. However, 
finding the right balance between protecting federal investments 
through project management oversight and advancing large transit 
capital projects through the project development process is difficult. 
[Footnote 62] In addition, transit agencies currently work within the 
statutory and regulatory constraints of the New Starts program, and 
streamlining can only be done within these confines or through 
legislative changes. 

The Committee on Transportation and Infrastructure of the U.S. House 
of Representatives' Blueprint also proposes that the New Starts 
program be restructured to speed project delivery, ensure all benefits 
of the proposed projects are fully evaluated, and provide a level 
playing field for local decision making. In addition, to reduce 
unnecessary delays in the delivery of transit projects, it proposes 
that an office within FTA be created to improve the process by 
eliminating duplication in documentation and procedures and expediting 
the development of projects through the environmental review process, 
design, and construction.[Footnote 63] 

Furthermore, the National Surface Transportation Policy and Revenue 
Study Commission notes that overall project delivery times and costs 
of major transportation projects could be reduced by shortening the 
time to complete environmental reviews in conjunction with other 
measures that address conventional strategies for implementing 
projects once they clear environmental review. Due to the rapid 
increase in construction costs in recent years, delays in completing 
projects have become very expensive, according to the Commission. The 
Commission identified two sources of delay that should be addressed in 
the short term: redundancies in the National Environmental Policy Act 
of 1969 (NEPA)[Footnote 64] process and delays associated with 
obtaining permit approvals.[Footnote 65] We have previously reported 
on the time taken to conduct environmental reviews of highway projects 
and found that stakeholders identified various aspects of the 
environmental review process they believed added more time than was 
necessary. For example, some stakeholders said that federal agencies 
lacked sufficient staff to handle their workloads and that meeting 
certain statutory criteria are too time consuming.[Footnote 66] 

Incorporating Performance Accountability Measures: 

Another way to focus scarce resources while addressing the challenges 
of future ridership demand could be to incorporate greater performance 
and accountability into federal programs to best achieve intended 
outcomes. Most federal surface transportation programs lack a link 
between funding and the performance of a transit system or grantee. We 
have previously reported that federal transit grant programs--as well 
as highway and safety grant programs--distribute funds through 
formulas that are typically not linked to performance and, in many 
cases, have only an indirect relationship to need.[Footnote 67] 
Furthermore, these programs generally are not linked to the federal 
objectives they are intended to address, in part due to the wide 
discretion granted to states and localities in using most federal 
funds. To address these findings, we recommended that Congress 
consider re-examining and refocusing surface transportation programs 
so that they have goals with direct links to an identified federal 
interest and role, making grantees more accountable through more 
performance-based links between funding and program outcomes, among 
other things. In some cases, the federal government and state and 
local grantees may have different goals, and national priorities may 
not be considered by grantees even when federal funding is involved. 
In prior work, we also recommended that the Director of the Office of 
Management and Budget work with agencies and Congress to encourage the 
use of performance accountability mechanisms in grant design and 
implementation and promote knowledge transfer among agencies and 
grantees.[Footnote 68] 

As we have previously reported, performance measures should vary 
according to program goals and there is no "one-size-fits-all" 
solution--careful consideration should be taken when implementing 
these mechanisms.[Footnote 69] Nevertheless, we and other experts have 
identified key criteria for developing performance measures that could 
be implemented, for example, in transportation programs, including: 
[Footnote 70] 

* Develop a minimum set of performance measures that can be linked to 
a limited number of high-level national goals and consistently applied 
across state and local agencies. 

* Develop measures that demonstrate progress over time, rather than 
measures tied to short-term targets. 

* Develop measures that emphasize incentives, training, and support, 
rather than penalties, as a preferred way to advance performance. 

However, some surface transportation programs are moving toward using 
performance measures in distributing grants. For example, the National 
Highway Traffic Safety Administration (NHTSA) administers the Section 
408 grant program that provides funding for states' traffic safety 
data systems and improvements, which better allow states to measure 
transportation performance.[Footnote 71] To measure performance, a 
state, as part of its required strategic plan, must develop goals, or 
desired outcomes, by which to determine program success.[Footnote 72] 

We have recently reported that while some federal transit programs 
distribute funds based partly on performance, opportunities to improve 
grant recipients' performance accountability remain.[Footnote 73] For 
example, in November 2010 we reported that one of six formula-based 
FTA transit grant programs we reviewed--the Urbanized Areas Formula 
Grant--allocated funding, in part, based on performance--accounting 
for less than 5 percent of the total funding distributed through the 
six programs. Assuming, for example, that a federal goal was to reduce 
the backlog of state of good repair needs nationwide and optimize the 
performance of existing systems--actions which would help transit 
agencies meet increased passenger demand--then tracking specific 
outcomes through performance measures that are clearly linked to 
program goals could provide a strong foundation for holding grant 
recipients responsible for achieving federal goals. In addition, 
implementing links between transit funding and performance through the 
use of financial performance accountability mechanisms could help 
create incentives for transit agencies to improve their performance, 
and provide the means for measuring overall program performance. 
[Footnote 74] For example, the National Transportation Policy Project, 
a project of the Bipartisan Policy Center,[Footnote 75] has 
recommended that Congress create a Performance Bonus Program that 
would provide additional funds to states and metropolitan regions 
based on demonstrated progress toward meeting national performance 
goals. This program would assess how well states and metropolitan 
regions reduce their backlog of system preservation needs and optimize 
the performance of existing transit systems based on proposed 
performance measures. Recipients could then use Performance Bonus 
Program funds for any transportation purpose with few restrictions. As 
a corrective measure, poorly performing states and regions would be 
subject to greater federal scrutiny and review in the planning process 
for their formula funds.[Footnote 76] We recently recommended that FTA 
report to Congress on options for adding performance accountability 
mechanisms to transit grant programs to ensure efficient and effective 
federal transit grant programs and that FTA further analyze and use 
transit agency data, when applicable, for evaluating federal transit 
program performance.[Footnote 77] 

Agency Comments: 

We provided DOT with a draft of this report for its review and 
comment. In commenting on the draft, DOT generally agreed with the 
information presented and provided technical comments, which we 
incorporated as appropriate. 

We are sending copies of this report to interested congressional 
committees and the Secretary of Transportation. We also will make 
copies available to others upon request. In addition, this report will 
be available at no charge on GAO's Web site at [hyperlink, 
http://www.gao.gov]. 

If you or your staff has any questions about this report, please 
contact David Wise at 202-512-5731 or wised@gao.gov. Contact points 
for our Offices of Congressional Relations and Public Affairs may be 
found on the last page of this report. GAO staff who made major 
contributions to this report are listed in appendix III. 

Signed by: 

David Wise: 
Director, Physical Infrastructure Issues: 

[End of section] 

Appendix I: Objectives, Scope, and Methodology: 

To address how transit agencies are responding to increased passenger 
demand, we reviewed (1) trends in transit ridership and services from 
1998 through 2008; (2) challenges, if any, that transit agencies faced 
during this period to address increased ridership and actions they 
took in response; and (3) factors that might affect future ridership 
demand and the ability of transit agencies to meet that demand. 

To describe trends in the transit industry's ridership, services, 
costs, and revenues from 1998 through 2008, we examined data from 
Federal Transit Administration's (FTA) National Transit Database 
(NTD).[Footnote 78] We examined NTD data for all reporting agencies 
from 1998 through 2008 and conducted more detailed analyses by mode 
(for agencies operating heavy rail, light rail, and bus services). 
[Footnote 79] We selected agencies that operate heavy rail, light 
rail, and bus services because these three modes combined represented 
approximately 92 percent of all public transit trips made during the 
last 5 years for which NTD data were available at the time of our 
analysis of transit modes' market share. We used NTD data to determine 
trends in the transit industry's ridership (measured by passenger 
miles traveled (PMT)),[Footnote 80] supply of services (measured by 
vehicle revenue miles (VRM)),[Footnote 81] costs (including operating 
and capital expenses),[Footnote 82] and revenues (including 
operating[Footnote 83] and capital funding.[Footnote 84]) We chose to 
analyze NTD data from 1998 through 2008 because it provided a 
comprehensive dataset for the variables included in the 
analysis.[Footnote 85] Data from 2008 were the most current available 
data on these variables when we conducted our review. To determine 
whether NTD data would be reliable for our purposes, we interviewed 
FTA officials who are knowledgeable about the design and uses of NTD 
data and researchers who regularly use NTD data. We also assessed the 
accuracy and comprehensiveness of specific data we planned to use and 
conducted an analysis to determine what effect, if any, New York 
City's Metropolitan Transportation Authority (MTA) had on national 
transit trends, since New York City comprised about one-third of 
unlinked passenger trips (UPT)[Footnote 86] in 2008. To conduct this 
analysis, we used NTD data for 1998 through 2008 and examined trends 
over time for various measures of service use and output, expenses, 
and revenue sources. We found that with few exceptions, the national 
trends are not especially distorted by the omission or inclusion of 
the New York City data. However, we did find that unlinked passenger 
trips were more greatly affected by the omission or inclusion of the 
New York City data than the other variables examined. For this reason, 
we chose to use PMT as a measure of ridership for the purposes of our 
final analysis. See appendix II for a detailed description of this 
analysis. In reviewing NTD data, we determined they were reliable for 
our purposes, which were to provide information on national trends in 
transit ridership, service, costs, and revenues from 1998 through 2008 
for transit agencies offering heavy rail, light rail, and bus service. 

To identify challenges, transit agencies faced and the actions they 
took to address increased ridership, we conducted semistructured 
interviews with officials from 15 selected transit agencies in 
urbanized areas. We based our selection of these transit agencies on 
the type of transportation services provided (heavy rail, light rail, 
or bus), rate of growth in UPTs from 1998 through 2008, geographic 
dispersion, and size.[Footnote 87] While some of the transit agencies 
we interviewed may provide other types of transit services, our 
interviews focused on the type of transit service indicated in tables 
4 and 5 (either heavy rail, light rail, or bus). For 3 of the 15 
transit agencies, we visited the urbanized areas (one with each type 
of service--heavy rail, light rail, and bus) in which they were 
located and conducted in-person interviews with representatives of the 
transit agencies, local governments, metropolitan planning 
organizations, the business community, advocacy groups, and others in 
these three areas. Table 4 provides more detailed information about 
our site visit interviews. 

Table 4: Site Visit Interviews: 

City: Ann Arbor, Michigan; 

Organization: Ann Arbor/Ypsilanti Regional Chamber; 
Description: Business organization. 

Organization: Ann Arbor Downtown Development Authority; 
Description: Local government. 

Organization: Ann Arbor Transportation Authority (Bus); 
Description: Transit agency. 

Organization: getDowntown; 
Description: Intergovernmental agency. 

Organization: Mayor, City of Ann Arbor; 
Description: Local government. 

Organization: Partners for Transit; 
Description: Community group. 

Organization: Transportation Planning Program, City of Ann Arbor; 
Description: Local government. 

Organization: University of Michigan; 
Description: Large employer in Ann Arbor. 

Organization: Washtenaw Area Transportation Study; 
Description: Local transportation planning organization. 

City: Washington, D.C.; 

Organization: District Department of Transportation; 
Description: Local government. 

Organization: Greater Greater Washington; 
Description: Community group. 

Organization: Greater Washington Board of Trade; 
Description: Business organization. 

Organization: Hotel Association of Washington, D.C.; 
Description: Business organization. 

Organization: Metropolitan Washington Council of Governments; 
Description: Metropolitan planning organization. 

Organization: Washington Metropolitan Area Transit Authority (Heavy 
Rail)[A]; 
Description: Transit agency. 

City: Sacramento, California; 

Organization: Friends of Light Rail & Transit; 
Description: Community group. 

Organization: Sacramento Area Council of Governments; 
Description: Metropolitan planning organization. 

Organization: Department of Transportation, City of Sacramento; 
Description: Local government. 

Organization: Sacramento Metro Chamber; 
Description: Business organization. 

Organization: Sacramento Regional Transit District (Light Rail)[A]; 
Description: Transit agency. 

Source: GAO. 

[A] Transit agency also provides other types of transit services, but 
our interview focused on the type of transit service indicated. 

[End of table] 

We conducted in-depth telephone interviews with officials from the 
remaining 12 transit agencies, as outlined in table 5. 

Table 5: Transit Agency Interviews: 

City: Chicago, Illinois; 
Transit agency: Chicago Transit Authority; 
Type of service[A]: Heavy rail: [Check]; 
Type of service[A]: Light rail: [Empty]; 
Type of service[A]: Bus: [Empty]. 

City: Dallas, Texas; 
Transit agency: Dallas Area Rapid Transit; 
Type of service[A]: Heavy rail: [Empty]; 
Type of service[A]: Light rail: [Check]; 
Type of service[A]: Bus: [Empty]. 

City: Denver, Colorado; 
Transit agency: Regional Transportation District; 
Type of service[A]: Heavy rail: [Empty]; 
Type of service[A]: Light rail: [Check]; 
Type of service[A]: Bus: [Empty]. 

City: Frederick, Maryland; 
Transit agency: TransIT Services of Frederick County; 
Type of service[A]: Heavy rail: [Empty]; 
Type of service[A]: Light rail: [Empty]; 
Type of service[A]: Bus: [Check]. 

City: Ithaca, New York; 
Transit agency: Tompkins Consolidated Area Transit; 
Type of service[A]: Heavy rail: [Empty]; 
Type of service[A]: Light rail: [Empty]; 
Type of service[A]: Bus: [Check]. 

City: Los Angeles, California; 
Transit agency: Los Angeles County Metropolitan Transportation 
Authority; 
Type of service[A]: Heavy rail: [Check]; 
Type of service[A]: Light rail: [Empty]; 
Type of service[A]: Bus: [Empty]. 

City: Merced, California; 
Transit agency: Merced County Transit; 
Type of service[A]: Heavy rail: [Empty]; 
Type of service[A]: Light rail: [Empty]; 
Type of service[A]: Bus: [Check]. 

City: New York, New York; 
Transit agency: Metropolitan Transportation Authority; 
Type of service[A]: Heavy rail: [Check]; 
Type of service[A]: Light rail: [Empty]; 
Type of service[A]: Bus: [Empty]. 

City: Newark, New Jersey; 
Transit agency: NJ Transit; 
Type of service[A]: Heavy rail: [Empty]; 
Type of service[A]: Light rail: [Check]; 
Type of service[A]: Bus: [Empty]. 

City: Palm Bay-Melbourne, Florida; 
Transit agency: Space Coast Area Transit; 
Type of service[A]: Heavy rail: [Empty]; 
Type of service[A]: Light rail: [Empty]; 
Type of service[A]: Bus: [Check]. 

City: Portland, Oregon; 
Transit agency: TriMet; 
Type of service[A]: Heavy rail: [Empty]; 
Type of service[A]: Light rail: [Check]; 
Type of service[A]: Bus: [Empty]. 

City: San Francisco, California; 
Transit agency: Bay Area Rapid Transit; 
Type of service[A]: Heavy rail: [Check]; 
Type of service[A]: Light rail: [Empty]; 
Type of service[A]: Bus: [Empty]. 

Source: GAO. 

[A] While these transit agencies may also provide other types of 
transit services, our interview focused on the type of transit service 
indicated. 

[End of table] 

In addition, we reviewed relevant literature and agency-provided 
documentation, met with officials from FTA, and interviewed 
transportation researchers and industry and advocacy groups, including 
the following: 

* America 2050: 

* American Public Transportation Association: 

* National Association of City Transportation Officials: 

* U.S. Chamber of Commerce: 

We also reviewed prior GAO, Congressional Research Service, and 
Congressional Budget Office reports, as appropriate. 

To identify what factors might affect future ridership demand and the 
ability of transit agencies to meet that demand, we reviewed relevant 
literature, interviewed FTA officials, and spoke with the transit 
agency officials and stakeholders identified above. We also reviewed 
relevant documentation provided by these sources and prior GAO reports. 

We conducted this performance audit from December 2009 through 
November 2010 in accordance with generally accepted government 
auditing standards. Those standards require that we plan and perform 
the audit to obtain sufficient, appropriate evidence to provide a 
reasonable basis for our findings and conclusions based on our audit 
objectives. We believe that the evidence obtained provides a 
reasonable basis for our findings and conclusions based on our audit 
objectives. 

[End of section] 

Appendix II: Analyzing the Effect of New York City on National Transit 
Trends: 

We conducted an analysis to determine whether the heavy rail and bus 
system in New York City, New York, is distorting national transit 
trends because it comprised about one-third of unlinked passenger 
trips (UPT)[Footnote 88] in the United States in 2008. We examined the 
size of various measures of service use and output, expenses, and 
revenue sources. We found that, with a few exceptions, the omission or 
inclusion of the New York City data does not distort the national 
trends. 

Methodology: 

We used the National Transit Database (NTD)[Footnote 89] data for 1998 
through 2008, which contain information on service use and output, 
expenses, and revenue sources. In order to identify New York City's 
transit agencies, we used the criteria used by the American Public 
Transportation Association; namely, the services provided by the 
Metropolitan Transportation Authority (MTA) in New York City. We 
examined: 

* United States national values: 

* United States national values omitting the MTA New York City transit 
agency: 

* MTA New York City transit agency values: 

Results of Analysis: 

Growth in Service Output and Service Use: 

General Comments: 

* Whereas in 2008, New York City comprised over one-third of the 
nation's UPTs, results differ for its heavy rail and bus services. 

- New York City's heavy rail system accounted for about 69 percent of 
the nation's heavy rail UPTs in 2008. 

- In contrast, New York City's buses accounted for about 17 percent of 
the nation's bus UPTs in 2008. 

* Given the difference in relative share of these modes nationally, it 
is unsurprising that including New York City makes a bigger difference 
to calculations of service use or output for heavy rail than for buses. 

Results--Heavy Rail and Bus Combined (New York City has no light rail 
service): 

* Growth in service output as measured by vehicle revenue miles 
(VRM)[Footnote 90] and vehicle revenue hours (VRH)[Footnote 91] was 
similar when we compared total values for the United States with total 
values for the United States excluding New York City. 

- Total VRM grew by about 20 percent nationwide; it grew by about 22 
percent for the United States excluding New York City. 

- Total VRH grew by about 23 percent nationwide; it grew by about 25 
percent for the United States excluding New York City. 

* Growth in service use as measured by passenger miles traveled (PMT) 
[Footnote 92] was similar when we compared total values for the United 
States with total values for the United States excluding New York 
City. Total PMT grew by about 28 percent nationwide and by about 25 
percent for the United States excluding New York City. 

* Growth in service use as measured by UPTs was somewhat different 
when we compared total values for the United States with total values 
for the United States excluding New York City. Total UPTs grew by 
about 27 percent nationwide, but only by about 18 percent for the 
United States excluding New York City.[Footnote 93] 

Results--Heavy Rail and Bus Separated: 

* Service output--analyzing the data at the mode level (heavy rail and 
bus) there were some differences between the United States and the 
United States excluding New York City. 

- For heavy rail, both VRMs and VRHs grew much more slowly in New York 
City as compared with the national trend. Because New York City heavy 
rail comprised more than half the nation's VRMs in 2008, this 
disparity also showed up in the difference between heavy rail VRMs 
nationwide. VRMs grew by about 19 percent nationwide, whereas heavy 
rail in the United States excluding New York City grew by about 26 
percent. 

- For heavy rail, VRHs exhibited a similar and even wider difference 
in growth rates; nationwide, VRHs grew by about 21 percent. In the 
United States excluding New York City, VRHs grew by about 31 percent. 

- For buses, the growth rate nationwide was similar to that of the 
United States excluding New York City. For VRMs, the growth rates were 
about 18 and 19 percent respectively; and for VRHs, the growth rates 
were both about 22 percent. 

* Service use--analyzing the data at the mode level (heavy rail and 
bus) there were some differences between the United States and the 
United States excluding New York City, especially for UPTs. 

- For heavy rail, growth measured by PMT was similar when we compared 
total values for the United States with total values for the United 
States excluding New York City. Total PMT grew by about 37 percent 
nationwide and by about 39 percent for the United States excluding New 
York City. 

- For heavy rail, growth measured by UPTs was quite different when we 
compared total values for the United States with total values for the 
United States excluding New York City. Heavy rail UPTs grew by about 
48 percent nationwide and by about 31 percent for the United States 
excluding New York City. 

- For buses, the growth rates of service were quite similar nationwide 
as compared with the United States excluding New York City. For PMT, 
total PMT grew by about 19 percent nationwide and by about 17 percent 
for the United States excluding New York City. However, for UPTs, 
total UPTs grew by about 15 percent nationwide and by about 12 percent 
for the United States excluding New York City. 

Growth in Operating Costs: 

* In general, excluding New York City from our calculations made 
little difference to growth rates of operating costs either in terms 
of mode or function. 

* Total growth rates were close for the United States as compared with 
the United States excluding New York. In the case of heavy rail, these 
rates were about 28 percent as compared with 26 percent, respectively, 
and in the case of bus these rates were about 37 percent and 35 
percent, respectively. 

* There were some differences in the vehicle maintenance category, 
[Footnote 94] which made a difference for bus, and in the general 
administration category,[Footnote 95] which made a difference for 
heavy rail. 

Growth in Capital Costs: 

* Capital costs may behave cyclically; for example, if rolling stock 
is of a common age and needs to be replaced at the same time. As a 
result, if New York City's transit capital is at a different phase of 
its cycle (different age or amount of use) as compared with the 
national average, one would expect differences in trends. 

* Total capital cost growth for all modes combined were not too 
different nationwide as compared with the United States excluding New 
York City; about 68 percent as compared with 71 percent, respectively. 

* For heavy rail, whereas there were some differences in the growth of 
capital cost components, the totals were generally similar for the 
United States as compared with the United States excluding New York 
City; about 92 percent and 101 percent, respectively. 

* For buses there were differences in capital costs for the United 
States as compared with the United States excluding New York City; 
about 5 percent and 13 percent, respectively. The primary driving 
factor of this difference was the approximate 58 percent reduction in 
capital spending for New York City. 

Funding Sources: 

In general, there was little impact on our calculation of funding 
source shares nationwide as compared with the United States excluding 
New York City. 

Data Tables: 

Tables 6 through 19 provide the data from which we derived our 
observations about the impact New York City has on national transit 
trends. 

Table 6: Growth in Service Output and Service Use, 1998-2008: United 
States National Trends and New York City: 

Unlinked passenger trips: Heavy rail; 
United States: 48.2%; 
United States except New York City: 30.6%; 
New York City: 58.1%. 

Unlinked passenger trips: Light rail; 
United States: 65.4%; 
United States except New York City: 65.4%; 
New York City: Not applicable. 

Unlinked passenger trips: Bus; 
United States: 14.6%; 
United States except New York City: 11.8%; 
New York City: 31.0%. 

Unlinked passenger trips: Total; 
United States: Vehicle revenue miles: 27.3%; 
United States except New York City: Vehicle revenue miles: 17.7%; 
New York City: Vehicle revenue miles: 49.7%. 

Vehicle revenue miles: Heavy rail; 
United States: 19.3%; 
United States except New York City: 26.5%; 
New York City: 13.6%. 

Vehicle revenue miles: Light rail; 
United States: 104.1%; 
United States except New York City: 104.1%; 
New York City: Not applicable. 

Vehicle revenue miles: Bus; 
United States: 18.4%; 
United States except New York City: 18.7%; 
New York City: 13.5%. 

Vehicle revenue miles: Total; 
United States: Vehicle revenue hours: 20.2%; 
United States except New York City: Vehicle revenue hours: 21.7%; 
New York City: Vehicle revenue hours: 13.6%. 

Vehicle revenue hours: Heavy rail; 
United States: 21.0%; 
United States except New York City: 31.4%; 
New York City: 14.6%. 

Vehicle revenue hours: Light rail; 
United States: 110.8%; 
United States except New York City: 110.8%; 
New York City: Not applicable. 

Vehicle revenue hours: Bus; 
United States: 21.9%; 
United States except New York City: 22.4%; 
New York City: 16.7%. 

Vehicle revenue hours: Total; 
United States: Passenger miles traveled: 23.3%; 
United States except New York City: Passenger miles traveled: 24.9%; 
New York City: Passenger miles traveled: 15.5%. 

Passenger miles traveled: Heavy rail; 
United States: 37.2%; 
United States except New York City: 39.1%; 
New York City: 35.9%. 

Passenger miles traveled: Light rail; 
United States: 86.6%; 
United States except New York City: 86.6%; 
New York City: Not applicable. 

Passenger miles traveled: Bus; 
United States: 18.6%; 
United States except New York City: 16.7%; 
New York City: 42.2%. 

Passenger miles traveled: Total; 
United States: United States: 28.3%; 
United States except New York City: United States except New York 
City: 25.1%; 
New York City: New York City: 36.8%. 

Source: GAO analysis of FTA NTD data. 

Note: There is no light rail run by the MTA New York City transit 
agency, only heavy rail and bus. 

[End of table] 

Table 7: Growth in Operating Costs by Function and Mode, 1998-2008: 
United States National Trends and New York City: 

Heavy rail: United States; 
Total: 28.1%; 
Vehicle operations: 33.9%; 
Vehicle maintenance: 32.0%; 
Nonvehicle maintenance: 30.4%; 
General administration: 5.6%. 

Heavy rail: United States not New York City; 
Total: 26.0%; 
Vehicle operations: 34.3%; 
Vehicle maintenance: 29.4%; 
Nonvehicle maintenance: 28.7%; 
General administration: 1.9%. 

Heavy rail: New York City; 
Total: Light rail: 30.1%; 
Vehicle operations: Light rail: 33.7%; 
Vehicle maintenance: Light rail: 34.7%; 
Nonvehicle maintenance: Light rail: 31.8%; 
General administration: Light rail: 10.1%. 

Light rail: United States; 
Total: 88.4%; 
Vehicle operations: 92.1%; 
Vehicle maintenance: 79.2%; 
Nonvehicle maintenance: 79.6%; 
General administration: 100.5%. 

Light rail: United States not New York City; 
Total: 88.4%; 
Vehicle operations: 92.1%; 
Vehicle maintenance: 79.2%; 
Nonvehicle maintenance: 79.6%; 
General administration: 100.5%. 

Light rail: New York City; 
Total: Not applicable; 
Vehicle operations: Not applicable; 
Vehicle maintenance: Not applicable; 
Nonvehicle maintenance: Not applicable; 
General administration: Not applicable. 

Bus: United States; 
Total: 36.5%; 
Vehicle operations: 42.2%; 
Vehicle maintenance: 31.0%; 
Nonvehicle maintenance: 35.9%; 
General administration: 24.7%. 

Bus: United States not New York City; 
Total: 34.5%; 
Vehicle operations: 40.3%; 
Vehicle maintenance: 25.8%; 
Nonvehicle maintenance: 30.7%; 
General administration: 26.7%. 

Bus: New York City; 
Total: Total: 52.2%; 
Vehicle operations: Total: 57.6%; 
Vehicle maintenance: Total: 65.8%; 
Nonvehicle maintenance: Total: 75.7%; 
General administration: Total: 7.8%. 

Total: United States; 
Total: 36.2%; 
Vehicle operations: 42.0%; 
Vehicle maintenance: 33.1%; 
Nonvehicle maintenance: 35.2%; 
General administration: 22.9%. 

Total: Unites States not New York City; 
Total: 35.6%; 
Vehicle operations: 41.5%; 
Vehicle maintenance: 29.0%; 
Nonvehicle maintenance: 34.8%; 
General administration: 26.0%. 

Total: New York; 
Total: Total: 38.4%; 
Vehicle operations: Vehicle operations: 44.1%; 
Vehicle maintenance: Vehicle maintenance: 49.3%; 
Nonvehicle maintenance: Nonvehicle maintenance: 35.8%; 
General administration: General administration: 9.2%. 

Source: GAO analysis of FTA NTD data. 

Note: There is no light rail run by the MTA New York City transit 
agency, only heavy rail and bus. 

[End of table] 

Table 8: Growth in Capital Costs by Function and Mode, 1998-2008: 
United States National Trends and New York City: 

Heavy rail: United States; 
Total: 92.3%; 
Rolling stock: 105.0%; 
Facilities: 86.2%; 
Other: 106.4%. 

Heavy rail: United States not New York City; 
Total: 100.6%; 
Rolling stock: 15.3%; 
Facilities: 169.0%; 
Other: 1.7%. 

Heavy rail: New York City; 
Total: Light rail: 84.9%; 
Rolling stock: Light rail: 238.8%; 
Facilities: Light rail: 32.5%; 
Other: Light rail: 343.2%. 

Light rail: United States; 
Total: 164.8%; 
Rolling stock: 74.2%; 
Facilities: 191.0%; 
Other: 172.0%. 

Light rail: United States not New York City; 
Total: 164.8%; 
Rolling stock: 74.2%; 
Facilities: 191.0%; 
Other: 172.0%. 

Light rail: New York City; 
Total: Bus: Not applicable; 
Rolling stock: Bus: Not applicable; 
Facilities: Bus: Not applicable; 
Other: Bus: Not applicable. 

Bus: United States; 
Total: 4.7%; 
Rolling stock: 1.4%; 
Facilities: 9.2%; 
Other: 6.6%. 

Bus: United States not New York City; 
Total: 12.6%; 
Rolling stock: 18.2%; 
Facilities: 7.2%; 
Other: 6.6%. 

Bus: New York City; 
Total: Total: -58.2%; 
Rolling stock: Total: -87.4%; 
Facilities: Total: 30.4%; 
Other: Total: 0.0. 

Total: United States; 
Total: 68.1%; 
Rolling stock: 33.4%; 
Facilities: 91.0%; 
Other: 62.2%. 

Total: United States not New York City; 
Total: 71.2%; 
Rolling stock: 25.3%; 
Facilities: 121.0%; 
Other: 19.3%. 

Total: New York City; 
Total: Total: 59.7%; 
Rolling stock: Rolling stock: 66.4%; 
Facilities: Facilities: 32.4%; 
Other: Other: 343.2%. 

Source: GAO analysis of FTA NTD data. 

Note: There is no light rail run by the MTA New York City transit 
agency, only heavy rail and bus. 

[End of table] 

Table 9: United States Percentage of Total Funding for Operating and 
Capital Expenditure Combined by Source: 

Calendar year: 1998; 
Federal: 16.9%; 
State: 18.0%; 
Local: 32.5%; 
Other: 34.5%. 

Calendar year: 1999; 
Federal: 16.0%; 
State: 18.2%; 
Local: 34.8%; 
Other: 32.8%. 

Calendar year: 2000; 
Federal: 17.3%; 
State: 17.8%; 
Local: 34.0%; 
Other: 33.0%. 

Calendar year: 2001; 
Federal: 19.5%; 
State: 18.1%; 
Local: 34.0%; 
Other: 30.4%. 

Calendar year: 2002; 
Federal: 17.3%; 
State: 20.7%; 
Local: 34.3%; 
Other: 29.4%. 

Calendar year: 2003; 
Federal: 17.5%; 
State: 20.1%; 
Local: 35.2%; 
Other: 28.8%. 

Calendar year: 2004; 
Federal: 17.6%; 
State: 19.7%; 
Local: 34.6%; 
Other: 29.3%. 

Calendar year: 2005; 
Federal: 16.9%; 
State: 20.2%; 
Local: 34.5%; 
Other: 29.2%. 

Calendar year: 2006; 
Federal: 18.6%; 
State: 19.8%; 
Local: 32.9%; 
Other: 29.0%. 

Calendar year: 2007; 
Federal: 17.1%; 
State: 20.0%; 
Local: 35.6%; 
Other: 27.4%. 

Calendar year: 2008; 
Federal: 17.1%; 
State: 21.7%; 
Local: 34.9%; 
Other: 26.4%. 

Source: GAO analysis of FTA NTD data. 

Note: The data for each year may not add to 100 percent because we do 
not show the values for reconciliation. Purchased transportation is 
reported to the NTD in two different ways: (i) all service purchased 
is reported by the buyer of service, or (ii) the purchased service is 
reported by the seller. When the latter situation occurs, the funds 
used to pay for contract costs are reported by both the buyer and 
seller. Reconciliation values eliminate these double-counted data. 

[End of table] 

Table 10: United States, Except New York City, Percentage of Total 
Funding for Operating and Capital Expenditure Combined by Source: 

Calendar year: 1998; 
Federal: 17.6%; 
State: 19.0%; 
Local: 33.3%; 
Other: 32.4%. 

Calendar year: 1999; 
Federal: 17.6%; 
State: 19.1%; 
Local: 34.7%; 
Other: 31.0%. 

Calendar year: 2000; 
Federal: 18.9%; 
State: 19.0%; 
Local: 34.5%; 
Other: 30.1%. 

Calendar year: 2001; 
Federal: 20.5%; 
State: 18.4%; 
Local: 34.7%; 
Other: 29.0%. 

Calendar year: 2002; 
Federal: 18.9%; 
State: 21.4%; 
Local: 33.3%; 
Other: 28.4%. 

Calendar year: 2003; 
Federal: 19.2%; 
State: 21.6%; 
Local: 34.9%; 
Other: 26.2%. 

Calendar year: 2004; 
Federal: 19.2%; 
State: 21.1%; 
Local: 34.4%; 
Other: 26.8%. 

Calendar year: 2005; 
Federal: 17.9%; 
State: 21.4%; 
Local: 34.7%; 
Other: 26.9%. 

Calendar year: 2006; 
Federal: 19.2%; 
State: 21.0%; 
Local: 33.5%; 
Other: 26.7%. 

Calendar year: 2007; 
Federal: 18.3%; 
State: 19.7%; 
Local: 36.4%; 
Other: 25.8%. 

Calendar year: 2008; 
Federal: 17.7%; 
State: 20.7%; 
Local: 36.5%; 
Other: 25.2%. 

Source: GAO analysis of FTA NTD data. 

Note: The data for each year may not add to 100 percent because we do 
not show the values for reconciliation. Purchased transportation is 
reported to the NTD in two different ways: (i) all service purchased 
is reported by the buyer of service, or (ii) the purchased service is 
reported by the seller. When the latter situation occurs, the funds 
used to pay for contract costs are reported by both the buyer and 
seller. Reconciliation values eliminate these double-counted data. 

[End of table] 

Table 11: New York City, Percentage of Total Funding for Operating and 
Capital Expenditure Combined by Source: 

Calendar year: 1998; 
Federal: 13.6%; 
State: 13.2%; 
Local: 29.1%; 
Other: 44.1%. 

Calendar year: 1999; 
Federal: 8.8%; 
State: 14.3%; 
Local: 35.5%; 
Other: 41.4%. 

Calendar year: 2000; 
Federal: 9.5%; 
State: 12.2%; 
Local: 31.5%; 
Other: 46.8%. 

Calendar year: 2001; 
Federal: 14.8%; 
State: 17.1%; 
Local: 30.8%; 
Other: 37.3%. 

Calendar year: 2002; 
Federal: 9.5%; 
State: 17.5%; 
Local: 38.8%; 
Other: 34.2%. 

Calendar year: 2003; 
Federal: 9.5%; 
State: 13.0%; 
Local: 36.2%; 
Other: 41.3v. 

Calendar year: 2004; 
Federal: 9.8%; 
State: 13.3%; 
Local: 35.3%; 
Other: 41.5%. 

Calendar year: 2005; 
Federal: 11.8%; 
State: 14.3%; 
Local: 33.5%; 
Other: 40.4%. 

Calendar year: 2006; 
Federal: 15.5%; 
State: 13.5%; 
Local: 29.9%; 
Other: 41.2%. 

Calendar year: 2007; 
Federal: 12.4%; 
State: 21.5%; 
Local: 32.1%; 
Other: 34.0%. 

Calendar year: 2008; 
Federal: 14.8%; 
State: 25.7%; 
Local: 28.4%; 
Other: 31.2%. 

Source: GAO analysis of FTA NTD data. 

[End of table] 

Table 12: All United States, Percentage of Total Funding for Operating 
Expenditure by Source: 

Calendar year: 1998; 
Fares: 39.3%; 
Federal: 4.0%; 
State: 20.4%; 
Local: 30.1%; 
Other: 8.9%. 

Calendar year: 1999; 
Fares: 38.1%; 
Federal: 4.3%; 
State: 21.6%; 
Local: 30.3%; 
Other: 8.4%. 

Calendar year: 2000; 
Fares: 37.5%; 
Federal: 4.6%; 
State: 20.8%; 
Local: 30.5%; 
Other: 9.5%. 

Calendar year: 2001; 
Fares: 36.3%; 
Federal: 4.9%; 
State: 22.3%; 
Local: 31.1%; 
Other: 8.6%. 

Calendar year: 2002; 
Fares: 34.4%; 
Federal: 5.4%; 
State: 25.3%; 
Local: 28.4%; 
Other: 9.0%. 

Calendar year: 2003; 
Fares: 34.2%; 
Federal: 6.3%; 
State: 23.8%; 
Local: 29.1%; 
Other: 9.0%. 

Calendar year: 2004; 
Fares: 34.5%; 
Federal: 7.5%; 
State: 22.5%; 
Local: 29.4%; 
Other: 7.9%. 

Calendar year: 2005; 
Fares: 33.8%; 
Federal: 7.8%; 
State: 23.3%; 
Local: 29.1%; 
Other: 7.1%. 

Calendar year: 2006; 
Fares: 33.9%; 
Federal: 8.2%; 
State: 22.5%; 
Local: 29.0%; 
Other: 6.9%. 

Calendar year: 2007; 
Fares: 31.5%; 
Federal: 7.5%; 
State: 23.6%; 
Local: 31.0%; 
Other: 6.6%. 

Calendar year: 2008; 
Fares: 31.3%; 
Federal: 7.1%; 
State: 25.8%; 
Local: 29.5%; 
Other: 6.4%. 

Source: GAO analysis of FTA NTD data. 

[End of table] 

Table 13: All United States, Except New York City, Percentage of Total 
Funding for Operating Expenditure by Source: 

Calendar year: 1998; 
Fares: 34.6%; 
Federal: 4.7%; 
State: 20.5%; 
Local: 33.2%; 
Other: 10.1%. 

Calendar year: 1999; 
Fares: 33.9%; 
Federal: 5.1%; 
State: 21.6%; 
Local: 33.0%; 
Other: 9.5%. 

Calendar year: 2000; 
Fares: 33.4%; 
Federal: 5.6%; 
State: 21.5%; 
Local: 33.8%; 
Other: 9.4%. 

Calendar year: 2001; 
Fares: 32.7%; 
Federal: 5.9%; 
State: 21.5%; 
Local: 34.0%; 
Other: 9.8%. 

Calendar year: 2002; 
Fares: 30.7%; 
Federal: 6.4%; 
State: 24.6%; 
Local: 31.0%; 
Other: 10.2%. 

Calendar year: 2003; 
Fares: 29.9%; 
Federal: 7.5%; 
State: 24.5%; 
Local: 32.0%; 
Other: 9.0%. 

Calendar year: 2004; 
Fares: 30.0%; 
Federal: 9.0%; 
State: 22.9%; 
Local: 31.9%; 
Other: 8.3%. 

Calendar year: 2005; 
Fares: 29.6%; 
Federal: 9.4%; 
State: 23.8%; 
Local: 30.7%; 
Other: 7.9%. 

Calendar year: 2006; 
Fares: 29.8%; 
Federal: 9.8%; 
State: 23.1%; 
Local: 30.4%; 
Other: 7.5%. 

Calendar year: 2007; 
Fares: 28.6%; 
Federal: 9.3%; 
State: 22.1%; 
Local: 32.9%; 
Other: 7.3%. 

Calendar year: 2008; 
Fares: 28.6%; 
Federal: 8.7%; 
State: 23.0%; 
Local: 32.7%; 
Other: 7.2%. 

Source: GAO analysis of FTA NTD data. 

[End of table] 

Table 14: New York City, Percentage of Total Funding for Operating 
Expenditure by Source: 

Calendar year: 1998; 
Fares: 62.6%; 
Federal: 0.0%; 
State: 19.5%; 
Local: 15.0%; 
Other: 2.8%. 

Calendar year: 1999; 
Fares: 58.9%; 
Federal: 0.0; 
State: 21.4%; 
Local: 16.6%; 
Other: 3.1%. 

Calendar year: 2000; 
Fares: 57.8%; 
Federal: 0.0; 
State: 17.7%; 
Local: 14.7%; 
Other: 9.9v. 

Calendar year: 2001; 
Fares: 54.1%; 
Federal: 0.0; 
State: 26.0; 
Local: 17.1%; 
Other: 2.8%. 

Calendar year: 2002; 
Fares: 53.1%; 
Federal: 0.0; 
State: 28.7%; 
Local: 15.2%; 
Other: 3.0%. 

Calendar year: 2003; 
Fares: 56.0%; 
Federal: 0.0; 
State: 20.5%; 
Local: 14.4%; 
Other: 9.1%. 

Calendar year: 2004; 
Fares: 57.2%; 
Federal: 0.0; 
State: 20.2%; 
Local: 16.7%; 
Other: 5.9%. 

Calendar year: 2005; 
Fares: 54.8%; 
Federal: 0.0; 
State: 20.6%; 
Local: 21.2%; 
Other: 3.4%. 

Calendar year: 2006; 
Fares: 55.4%; 
Federal: 0.0; 
State: 19.2%; 
Local: 21.6%; 
Other: 3.8%. 

Calendar year: 2007; 
Fares: 43.4v; 
Federal: 0.0; 
State: 29.7%; 
Local: 23.3%; 
Other: 3.5%. 

Calendar year: 2008; 
Fares: 42.5%; 
Federal: 0.0; 
State: 37.7%; 
Local: 16.5%; 
Other: 3.3. 

Source: GAO analysis of FTA NTD data. 

[End of table] 

Table 15: United States Percentage of Total Funding for Capital 
Expenditure by Source: 

Calendar year: 1998; 
Federal: 49.7%; 
State: 11.8%; 
Local: 38.5%; 
Other: 0.0%. 

Calendar year: 1999; 
Federal: 44.1%; 
State: 10.2%; 
Local: 45.7%; 
Other: 0.0. 

Calendar year: 2000; 
Federal: 47.2%; 
State: 10.7%; 
Local: 42.0%; 
Other: 0.0. 

Calendar year: 2001; 
Federal: 50.5%; 
State: 9.3%; 
Local: 40.1%; 
Other: 0.0. 

Calendar year: 2002; 
Federal: 40.6%; 
State: 11.6%; 
Local: 45.8%; 
Other: 1.9%. 

Calendar year: 2003; 
Federal: 39.9%; 
State: 12.7%; 
Local: 47.2%; 
Other: 0.2%. 

Calendar year: 2004; 
Federal: 39.0%; 
State: 13.9%; 
Local: 45.7%; 
Other: 1.3%. 

Calendar year: 2005; 
Federal: 39.0%; 
State: 12.6%; 
Local: 47.8%; 
Other: 0.7%. 

Calendar year: 2006; 
Federal: 43.5%; 
State: 13.3%; 
Local: 42.3%; 
Other: 0.8%. 

Calendar year: 2007; 
Federal: 41.0v; 
State: 11.2%; 
Local: 47.0%; 
Other: 0.9%. 

Calendar year: 2008; 
Federal: 39.9%; 
State: 12.3%; 
Local: 47.1%; 
Other: 0.7%. 

Source: GAO analysis of FTA NTD data. 

[End of table] 

Table 16: United States Except, New York City, Percentage of Total 
Funding for Capital Expenditure by Source: 

Calendar year: 1998; 
Federal: 51.7%; 
State: 14.8%; 
Local: 33.5%; 
Other: 0.0%. 

Calendar year: 1999; 
Federal: 48.5%; 
State: 12.7%; 
Local: 38.8%; 
Other: 0.0. 

Calendar year: 2000; 
Federal: 50.8%; 
State: 13.1%; 
Local: 36.1%; 
Other: 0.0. 

Calendar year: 2001; 
Federal: 52.3%; 
State: 11.5%; 
Local: 36.2%; 
Other: 0.0. 

Calendar year: 2002; 
Federal: 44.9%; 
State: 14.7%; 
Local: 38.0%; 
Other: 2.5%. 

Calendar year: 2003; 
Federal: 43.1%; 
State: 15.7%; 
Local: 41.0%; 
Other: 0.3%. 

Calendar year: 2004; 
Federal: 41.4%; 
State: 17.0%; 
Local: 40.0%; 
Other: 1.7%. 

Calendar year: 2005; 
Federal: 39.0%; 
State: 15.4%; 
Local: 44.8%; 
Other: 0.8%. 

Calendar year: 2006; 
Federal: 42.1%; 
State: 15.9%; 
Local: 41.0%; 
Other: 1.0%. 

Calendar year: 2007; 
Federal: 40.1%; 
State: 13.7%; 
Local: 45.2%; 
Other: 1.1%. 

Calendar year: 2008; 
Federal: 38.2%; 
State: 15.5%; 
Local: 45.4%; 
Other: 0.9%. 

Source: GAO analysis of FTA NTD data. 

[End of table] 

Table 17: New York City, Percentage of Total Funding for Capital 
Expenditure by Source: 

Calendar year: 1998; 
Federal: 41.8%; 
State: 0.0%; 
Local: 58.2%; 
Other: 0.0%. 

Calendar year: 1999; 
Federal: 26.6%; 
State: 0.0; 
Local: 73.4%; 
Other: 0.0. 

Calendar year: 2000; 
Federal: 30.8%; 
State: 0.0; 
Local: 69.2%; 
Other: 0.0. 

Calendar year: 2001; 
Federal: 43.0%; 
State: 0.0; 
Local: 57.0%; 
Other: 0.0. 

Calendar year: 2002; 
Federal: 24.4%; 
State: 0.0; 
Local: 75.6%; 
Other: 0.0. 

Calendar year: 2003; 
Federal: 26.0%; 
State: 0.0; 
Local: 74.0%; 
Other: 0.0. 

Calendar year: 2004; 
Federal: 28.8%; 
State: 0.0; 
Local: 71.2%; 
Other: 0.0. 

Calendar year: 2005; 
Federal: 38.7%; 
State: 0.0; 
Local: 61.3%; 
Other: 0.0. 

Calendar year: 2006; 
Federal: 50.7%; 
State: 0.6%; 
Local: 48.7%; 
Other: 0.0. 

Calendar year: 2007; 
Federal: 44.9%; 
State: 0.0; 
Local: 55.0%; 
Other: 0.0. 

Calendar year: 2008; 
Federal: 46.3%; 
State: 0.0; 
Local: 53.7%; 
Other: 0.0. 

Source: GAO analysis of FTA NTD data. 

[End of table] 

Table 18: Unlinked Passenger Trips in 2008: United States Compared 
with New York City: 

Unlinked passenger trips: Heavy rail; 
United States: 3,547,345,422; 
New York City: 2,428,308,510; 
New York City as a percentage of United States: 68.5%. 

Unlinked passenger trips: Bus; 
United States: 5,447,524,557; 
New York City: 902,640,956; 
New York City as a percentage of United States: 16.6%. 

Unlinked passenger trips: Light rail; 
United States: 451,350,051; 
New York City: None; 
New York City as a percentage of United States: 0%. 

Unlinked passenger trips: Total; 
United States: United States: 9,446,220,030; 
New York City: New York City: 3,330,949,466; 
New York City as a percentage of United States: New York City as a 
percentage of United States: 35.3%. 

Source: GAO analysis of FTA NTD data. 

Note: There is no light rail run by the MTA New York City transit 
agency, only heavy rail and bus. 

[End of table] 

Table 19: Vehicle Revenue Miles in 2008: United States Compared with 
New York City: 

Vehicle revenue miles: Heavy rail; 
United States: 655,416,365; 
New York City: 347,416,429; 
New York City as a percentage of United States: 53.0%. 

Source: GAO analysis of FTA NTD data. 

Note: There is no light rail run by the MTA New York City transit 
agency, only heavy rail and bus. 

[End of table] 

[End of section] 

Appendix III: GAO Contact and Staff Acknowledgments: 

GAO Contact: 

David Wise, (202) 512-5731 or wised@gao.gov: 

Staff Acknowledgments: 

In addition to the individual named above, other key contributors to 
this report were Steve Cohen, Assistant Director; Lauren Calhoun; Jean 
Cook; Colin Fallon; Elba Garcia; Brandon Haller; Michael Kendix; 
Catherine Kim; Mary Koenen; and Joshua Ormond. 

[End of section] 

Footnotes: 

[1] Pub. L. No. 109-59, 119 Stat. 1144 (2005). 

[2] According to the National Transit Database (NTD), heavy rail 
service is characterized by high-speed and rapid acceleration 
passenger rail cars operating singly or in multicar trains on fixed 
electric rails; separate rights-of-way from which all other traffic is 
excluded; sophisticated signaling; high platform loading; and a heavy 
passenger volume. Light rail service is characterized by an electric 
railway with a lower passenger volume compared to heavy rail, 
passenger cars operating singly (or in short, two-car trains) on fixed 
rails in shared or exclusive right-of-way; low or high platform 
loading, and vehicle power drawn from an overhead electric wire. Bus 
service operates on fixed routes and schedules over existing roadways. 

[3] Recipients and beneficiaries of grants from FTA under the 
Urbanized Area Formula Program (49 U.S.C. § 5307) or Other than 
Urbanized Area (Rural) Formula Program (49 U.S.C. § 5311) are required 
by statute to submit data to the NTD. 49 U.S.C. § 5335. Over 700 
urbanized area transit providers and over 1,300 rural transit 
providers report to the NTD on a variety of variables, including 
information on all funds applied to transit, such as federal, state, 
local, and other funds. FTA estimates that the NTD represents over 95 
percent of public transportation in urbanized areas. 

[4] NTD data analyses were adjusted for inflation, where appropriate. 

[5] Urbanized areas (as defined by the U.S. Census Bureau) are densely 
settled territories that contain 50,000 or more people. 

[6] The remaining trips were made by walking and other means, while 
some people worked from home. 

[7] Public surveys also indicate that a common response to gasoline 
price increases is to use transit more often. 

[8] From 1998 through 2008, the average price per gallon increased 
from $1.06 to $3.27 across the country. 

[9] While transit agencies rely on revenue from passenger fares to 
help provide service, passenger fares do not cover the full cost of 
providing transit service. For example, in 2008, according to the NTD, 
approximately 32 percent of transit agencies' operating expenses were 
paid for through fare revenues. 

[10] 23 U.S.C. § 149. When CMAQ funds are designated for transit 
projects, funds are transferred from FHWA to FTA. See GAO, Highway and 
Transit Investments: Flexible Funding Supports State and Local 
Transportation Priorities and Multimodal Planning, GAO-07-772 
(Washington, D.C.: July 26, 2007). 

[11] See 23 U.S.C. § 126(c). 

[12] Pub. L. No. 109-59, 119 Stat. 1144 (2005). 

[13] Pub. L. No. 111-147, § 411, 124 Stat. 71, 78 (2010). 

[14] The NTD defines PMT as the cumulative sum of the distances ridden 
by each passenger. As part of our data reliability assessment, we 
conducted an analysis to determine what effect, if any, New York 
City's Metropolitan Transportation Authority (MTA) had on national 
transit trends, since New York City comprises a large portion of 
ridership in the United States. We found that PMT as a measure of 
ridership were not greatly affected by the inclusion or omission of 
the MTA's data. See appendix II for a detailed description of this 
analysis. 

[15] Since buses and heavy rail account for the vast majority of PMT, 
they comprise a larger proportion of the ridership increases for heavy 
rail, light rail, and bus systems combined. 

[16] The NTD defines VRMs as the miles a transit vehicle travels while 
in revenue service--that is, when the vehicle is available to the 
public with the expectation of carrying passengers. 

[17] These figures have been adjusted for inflation. 

[18] According to the NTD, sources of funds (operating and capital) 
include assistance (local, state, and federal) and funds generated by 
the service providers (fares and contract revenues). 

[19] By mode, capital costs grew most rapidly for heavy rail and light 
rail from 1998 through 2008 (at about 92 percent and 165 percent, 
respectively), whereas capital costs for buses remained relatively 
steady over this period. 

[20] By mode, operating costs for light rail grew at a faster rate 
than either heavy rail or bus from 1998 through 2008. During this 
period, operating costs grew by about 88 percent for light rail, 28 
percent for heavy rail, and 37 percent for bus. 

[21] Our analysis of transit agency revenues consists of funds applied 
to transit operations and capital investments. From 1998 through 2008, 
funds applied to transit operations increased by about 43 percent and 
funds applied to capital investments increased by about 60 percent. 

[22] Complete NTD data on revenues are not available by mode for the 
time period we studied. Therefore, our analyses of transit revenues 
represents all transit agencies that report to the NTD, which include 
heavy rail, light rail, and bus, as well as commuter rail, demand 
response, and vanpool. 

[23] According to the NTD, sources of operating funds include fare 
revenues, federal assistance, state assistance, local assistance, and 
other funds. Other funds can include subsidies from other sectors of 
operations and directly levied taxes, among other things. 

[24] The NTD defines capital funds as the funds that transit agencies 
receive from federal, state, local, and directly generated sources and 
that are applied to capital projects. Directly generated sources 
include any funds generated or donated directly to the transit agency 
including passenger fares, advertising revenues, and donations and 
grants from private entities. 

[25] The NTD defines fare revenues as the funds earned through 
carrying passengers. The farebox recovery ratio is the percentage of 
operating funds applied (operating expenses) paid through fare 
revenues. Total farebox revenue growth was considerably less than the 
growth in total operating costs from 1998 through 2008, about 14 
percent compared with about 43 percent. Since farebox revenue grew 
slower than operating costs, the farebox recovery ratio has fallen 
during this period. 

[26] GAO, Transit Rail: Potential Rail Car Cost-Saving Strategies 
Exist, [hyperlink, http://www.gao.gov/products/GAO-10-730] 
(Washington, D.C.: June 30, 2010). 

[27] Heavy rail and light rail agencies typically require large 
investments in transit infrastructure (e.g., track, signaling and 
communication systems, complex maintenance facilities, passenger 
stations, etc.) in comparison to bus systems. 

[28] The Americans with Disabilities Act of 1990 sets a variety of 
standards for addressing discrimination against individuals with 
disabilities. See 42 U.S.C. § 12101. 

[29] Transit-oriented developments are seen as compact, mixed-use, 
walkable neighborhoods located near transit facilities. See GAO, 
Affordable Housing in Transit-Oriented Development: Key Practices 
Could Enhance Recent Collaboration Efforts between DOT-FTA and HUD, 
[hyperlink, http://www.gao.gov/products/GAO-09-871] (Washington, D.C.: 
Sept. 9, 2009), and Public Transportation: Federal Role in Value 
Capture Strategies for Transit Is Limited, but Additional Guidance 
Could Help Clarify Policies, [hyperlink, 
http://www.gao.gov/products/GAO-10-781] (Washington, D.C.: July 29, 
2010). 

[30] We have previously reported that plans for transit stations and 
amenities commonly found in transit-oriented developments generally 
increase nearby land and housing values. See [hyperlink, 
http://www.gao.gov/products/GAO-09-871]. 

[31] For the purposes of this report, transportation-disadvantaged 
populations can include numerous categories of people without personal 
vehicles, such as: the elderly and persons with disabilities who have 
mobility impairments that preclude them from driving or who need 
medical equipment in order to travel; low-income, homeless, or 
transient persons who do not have a permanent residence or who do not 
own or have access to a personal vehicle; children without an adult 
present during a disaster; tourists and commuters who are frequent 
users of public transportation; those with limited English proficiency 
who tend to rely on public transit more than English speakers; or 
those who, for any other reason, do not own or have access to a 
personal vehicle. 

[32] Complementary paratransit service generally means providing 
paratransit services to individuals with disabilities that is 
comparable to the level of designated public transportation services 
provided to individuals without disabilities. The Americans with 
Disabilities Act of 1990 considers it discrimination for a public 
entity that operates a fixed route system (other than a system which 
provides solely commuter bus service) to fail to provide this 
complementary paratransit service. 42 U.S.C. § 12143. See also 49 
C.F.R. part 73, subpart F. 

[33] See GAO, Transportation Accessibility: Lack of Data and Limited 
Enforcement Options Limit Federal Oversight, [hyperlink, 
http://www.gao.gov/products/GAO-07-1126] (Washington, D.C.: Sept. 19, 
2007). 

[34] The Brookings Institution, State of Metropolitan America: On the 
Front Lines of Demographic Transformation (Washington, D.C., 2010). 

[35] Discretionary riders are people who have the option to drive, but 
choose to take public transit. 

[36] Metropolitan planning organizations, representing local 
governments and working in coordination with state departments of 
transportation and major providers of transportation services, have 
responsibility for the regional transportation planning processes in 
urbanized areas. See GAO, Metropolitan Planning Organizations: Options 
Exist to Enhance Transportation Planning Capacity and Federal 
Oversight, [hyperlink, http://www.gao.gov/products/GAO-09-868] 
(Washington, D.C.: Sept. 9, 2010). 

[37] FTA, National State of Good Repair Assessment (Washington, D.C., 
June 2010). 

[38] FTA, National State of Good Repair Assessment (Washington, D.C., 
June 2010). 

[39] FTA's minimum useful life is 12 years for 40-foot buses and 25 
years for rail vehicles. Generally, transit agencies assume a longer 
minimum useful life of their assets. For example, one transit agency 
assumes 15 years for buses and 35 years for rail vehicles. 

[40] Pub. L. No. 111-5, 123 Stat. 115 (2009). 

[41] GAO, State and Local Governments' Fiscal Outlook: March 2010 
Update, [hyperlink, http://www.gao.gov/products/GAO-10-358] 
(Washington, D.C.: Mar. 2, 2010). 

[42] GAO, State and Local Governments: Fiscal Pressures Could Have 
Implications for Future Delivery of Intergovernmental Programs, 
[hyperlink, http://www.gao.gov/products/GAO-10-899] (Washington, D.C.: 
July 30, 2010). 

[43] GAO, Recovery Act: States' and Localities' Uses of Funds and 
Actions Needed to Address Implementation Challenges and Bolster 
Accountability, [hyperlink, http://www.gao.gov/products/GAO-10-604] 
(Washington, D.C.: May 26, 2010). 

[44] [hyperlink, http://www.gao.gov/products/GAO-10-899]. 

[45] Performance accountability is defined as the mechanisms by which 
individuals or organizations are held accountable for meeting 
specified performance-related expectations. 

[46] FTA considers assets to be in a "state of good repair" if their 
condition is rated to be above the middle of the "marginal" range on 
the condition rating scale that FTA uses for its economic requirements 
reports (i.e., 1-2 is considered poor, 2-3 is considered marginal, 3-4 
is considered adequate, 4-4.8 is considered good, and 4.8-5 is 
considered excellent). Assets rated below this condition (i.e., less 
than 2.5) are considered to have passed their useful life and need to 
be rebuilt or replaced. A working definition of a system in a state of 
good repair is that all its operating assets are above this condition 
threshold. 

[47] FTA, Transit State of Good Repair: Beginning the Dialogue 
(Washington, D.C., October 2008). 

[48] U.S. Department of Transportation, Fiscal Year 2011 Budget 
Highlights (Washington, D.C., Feb. 1, 2010). 

[49] U.S. House of Representatives, Committee on Transportation and 
Infrastructure, The Surface Transportation Authorization Act of 2009: 
A Blueprint for Investment and Reform Executive Summary (Washington, 
D.C., June 18, 2009). 

[50] U.S. House of Representatives, Committee on Transportation and 
Infrastructure, The Surface Transportation Authorization Act of 2009: 
A Blueprint for Investment and Reform Executive Summary (Washington, 
D.C., June 18, 2009). 

[51] The National Surface Transportation Policy and Revenue Study 
Commission was established by SAFETEA-LU. Among other things, the 
Commission was required to conduct a comprehensive study of the 
current condition and future needs of the surface transportation 
system, evaluate possible funding alternatives, and develop a 
conceptual plan, with alternative approaches, to ensure that the 
surface transportation system will continue to serve the needs of the 
United States. Pub. L. No. 109-59, § 1909, 119 Stat. 1144, 1471-1477 
(2005). 

[52] National Surface Transportation Policy and Revenue Study 
Commission, Report of the National Surface Transportation Policy and 
Revenue Study Commission: Transportation for Tomorrow (Washington, 
D.C., December 2007). 

[53] National Surface Transportation Policy and Revenue Study 
Commission, Report of the National Surface Transportation Policy and 
Revenue Study Commission: Transportation for Tomorrow (Washington, 
D.C., December 2007). 

[54] FTA, Transit State of Good Repair: Beginning the Dialogue 
(Washington, D.C., October 2008). 

[55] See S. Report 111-69, at 88 (2009). 

[56] GAO, Public Transportation: Better Data Needed to Assess Length 
of New Starts Process, and Options Exist to Expedite Project 
Development, [hyperlink, http://www.gao.gov/products/GAO-09-784] 
(Washington, D.C.: Aug. 6, 2009), and Highway Infrastructure: 
Stakeholders' Views on Time to Conduct Environmental Reviews of 
Highway Projects, [hyperlink, http://www.gao.gov/products/GAO-03-534] 
(Washington, D.C.: May 23, 2003). 

[57] 49 U.S.C. § 5309. 

[58] [hyperlink, http://www.gao.gov/products/GAO-09-784]. 

[59] For more information on GAO's recommendations on how to 
streamline the New Starts project development process, see GAO-09-784. 

[60] GAO, Public Transportation: Future Demand Is Likely for New 
Starts and Small Starts Programs, but Improvements Needed to the Small 
Starts Application Process, [hyperlink, 
http://www.gao.gov/products/GAO-07-917] (Washington, D.C.: July 27, 
2007). 

[61] GAO, Public Transportation: Opportunities Exist to Improve the 
Communication and Transparency of Changes Made to the New Starts 
Program, [hyperlink, http://www.gao.gov/products/GAO-05-674] 
(Washington, D.C.: June 28, 2005), and GAO-07-917. 

[62] GAO, Public Transportation: Use of Contractors Is Generally 
Enhancing Transit Project Oversight, and FTA Is Taking Actions to 
Address Some Stakeholder Concerns, [hyperlink, 
http://www.gao.gov/products/GAO-10-909] (Washington, D.C.: Sept. 14, 
2010). 

[63] U.S. House of Representatives, Committee on Transportation and 
Infrastructure, The Surface Transportation Authorization Act of 2009: 
A Blueprint for Investment and Reform Executive Summary (Washington, 
D.C., June 18, 2009). 

[64] The early stages of the New Starts project development process, 
including alternatives analysis and much of preliminary engineering, 
are carried out in concert with the metropolitan planning process 
specified by SAFETEA-LU and the environmental review processes 
required by NEPA, 42 U.S.C. § 4321 et seq. GAO-09-784. Among other 
things, NEPA requires agencies to consider and potentially mitigate 
potential environmental degradation resulting from federally funded 
infrastructure projects before these projects move forward. 
Specifically, FTA is to ensure that project sponsors complete the 
environmental review process, as prescribed in NEPA and its 
implementing regulations, in order to receive federal funding. 

[65] National Surface Transportation Policy and Revenue Study 
Commission, Report of the National Surface Transportation Policy and 
Revenue Study Commission: Transportation for Tomorrow (Washington, 
D.C., December 2007). 

[66] See [hyperlink, http://www.gao.gov/products/GAO-03-534]. Related 
GAO work includes Transportation Planning: State and Metropolitan 
Planning Agencies Report Using Varied Methods to Consider Ecosystem 
Conservation, [hyperlink, http://www.gao.gov/products/GAO-04-536] 
(Washington, D.C.: May 17, 2004), and Highways and Environment: 
Transportation Agencies Are Acting to Involve Others in Planning and 
Environmental Decisions, [hyperlink, 
http://www.gao.gov/products/GAO-08-512R] (Washington, D.C.: Apr. 25, 
2008). 

[67] GAO, Surface Transportation: Restructured Federal Approach Needed 
for More Focused, Performance-Based, and Sustainable Programs, 
[hyperlink, http://www.gao.gov/products/GAO-08-400] (Washington, D.C.: 
Mar. 6, 2008). 

[68] GAO, Grants Management: Enhancing Performance Accountability 
Provisions Could Lead to Better Results, [hyperlink, 
http://www.gao.gov/products/GAO-06-1046] (Washington, D.C.: Sept. 29, 
2006). 

[69] GAO, Federal Transit Programs: Federal Transit Administration Has 
Opportunities to Improve Performance Accountability, [hyperlink, 
http://www.gao.gov/products/GAO-11-54] (Washington, D.C.: Anticipated 
Nov. 17, 2010). 

[70] GAO, Executive Guide: Effectively Implementing the Government 
Performance and Results Act, [hyperlink, 
http://www.gao.gov/products/GAO/GGD-96-118] (Washington, D.C.: June 
1996); DOT, International Technology Scanning Program, Linking 
Transportation Performance and Accountability (Washington, D.C., 
January 2010; and, Bipartisan Policy Center, National Transportation 
Policy Project, Performance Driven: A New Vision for U.S. 
Transportation Policy (Washington, D.C., June 9, 2009). 

[71] 23 U.S.C. § 408. 

[72] See GAO, Traffic Safety Data: State Data Quality Varies and 
Limited Resources and Coordination Can Inhibit Further Progress, 
[hyperlink, http://www.gao.gov/products/GAO-10-454] (Washington, D.C.: 
Apr. 15, 2010). 

[73] [hyperlink, http://www.gao.gov/products/GAO-11-54]. 

[74] [hyperlink, http://www.gao.gov/products/GAO-11-54]. 

[75] The Bipartisan Policy Center is a nonprofit organization that was 
established in 2007 by former Senate Majority Leaders Howard Baker, 
Tom Daschle, Bob Dole, and George Mitchell to develop and implement 
bipartisan policy solutions. The National Transportation Policy 
Project, a project of the Bipartisan Policy Center, was launched in 
February 2008 with the aim of presenting a new vision for federal 
transportation policy. 

[76] Bipartisan Policy Center, National Transportation Policy Project, 
Performance Driven: A New Vision for U.S. Transportation Policy 
(Washington, D.C., June 9, 2009). 

[77] [hyperlink, http://www.gao.gov/products/GAO-11-54]. 

[78] Recipients and beneficiaries of grants from the FTA under the 
Urbanized Area Formula Program (49 U.S.C. § 5307) or Other than 
Urbanized Area (Rural) Formula Program (49 U.S.C. § 5311) are required 
by statute to submit data to the NTD. 49 U.S.C. § 5335. Over 700 
urbanized area transit providers and over 1,300 rural transit 
providers report to the NTD on a variety of variables, including 
information on all funds applied to transit, such as federal, state, 
local, and other funds. FTA estimates that the NTD represents over 95 
percent of public transportation in urbanized areas. 

[79] According to the NTD, heavy rail service is characterized by high-
speed and rapid acceleration passenger rail cars operating singly or 
in multicar trains on fixed electric rails; separate rights-of-way 
from which all other traffic is excluded; sophisticated signaling; 
high platform loading; and a heavy passenger volume. Light rail is an 
electric railway with a lower passenger volume compared to heavy rail. 
Passenger cars operating singly (or in short, two-car trains) on fixed 
rails in shared or exclusive right-of-way, low-or high-platform 
loading, characterize light rail service. The vehicle's power is drawn 
from an overhead electric wire. Bus operates on fixed routes and 
schedules over existing roadways. 

[80] The NTD defines PMT as the cumulative sum of the distances ridden 
by each passenger. 

[81] The NTD defines VRMs as the miles a transit vehicle travels while 
in revenue service--that is, when the vehicle is available to the 
public with the expectation of carrying passengers. 

[82] The NTD defines operating expenses as those expenses incurred by 
transit agencies that are associated with operating mass 
transportation services (i.e., vehicle operations, maintenance, and 
administration). According to the NTD, capital expenses include the 
following categories: revenue vehicles, guideway, communication and 
information systems, fare revenue collection equipment, maintenance 
facilities, passenger stations, administration buildings, service 
(nonrevenue) vehicles, and other (including passenger shelters, signs 
and amenities, and furniture and equipment that are not integral parts 
of buildings and structures). The NTD also defines capital expenses as 
having a useful life of greater than one year. 

[83] According to the NTD, sources of operating funds include fare 
revenues, federal assistance, state assistance, local assistance, and 
other funds. Other funds can include subsidies from other sectors of 
operations and directly levied taxes, among other things. 

[84] The NTD defines capital funds as the funds that transit agencies 
receive from federal, state, local, and directly generated sources and 
that are applied to capital projects. Directly generated sources 
include any funds generated or donated directly to the transit agency 
including passenger fares, advertising revenues, and donations and 
grants from private entities. 

[85] NTD data analyses were adjusted for inflation, where appropriate. 

[86] The NTD defines UPTs as the number of passengers who board public 
transit vehicles. Passengers are counted each time they board vehicles 
no matter how many vehicles they use to travel from their origin to 
their destination. 

[87] To diversify the types of urbanized areas included in our study, 
the team selected urbanized areas with varying sizes of transit 
markets (small, medium, and large). We also included in the study at 
least one urbanized area from each of the four U.S. regions as defined 
by the U.S. Census Bureau. Urbanized areas (as defined by the U.S. 
Census Bureau) are densely settled territories that contain 50,000 or 
more people. 

[88] UPTs are the number of passengers who board public transportation 
vehicles. Passengers are counted each time they board vehicles no 
matter how many vehicles they use to travel from their origin to their 
destination. 

[89] Recipients and beneficiaries of grants from FTA under the 
Urbanized Area Formula Program (49 U.S.C. § 5307) or Other than 
Urbanized Area (Rural) Formula Program (49 U.S.C. § 5311) are required 
by statute to submit data to the NTD. 49 U.S.C. § 5335. Over 700 
urbanized area transit providers and over 1,300 rural transit 
providers report to the NTD on a variety of variables, including 
information on all funds applied to transit, such as federal, state, 
local, and other funds. FTA estimates that the NTD represents over 95 
percent of public transportation in urbanized areas. 

[90] The NTD defines VRMs as the miles a transit vehicle travels while 
in revenue service--that is, when the vehicle is available to the 
public with the expectation of carrying passengers. 

[91] The NTD defines VRHs as the hours that vehicles are scheduled to 
or actually travel while in revenue service. 

[92] The NTD defines PMT as the cumulative sum of the distances ridden 
by each passenger. 

[93] According to officials with FTA, due to a change in MTA's 
methodology for counting UPTs, this measure experienced a marked 
increase in 2006. According to FTA, it is estimated that in 2005 and 
prior report years, heavy rail ridership for MTA was underestimated by 
about 20 percent. 

[94] Vehicle maintenance is defined as all activities associated with 
revenue and non-revenue (service) vehicle maintenance, including 
administration, inspection and maintenance, servicing (e.g., cleaning, 
fueling, etc.) vehicles, in addition to repairs due to vandalism and 
accident repairs of revenue vehicles. 

[95] General administration is defined as all activities associated 
with the general administration of the transit agency, including 
transit service development, injuries and damages, safety, personnel 
administration, legal services, insurance, data processing, finance 
and accounting, purchasing and stores, engineering, real estate 
management, office management and services, customer services, 
promotion, market research, and planning. 

[End of section] 

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