One of the most effective possible uses of stimulus funds would be to cover gaps in the operating budgets of mass transit systems. The downfall in state and local tax revenue is forcing transit cutbacks across the country that have both a direct contractionary impact and also make it harder for people to live their lives and conduct their business. But currently stimulus funds can be used only for new capital projects rather than for operating costs. So you can have bus drivers being laid off even as new construction workers are hired.
Friday, Pete DeFazio (D-OR) and 26 other House members launched an initiative to try to change that:
Passenger rail and bus advocates are pressing conferees on the war supplemental bill to include a Senate-passed provision that would allow public transit agencies to spend some of their stimulus dollars on operating expenses, instead of capital improvements. The language in the Senate version of the bill (HR 2346) would let transit agencies use as much as 10 percent of their funding from the economic recovery law (PL 111-5) to fend off personnel and service cuts. Transit received $8.4 billion total in the stimulus.
Pat Garofalo argues at the Wonk Room:
Since one of the goals of the stimulus was to preserve jobs, it makes little sense to prevent cities from saving the jobs of transit employees, particularly as more and more people are turning towards public transportation. Hopefully, Congress makes a better decision this time around.
Summer’s coming and gasoline taxes are rising. One of the simplest things the government can do to push back on that situation is expand transit offerings. Really fundamental expansion requires capital expenditures and takes time. But increasing the number of bus routes, and the frequency of service on existing bus and rail routes, can be done fairly easily. It just takes money. But it’s a good use of stimulus funds.