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[Senate Hearing 108-103]
[From the U.S. Government Publishing Office]

                                                        S. Hrg. 108-103

 
                  PROPOSED FISCAL YEAR 2005 BUDGET FOR
                   THE FEDERAL TRANSIT ADMINISTRATION

=======================================================================

                                HEARING

                               before the

                              COMMITTEE ON
                   BANKING,HOUSING,AND URBAN AFFAIRS
                          UNITED STATES SENATE

                      ONE HUNDRED EIGHTH CONGRESS

                             SECOND SESSION

                                   ON

 THE DETAILS OF THE ADMINISTRATION'S FISCAL YEAR 2005 BUDGET PROPOSAL 
                 FOR THE FEDERAL TRANSIT ADMINISTRATION

                               __________

                             MARCH 25, 2004

                               __________

  Printed for the use of the Committee on Banking, Housing, and Urban 
                                Affairs

      Available at: http: //www.access.gpo.gov /congress /senate/
                            senate05sh.html

                                 ______

                    U.S. GOVERNMENT PRINTING OFFICE
23-760                      WASHINGTON : 2005
_____________________________________________________________________________
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            COMMITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS

                  RICHARD C. SHELBY, Alabama, Chairman

ROBERT F. BENNETT, Utah              PAUL S. SARBANES, Maryland
WAYNE ALLARD, Colorado               CHRISTOPHER J. DODD, Connecticut
MICHAEL B. ENZI, Wyoming             TIM JOHNSON, South Dakota
CHUCK HAGEL, Nebraska                JACK REED, Rhode Island
RICK SANTORUM, Pennsylvania          CHARLES E. SCHUMER, New York
JIM BUNNING, Kentucky                EVAN BAYH, Indiana
MIKE CRAPO, Idaho                    ZELL MILLER, Georgia
JOHN E. SUNUNU, New Hampshire        THOMAS R. CARPER, Delaware
ELIZABETH DOLE, North Carolina       DEBBIE STABENOW, Michigan
LINCOLN D. CHAFEE, Rhode Island      JON S. CORZINE, New Jersey

             Kathleen L. Casey, Staff Director and Counsel

     Steven B. Harris, Democratic Staff Director and Chief Counsel

               Peggy R. Kuhn, Senior Financial Economist

           Sherry E. Little, Democratic Legislative Assistant

                   Sarah A. Kline, Democratic Counsel

                  Aaron D. Klein, Democratic Economist

   Joseph R. Kolinski, Chief Clerk and Computer Systems Administrator

                       George E. Whittle, Editor

                                  (ii)
?

                            C O N T E N T S

                              ----------                              

                        THURSDAY, MARCH 25, 2004

                                                                   Page

Opening statement of Chairman Shelby.............................     1

Opening statements, comments, or prepared statements of:
    Senator Dole.................................................     2
    Senator Reed.................................................     3
    Senator Allard...............................................     4
    Senator Crapo................................................     5
    Senator Sarbanes.............................................    14
    Senator Dodd.................................................    32
    Senator Corzine..............................................    32

                               WITNESSES

Jennifer L. Dorn, Administrator, Federal Transit Administration, 
  U.S.
  Department of Transportation...................................     5
    Prepared statement...........................................    33
    Response to written questions of Senator Dodd................    57
William Millar, President, American Public Transportation 
  Association....................................................    20
    Prepared statement...........................................    38
Dale J. Marsico, Executive Director, Community Transportation 
  Association
  of America.....................................................    24
    Prepared statement...........................................    42
Timothy Martin, Chairman, Standing Committee on Public 
  Transportation
  of the American Association of State Highway and Transportation 
    Officials,
  Secretary, Illinois Department of Transportation...............    25
    Prepared statement...........................................    53
Rolf Th. Lundberg, Jr., Senior Vice President, Congressional and 
  Public
  Affairs, U.S. Chamber of Commerce..............................    27
    Prepared statement...........................................    54

                                 (iii)

                  PROPOSED FISCAL YEAR 2005 BUDGET FOR
                   THE FEDERAL TRANSIT ADMINISTRATION

                              ----------                              

                        THURSDAY, MARCH 25, 2004

                                       U.S. Senate,
          Committee on Banking, Housing, and Urban Affairs,
                                                    Washington, DC.

    The Committee met at 2:07 p.m., in room SD-538, Dirksen 
Senate Office Building, Senator Richard Shelby (Chairman of the 
Committee) presiding.

        OPENING STATEMENT OF CHAIRMAN RICHARD C. SHELBY

    Chairman Shelby. The hearing will come to order. I am very 
pleased to welcome Federal Transit Administrator Jennifer Dorn, 
from the Department of Transportation. Ms. Dorn, it is good to 
see you here, and I know Senator Dole is always glad to see you 
here because of the background you have shared. I asked 
Administrator Dorn to come before the Committee today to share 
the details of the Administration's 2005 proposed budget for 
FTA, and I appreciate her willingness to respond to the 
Committee's request for her time.
    We have also assembled a distinguished panel of witnesses 
from the public transportation industry who are particularly 
well qualified to comment on the Administration's proposal. The 
Committee also values the time and effort you too have made to 
be with us this afternoon.
    On February 12 of this year, the Senate passed S. 1072, a 
bill to reauthorize the surface transportation programs. The 
Banking Committee produced the public transportation title of 
that legislation. It is a product that I, along with Ranking 
Member Sarbanes, Senators Allard, Reed, and others have worked 
diligently on in order to strike the balance between meeting 
the existing needs of established transit systems and 
continuing to provide resources for the growth of new systems. 
I do not speak exclusively for myself when I say that it is a 
bill of which we are proud. Our bill advances many new ideas, 
increases the role of the private sector in service provision, 
improves accountability, and creates funding flexibility for 
rural communities nationwide.
    The House of Representatives has yet to produce a companion 
bill. Time constraints have been crucial, the Senate passed an 
extension to TEA-21, which extends the authorization of this 
and other programs until April 30 of this year. I am hopeful 
that the House will move expeditiously to pass a bill that 
provides for the kind of record program growth that our 
transportation infrastructure requires.
    It is with interest today that we hear from the 
Administration about their budget proposal for 2005. I must say 
that I am disappointed to see that there is no additional 
funding provided for public transportation from the fiscal year 
2004 enacted level. It will come as no surprise that I believe 
this level is inadequate to address our transportation needs. I 
view this as a current services budget. Certainly I would 
prefer to see better numbers for the surface transportation 
programs overall than what the Administration has proposed.
    In terms of the policy initiatives accompanying this 
proposal, I am chagrined to see that, once again, the 
Administration proposes elimination of the bus program. 
Additionally, I noted with interest that the Administration 
would divert dollars from the elimination of the bus program 
into New Starts and would distribute the Jobs Access and 
Reverse Commute Program funds by formula.
    Not only from the perspective of the authorizing committee, 
but also in my capacity on another committee as Chairman of the 
Transportation Appropriations Subcommittee, I fail to see how 
sending out grant funds based on formula creates accountability 
within the program or allows flexibility on a year-to-year 
basis.
    Having said that, I can say that one of the bright spots 
that I found in your testimony, Administrator Dorn, is your 
Agency's focus on the coordination amongst human service 
transportation providers. This is an area that I have been 
interested in for some time and have made great efforts to 
address in the reauthorization bill. It is encouraging that 
this issue is finally garnering the interest it deserves. 
Administrator Dorn, I think Executive Order 13330 is a great 
first step, and I pledge my support to you as you work toward 
establishing the Interagency Transportation Coordinating 
Council on Access and Mobility.
    Now, let us hear the other opening statements of our other 
Members. We will start with Senator Dole.

              STATEMENT OF SENATOR ELIZABETH DOLE

    Senator Dole. Thank you, Mr. Chairman. Our transportation 
system is obviously the backbone of our communities and one 
which we must continually maintain and improve upon so that our 
communities can properly function and grow. This budget 
contains a number of new initiatives which seek to assist 
communities not traditionally served by Federal transit funds. 
I especially note the higher priority the Administration has 
placed on rural public transportation, and area which I believe 
has been too long overlooked. Our rural populations have long 
been challenged by a real lack of public transportation. In 
fact, 40 percent of rural counties, especially in southern and 
western States, have no public transit today. This is an area 
which deserves our attention, and I applaud the Administration 
for taking steps to address this problem.
    In addition, I want to again compliment you, Administrator 
Dorn, and the Administration for proposing the Small Start 
Program in last year's budget. I was very pleased when this 
proposal became part of the Senate-passed SAFETEA. This bill 
recognizes that there is a difference between large and small 
transit projects, by creating an option for smaller projects 
which may suit a community's needs better. The less-complicated 
rating process that has been proposed would go a long way 
toward correcting this problem.
    North Carolina is truly an up-and-coming State with respect 
to our ambitious public transportation goals. I am pleased to 
say that the Administration has recognized North Carolina's 
growing transit needs and efforts in this budget submission by 
creating a special category for the two North Carolina transit 
projects currently in final design.
    This special designation, while appreciated, has raised 
questions in these communities due to the novelty of the 
special category created for the projects. My constituents need 
to know that this designation provides them with the 
opportunity to receive a full-funding grant agreement under FTA 
guidelines. Because the timely completion of the Charlotte-area 
rapid transit South Corridor light rail project and the 
Triangle Transit Authority are so critical, I look forward to 
discussing this issue with Administrator Dorn and to working 
with all my colleagues as we continue to pursue enactment of 
SAFETEA.
    Thank you, Mr. Chairman.
    Chairman Shelby. Senator Reed.

                 STATEMENT OF SENATOR JACK REED

    Senator Reed. Thank you very much, Mr. Chairman, for 
holding this hearing on the budget request for the Federal 
Transit Administration. I thank Administrator Dorn for coming 
here and thank her for her great work over several years. Put 
simply, the President's proposed flat-line budget falls short 
of our Nation's needs and the $8.6 billion level this Committee 
and the entire Senate have strongly endorsed in our 
reauthorization bill. Mr. Chairman, you know from your 
leadership here on the Committee and at your Appropriations 
Subcommittee that the very real need for transit funding far 
exceeds $7.2 billion. The U.S. Department of Transportation's 
2002 Conditions and Performance Report found that just to 
maintain our existing transit system, total transit spending by 
all levels of the Government should be $14.8 billion annually.
    Unfortunately, the President's advisors have recommended 
that he veto the modest reauthorization bill this Committee 
produced under your leadership along with Senator Sarbanes. The 
tragic incident in Madrid is a reminder that public 
transportation remains a prime target for terrorists. This 
flat-line budget is all the more disconcerting when one 
considers the anemic level of funding in the Department of 
Homeland Security's budget for transit security.
    My greatest concern continues to be that it will take a 
transit September 11 for there to be the collective will to 
start meeting the known need, a need well identified by 
Administrator Dorn, the Department of Homeland Security, the 
General Accounting Office, APTA, and others, the need for 
greater investment in transit security to protect the millions 
of hard-working Americans who take public transportation every 
single day.
    I look forward to today's testimony and to getting the 
witnesses' views on the budget proposal, particularly its lack 
of significant funding for transit security.
    Thank you, Mr. Chairman.
    Chairman Shelby. Senator Allard.

               STATEMENT OF SENATOR WAYNE ALLARD

    Senator Allard. Thank you, Mr. Chairman. I would like to 
thank you for holding this hearing. You have made public 
transportation a top priority for the Committee this year, and 
I appreciate your dedication to improving American mobility.
    Chairman Shelby, Ranking Member Sarbanes, Senator Reed, and 
I have spent a great deal of time on reauthorization during 
recent months. I am pleased that the Senate was able to pass a 
bill that included many positive changes. It is my hope that 
our House colleagues will follow our lead and move quickly to 
get the surface transportation programs reauthorized. It is 
obvious that the Administration shares the desire to move 
forward toward a full reauthorization, as the budget proposal 
was primarily a restatement of their SAFETEA proposal. But we 
will have extensive discussion as to the amount of funding 
proposed for fiscal year 2005 over the life of reauthorization.
    I prefer to keep focused on the progress that the Senate 
bill makes in a number of areas. I believe that the Senate bill 
provides a good framework for distributing money and running 
programs, whatever the specific amounts may eventually be 
determined.
    First, I would like to point out the Growing States 
formula. During the last authorization cycle, I worked to 
achieve a fair distribution of money to the rapidly growing 
western and southern States. And I am pleased that the new bill 
continues that effort. States like Colorado are experiencing 
tremendous population booms and they must have been access to 
the resources necessary to meet their burgeoning transportation 
needs.
    Second, I believe that the bill finally places a more 
proper emphasis on rural transit. During past reauthorizations, 
Members have been seized by an inside-the-Beltway mentality, 
with little understanding of the transportation needs of more 
rural areas. In fact, many would have considered ``rural 
transit'' to be an oxymoron. However, the rural citizens' 
public transportation may be the only way they are able to 
access jobs, health care, and other vital services. Yet 40 
percent of American counties have no transportation service. I 
am pleased that the Senate decided to prioritize the needs of 
rural citizens by growing the rural and bus programs.
    I would also like to point out the expansion of the transit 
programs to encompass the Bus Rapid Transit. In appropriate 
circumstances, the BRT can offer capacity similar to rail at a 
fraction of the cost. This will provide additional flexibility 
to States and counties as they consider the options best suited 
to their circumstances. This is an especially attractive option 
in constrained areas, such as Colorado's mountain valleys.
    The Senate bill makes critical progress enhancing the role 
of the private sector. The private sector plays a key role in 
improving mobility and our bill will ensure that they continue 
to have a seat at the table. I was also especially pleased we 
were able to make common-sense reforms to the existing labor 
protectionist provisions.
    I share the Administration's regret that the Senate bill 
had to drop some of the proposed incentive programs. Incentives 
are a powerful inducement to improve programs. Fortunately, 
though, we were able to retain some initiatives to encourage 
projects to remain on time and on budget. I am hopeful that as 
the process moves forward we may be able to further utilize 
performance incentives.
    Finally, I would like to thank you, Administrator Dorn, and 
all the other witnesses for their help as we worked on 
reauthorization. As we continue those efforts and move through 
the fiscal year 2005 appropriations process, I am certain we 
will continue that close working relationship. Your comments 
here today will be helpful, and I appreciate your testimony.
    Again, thank you, Mr. Chairman. I would like to apologize 
in advance to Ms. Dorn because I am going to have to leave at 
2:30, since I have another Committee that I have to chair. 
Thank you for helping us.
    Chairman Shelby. Thank you. Senator Crapo.

                STATEMENT OF SENATOR MIKE CRAPO

    Senator Crapo. Thank you very much, Mr. Chairman. 
Administrator Dorn, I appreciate you being here with us today. 
I will be brief.
    There has been reference here already today about the 
difficulty we are facing budget-wise in terms of getting the 
resources necessary for urban transit and the many difficult 
pressures that we face. I believe that I speak for all of us in 
the Senate and the Administration when we say we are going to 
be doing our very best to get the maximum amount of resources 
into this area in the difficult budget climate which we face.
    As Senator Allard indicated, having said that, I believe 
that we should recognize the strong effort that the 
Administration is making and that this Committee made to focus 
our resources as effectively as they can be made.
    I just want to comment on one other thing, and it is 
frankly a thank you to our Chairman for the good work that he 
and his staff have put in to building the Senate's 
reauthorization bill. As Senator Allard and Senator Dole have 
indicated, a needed emphasis exists in this country for the 
transit needs in our rural States. In reality, many people have 
thought in the past that we just did not have those needs in 
rural States. But we have them every bit as much as the urban 
areas do. And the bill that was crafted under your leadership, 
Mr. Chairman, recognized that in very important ways. And I 
just wanted to, again, commend you for that and to indicate to 
you my strong support as we move this process forward to 
protect and preserve the direction that we have developed in 
the Senate bill, both in terms of the resources we are seeking 
to allocate and in terms of the new formula directions and the 
new focus on meeting the needs of our Nation's rural areas in 
transit.
    Thank you.
    Chairman Shelby. Administrator Dorn, your written statement 
will be made part of the record in its entirety. You may 
proceed as you wish.

                 STATEMENT OF JENNIFER L. DORN

         ADMINISTRATOR, FEDERAL TRANSIT ADMINISTRATION

               U.S. DEPARTMENT OF TRANSPORTATION

    Administrator Dorn. Thank you, Mr. Chairman, and I 
appreciate the opportunity to testify before you and other 
Committee Members on the President's fiscal year 2005 budget 
for the Federal Transit Administration. The President, as you 
know, has proposed $7.27 billion for transit programs, 
sustaining the record Federal investment proposed by the 
President and enacted by Congress for fiscal year 2004.
    I would like spend the next few minutes, if I may, briefly 
discussing three of our most important priorities, one of which 
you mentioned, the coordination of human service 
transportation, Mr. Chairman, as well as the New Starts piece 
and our continued improvements there, and our emphasis on 
helping transit agencies protect their passengers, employees, 
and assets that was brought up by Senator Reed.
    First, a wholehearted thank you, Mr. Chairman, for your 
leadership and your support of our efforts to bring more 
common-sense solutions to a very frustrating problem that you 
identified in terms of the coordination of human service 
transportation. Your leadership has been critical in convincing 
others to come to the table to help us figure this out.
    Over the last decade or more, the good news is that there 
has been a growing awareness of the needs of older adults, 
persons with disabilities, and people with low incomes, and 
that has led to the creation of numerous new programs 
throughout the Government, many of them with critical 
transportation components. Ironically, the impressive 
investment of money, time, and energy devoted to this issue has 
not solved the transportation problems of the people it is 
intended to help.
    So over the past year and a half, FTA has reached out to 
other departments and to stakeholders and to committees like 
this to develop a focused, action-oriented plan to deal with 
administrative, legislative, logistical, and ``people 
barriers,'' if you will.
    As you mentioned, Mr. Chairman, on February 24, President 
Bush signaled the importance of this effort to the 
Administration by signing Executive Order 13330, bringing 10 
Federal agencies together on the Interagency Transportation 
Coordinating Council on Access and Mobility. He charged us with 
the tasks of eliminating duplication and overlapping Federal 
programs and improving the coordination of Federally supported 
transportation services at all levels. It is the kind of 
activity that we had been working on; he solidified the support 
with this Executive Order and brought a number of the agencies 
to the table that had not already been there.
    The Executive Order was announced at the First National 
Leadership Forum on Human Service Transportation Coordination, 
before an audience that included governor-appointed senior 
leadership teams from 47 States and U.S. territories. The 
significance of this was that these representatives could only 
attend if it was a multidisciplinary team. So we had 
secretaries of cabinet departments at the State level, from 
human services, labor, and transportation, because we wanted to 
have that kind of dialogue.
    At the forum, Secretary Mineta honored 5 States--two of 
those are represented on this Committee, North Carolina and 
Maryland; as well as Ohio, Washington, and Florida--with State 
Leadership Awards. These States have made significant progress 
toward building a coordinated human service transportation 
system and, very frankly, we wanted to get the competition 
going among governors. And it has already begun to work.
    The National Leadership Forum and State Leadership Awards 
are 2 components of our 5-part United We Ride initiative. The 
initiative, very briefly, also includes the creation and 
distribution of a Framework for Action, which is a practical 
and comprehensive self-assessment tool for States and 
communities to be able to move forward in this complex arena; 
and at least $1 million for a series of grants from FTA for 
State coordination, to help address the gaps in human service 
transportation.
    In addition, we have a technical assistance program that 
will build on the work of CTAA, Project Action, and other 
stakeholder groups to provide hands-on assistance among and 
between all of these programs to States and communities in 
coordinating their human service transportation program.
    The FTA 2005 budget request and the Administration's 
SAFETEA proposal for reauthorization of surface transportation 
programs include some important elements. I want to thank you 
and the Committee for endorsing those very strongly and placing 
them in the Senate-passed bill. We are very grateful for that. 
I believe these steps, among the many others with respect to 
our action plan, will help make coordinated human service 
transportation a reality.
    The second important area I would like to highlight is New 
Starts. The proposed $1.5 billion budget for New Starts is a 
reflection of the Administration's strong commitment to 
continued Federal investment in major transit projects. In 
addition to funding the 26 existing and 1 pending full-funding 
grant agreement, the budget funds seven additional projects, 
five that are expected to be ready for a new FFGA before the 
end of fiscal year 2005, and 2 meritorious projects. These 7 
projects were among the 29 that were evaluated and rated in the 
comprehensive 2005 Annual New Starts Report.
    For this rating process, FTA made no changes in measures, 
break points for ratings, or weightings among measures in the 
determination of ratings. However, we continue to focus on 
helping project sponsors develop projects that are cost 
effective, locally supported, delivered on time and within 
budget, and achieve their promised transportation benefits.
    Over the last year, as we increased our focus on ensuring a 
good return on investment, FTA's attention to proactive project 
cost management resulted in some significant total savings. We 
sent in project management teams to assist a number of our 
proposed New Starts projects, and we were able to save $673 
million for 7 proposed investments in order to improve the 
cost-effectiveness and to improve the already good credibility 
of our transit investments. We believe that every transit 
investment must be worth its salt, and that will yield better 
results for a continued interest in improving and increasing 
investments in public transportation at all levels of 
Government.
    One new tool we are now using is a quantitative risk 
assessment that helps project sponsors identify the issues that 
could affect schedule or cost, as well as the probability that 
they will do so. This tool was originally developed to help 
manage the Federal Government's risk with regard to the 100 
percent Federally funded Lower Manhattan Recovery Project as a 
result of September 11. It has given both FTA and project 
sponsors a new quantitative means to manage risk more 
explicitly and reduce the likelihood of cost and schedule 
overruns.
    We are currently conducting these risk assessments for 
those projects that are further along in project development, 
but will eventually use this important management tool to 
assist sponsors with projects in alternatives analysis and 
preliminary engineering. We know that the earlier in the 
project that sponsors identify and understand the ramifications 
of all the decisions they make with respect to alignment, 
design, engineering, and other aspects of the project, the 
better our projects will be and the fewer undesirable surprises 
communities will face in later stages of development.
    And I know, Mr. Chairman, you are very aware of a couple of 
those projects, at least one where we faced those surprises 
because, earlier, sponsors failed to identify these risks. We 
believe this tool will be particularly useful as FTA responds 
to Congress's request that we become more involved in project 
assessment during earlier stages of the project.
    And finally, Mr. Chairman, in light of recent events in 
Madrid, I would like to take a few moments to update the 
Committee on our transit security activities.
    As, of course, you and other Committee Members are aware, 
transit is obviously designed and operated as an open 
environment. Not all individuals understand that and appreciate 
its significance with respect to the important imposition of 
targeted metrics and abilities to make sure that we improve the 
safety and security of our systems.
    Transit is potentially a high-visibility, high-consequence 
target that, if attacked, could have a significant economic 
impact on a community and the Nation. Rail transit alone 
carries 11 million passengers each day. In 1 week, transit 
moves more passengers than Amtrak carries in a year. In 1 
month, transit moves more passengers than U.S. airlines 
transport in a year. And the majority of transit riders are in 
dense urban environments that run under or near major 
employment centers, Government operations, or cultural icons.
    Prior to September 11, most transit agencies focused their 
security programs primarily on routine crime and vandalism. 
That situation has changed dramatically. The industry has 
responded. FTA began conducting counterterrorism threat and 
vulnerability assessments at 37 of the Nation's largest transit 
systems within 60 days of September 11, and I continue to be 
appreciative of the strong role that this Committee and Senator 
Reed, particularly, have played in bringing attention to this. 
It has been very helpful to us.
    We deployed an aggressive nationwide security program with 
the full cooperation and support of every transit agency. In 
addition to the counterterrorism readiness assessments, FTA has 
undertaken a number of actions. I just want to briefly tick off 
those to show the scope and the depth of the work that FTA has 
done in partnership with our transit agencies.
    We have awarded 83 grants for emergency drills conducted by 
transit agencies in conjunction with fire, police, and other 
emergency responders. We wanted to make sure that transit had a 
seat at the table when these people were planning emergency 
response and that the drills included transit.
    We provided on-site counterterrorism technical assistance, 
and continue to do so, to 29 agencies as a follow-up to our 
threat and vulnerability assessments, with plans to reach all 
of the top 50 transit agencies over the next year.
    We have conducted 18 regional emergency preparedness 
forums. We have completed 4 regional transit terrorism war 
games in conjunction with our partners at APTA, and we 
consulted with international experts who have, unfortunately, 
faced terrorism in transit for many years.
    We provided employee awareness training to more than 46,000 
transit employees. We have developed and distributed standard 
protocols and guidelines for responding the chemical and 
biological incidents in rail, tunnel, and transit vehicle 
environments.
    We have championed transit agency participation in the 
FBI's Joint Terrorism Task Force, so that every major transit 
agency has a connection locally with the FBI's Joint Terrorism 
Task Force. One of the key issues is, obviously, intelligence.
    We have funded and worked on a daily basis with the 
Intelligence Sharing and Analysis Center, which FTA has funded 
under the leadership of APTA, and in which 160 transit agencies 
now participate. They have real-time information about transit 
security.
    We have launched a Transit Watch program, a nationwide 
emergency response passenger awareness program, and many, many 
transit agencies are very aggressively getting the message out 
to the public so that they can be the eyes and ears in this 
environment.
    We have provided and actively monitored the largest 50 
transit agencies' actions with respect to FTA's top-20 security 
action items.
    We have funded research to identify and adapt security 
technologies, such as chemical weapon detection, to a transit 
environment, and we have developed and issued to transit 
agencies specific recommended action steps to take at each 
Homeland Security Advisory Threat Level.
    We recognize, as I mentioned, that intelligence is our 
Nation's first line of defense in transit environments, and we 
rely on the Department of Homeland Security and the FBI for 
such information. We also know that we must continue to pursue 
technology solutions.
    But there is no technological quick fix for security 
concerns, nor is there a substitute for an alert and well 
prepared transit work force and passenger community. Therefore, 
FTA continues to focus its primary efforts on the three key 
priorities I have mentioned to this Committee in previous 
testimony--employee training, public awareness, and emergency 
preparedness. FTA's top action items have helped to 
institutionalize these security programs by focusing on 
management and accountability, security problem identification, 
employee selection, employee training, security audits, and 
emergency response drills, document control and access control.
    The 30 largest transit agencies accomplished at least 80 
percent of these action items in fiscal year 2003, and in 
fiscal year 2004 FTA is focused on maintaining success among 
these 30 and expanding it to the next 20 largest agencies. And 
we have increased the level of attention to this, and our 
senior executive performance rating depends on whether or not 
we meet this goal.
    Mr. Chairman, keeping our communities safe and moving is 
FTA's most important priority. We are working hard to maintain 
the critical balance among security demands, mobility needs, 
and the economic viability that transit provides to every 
community it serves.
    Thank you, Mr. Chairman.
    Chairman Shelby. Thank you. It should not be a surprise to 
you that I am not in favor of increasing the Federal transit 
funds that disbursed by formula. I alluded to that earlier. I 
find it contradictory that you contend that increasing 
accountability is an important goal of the Agency, but yet the 
Administration proposes sending funds out on autopilot without 
year-to-year oversight or an 
annual assessment of individual needs.
    Can you, Administrator Dorn, explain how you reconcile the 
Agency's desire for accountability with the hands-off approach 
to increasing formula spending that you advocate in your budget 
proposal? It certainly seems contradictory to me.
    Administrator Dorn. Yes, Mr. Chairman, you are right. I get 
the message about this Committee's concern about Congressional 
discretionary funding with respect to the bus discretionary 
funding. Fundamentally, the Administration believes that the 
predictability and the flexibility of the formula program 
funding helps communities plan for and meet their 
transportation needs. But we understand that we need to agree 
to disagree on that point. Certainly, just in response to your 
oversight issue, all of our Federal programs have a significant 
amount of oversight in terms of triennial reviews and 
procurement reviews, et cetera, but certainly this is a point 
about which we disagree, and we understand that it is the 
Committee's will to award the program funding in a different 
way.
    Senator Sarbanes. Mr. Chairman, could I just suggest to Ms. 
Dorn----
    Chairman Shelby. Certainly.
    Senator Sarbanes. We do not really like to agree to 
disagree; we like to agree to agree.
    [Laughter.]
    Administrator Dorn. So do I. So do I.
    Chairman Shelby. Thank you, Senator Sarbanes.
    Ms. Dorn, as I mentioned in my opening statement, I am 
supportive of your efforts to coordinate human service 
transportation. What are next steps, now that an Executive 
Order has been issued?
    Administrator Dorn. We have a very serious set of action 
plans to move forward to help reconcile differences in 
eligibility, in funding, and in other respects that seem to 
thwart the ability to have common-sense transit solutions. We 
have found that it is far more effective to take these problems 
agency-by-agency and develop memorandums of agreement, so that 
we can focus on an action plan rather than having a ``group 
grope.'' So we have very specific action plans, and I believe 
we are making a lot of progress, with many thanks to this 
Committee for its support.
    Chairman Shelby. Senator Reed.
    Senator Reed. Thank you very much, Mr. Chairman. And I want 
to commend the administrator again for the vigor and the 
seriousness with which she has pursued all these issues with 
respect to transit security.
    As you are probably aware, Administrator, within the 
pending reauthorization bill, there is a requirement for a 
memorandum of understanding between the Department of Homeland 
Security and the Department of Transportation with respect to 
responsibilities for transit security. This bill is still 
pending. But in anticipation of the law and, I would argue, 
good common sense, do you have a memorandum of responsibility 
between the two Departments outlining various responsibilities?
    Administrator Dorn. First of all, Senator, we appreciate 
your keeping this issue of the MOA or MOU at the forefront of 
the national transportation security agenda. And I know that it 
is not something we have taken lightly or set aside. Early on, 
we did not know the entire scope of what needed to be done 
between and among agencies, or even independently, in order to 
define a memorandum of understanding that would be useful in 
the long-term. Both of our agencies have made a good faith 
effort. Our collaboration gets better day-by-day, and we have 
further defined those issues, so that now we are, I believe, 
productively able to define the long-term relationship. And I 
hope and expect that you will see a memorandum of agreement. I 
know that our two Deputy Secretaries have talked about that 
most recently, and we are on the path to fulfill that request.
    Senator Reed. I get the impression the Department of 
Homeland Security and the Transportation Security 
Administration, at least up to this point, have refused to 
formally accept responsibility. And the point I would make is 
that if something catastrophic happens, everyone is 
responsible. And so at this juncture, worrying about getting 
all the information and getting it perfect will defeat the 
obvious need for some even rudimentary and preliminary division 
of responsibilities.
    Administrator Dorn. Oh, absolutely. And I would want to 
make it clear that we are working together on a day-to-day 
basis and even in a more concerted way since Madrid. So the 
lack of a specific, defined memorandum has not impeded our work 
together. But I do take your point. For the long-term, that 
document could be important.
    Senator Reed. Well, also for the long-term, Administrator, 
there are some who would feel that legislative authority would 
be the final way to settle disputes between the agencies about 
who should do what. And if we were to proceed with transit 
security legislation separate and apart from our overall 
reauthorization bill, what major operational improvements and 
capital improvements would you recommend we improve in terms of 
transit security?
    Administrator Dorn. In terms of what we have learned from 
the threat and vulnerability assessments, I would certainly go 
back to the very real importance of focusing, particularly at 
the FTA level, on three specific things: The training of 
personnel, emergency preparedness, and public awareness. Those 
are the three items that we believe have the biggest bang for 
the buck, and fundamentally are so important to enhancing 
security.
    In terms of other capital assets that may be required, I 
think that our threat and vulnerability assessments lay the 
foundation, which we have provided to the Department of 
Homeland Security, so that they can prioritize the risks and 
the threats, not only among and between transit agencies, but 
also among and between transportation modes and even other 
aspects of the world in which we live.
    So it is not our desire to have an increased role at the 
FTA, other than the role that we now have in safety and 
security. I think that we are well-served by having a 
Department of Homeland Security that can help us prioritize the 
risks. And from the beginning, FTA has been very serious about 
approaching the problem from a risk-based assessment, and that 
is precisely what the Department of Homeland Security has 
suggested that we continue to do and is, of course, the 
foundation of all of their work. So, I believe that we have the 
appropriate foundation laid to make progress.
    Senator Reed. Again, let me commend you because of your 
active pursuit of issue of transit security, your assessments 
of security in our major systems throughout the country. My 
sense, though, is today we still do not have clearly defined 
areas of responsibility between Homeland Security and the 
Department of Transportation, and Federal Transit 
Administration. We have these huge fissures between the two 
Departments, or maybe narrowing fissures. And our enemies 
exploit these types of divisions. And we have enough, I think, 
evidence in other areas that unless we move expeditiously we 
could have problems.
    And a final point I will make, because the time has 
expired, is that I think if you could share with us the results 
of your surveys, it would indicate a multibillion-dollar 
national demand for improved transportation security measures 
and this budget does not reflect even a small fraction of that.
    Administrator Dorn. Senator, may I just respond to one 
piece of this. I would not want to leave this hearing with the 
understanding that there is a lack of clarity about authority 
for transit security. It is very clearly in the hands of the 
Department of Homeland Security. We can, as partners, continue 
to do our work in the Transit Administration in helping to 
ensure safety and security, and we are eager to do that. But it 
is very clear that decisions are made at the Department of 
Homeland Security.
    Senator Reed. Mr. Chairman, may I just follow up with one 
point?
    Chairman Shelby. Yes.
    Senator Reed. As I understand, the Department of Homeland 
Security budget for transit security is $50 million?
    Administrator Dorn. I believe that they have made available 
$115 million specifically for transit security, but there is 
significantly broader eligibility for transit beyond that.
    Senator Reed. Thank you. Thank you, Mr. Chairman.
    Chairman Shelby. Senator Dole.
    Senator Dole. Thank you, Mr. Chairman, and thank you, 
Administrator Dorn, for your testimony and for the tremendous 
job that you are doing at FTA. Of course, that is no surprise 
since I personally know of your outstanding record in every 
position of public service in which you have been involved over 
the years.
    Now, as you are aware, the Charlotte Area Transit System, 
CATS, and the Triangle Transit Authority, TTA, projects were 
given a special designation in the Administration's fiscal year 
2005 budget. I need to understand what this special designation 
means to CATS and TTA. If CATS and TTA address the specific 
concerns raised by your staff about each project, please tell 
me whether you expect the projects to advance in the New Starts 
process in this or the next fiscal year.
    Administrator Dorn. Thank you, Senator Dole. Both of the 
New Starts projects to which you refer, the Charlotte project 
and the Raleigh project, are good projects. They received a 
recommended rating in our New Starts rating process. And the 
question is not one of worthiness, but of readiness. Both of 
these projects have undertaken some design changes in order to 
improve ridership, and they are working through those. And so 
neither project, although both in final design, has completed 
those steps. We want to make sure that we know exactly the 
costs and exactly the benefits before we could move forward.
    The category that we have placed these projects under, in 
which they get $30 million and $20 million, respectively, 
between Charlotte and Raleigh, signals from the 
Administration's point of view that both of these projects are 
worthy. We have committed through annual appropriations a 
fairly significant portion of the New Starts project funding.
    We want to make sure, however, before we come to Congress 
for its review of a full-funding grant agreement, that we are 
ready behind all of the dollar figures, that all of the i's are 
dotted and the t's are crossed. I believe we have been very 
thorough--and that is appropriate. And we have worked very 
vigilantly with both of the transit agencies to provide 
technical assistance. We are really conscious that any delay in 
a project can mean money. And so we are eager to move forward 
as prudently as possible. At this point, I could not make a 
firm commitment as to when we would be ready to present to the 
Administration and to Congress a full-funding grant agreement, 
but I certainly see no show-stoppers.
    Senator Dole. Now, just to be clear, you are telling me 
that the door is still open to CATS and to TTA to get their 
FFGA's if they can meet all your requirements?
    Administrator Dorn. In the fiscal year 2005 time period, we 
indicated to the Administration in November that we did not see 
it as likely that either of those projects would be ready for 
an FFGA recommendation. However, I have said to both of them 
that if we find that they are able to move forward with the 
requirements in that fiscal year 2005 period, I would be very 
eager and willing to go to the Secretary and to the Office of 
Management and Budget and say these projects are ready, we did 
not expect them to be ready so quickly, but we believe it is 
time to move forward.
    Senator Dole. Thank you. Now, can you tell us how the 
continuing lack of a long-term reauthorization bill might 
affect the FTA's willingness to make long-term financial 
commitments to meritorious transit projects like CATS and TTA, 
if at all?
    Administrator Dorn. Certainly. In fact, it has a very 
significant impact and that is why this Administration is so 
eager for Congress to move forward with the 6-year 
reauthorization bill. We are almost out of commitment 
authority, and so without a reauthorization, many, many 
projects would not be able to move forward in the major capital 
infrastructure account. So we need a 6-year reauthorization 
bill.
    Senator Dole. For some time now, both Congress and the 
executive branch have been working to ensure that the human 
service transportation activities funded in various Federal 
programs become better coordinated, as we have been discussing 
today. And, of course, we are very pleased the President 
recently signed the Executive Order on human service 
transportation that calls for the 10 Federal agencies to work 
together. Now, based on my years of dealing with this 
challenge, both as Secretary of Transportation and Secretary of 
Labor, we have long known that this type of coordination has 
been a very difficult nut to crack.
    Please tell us why it has taken so long to make progress on 
this human service transportation coordination problem.
    Administrator Dorn. It is not due primarily to lack of good 
will. It is a risk-averse attitude, I think. When you have 
programs as different as Medicaid and training programs in the 
Labor Department, each of which have different eligibility 
requirements, different funding requirements, you have 
stakeholders who are eager to get their van for their own 
stakeholders and not necessarily willing to share the ride. 
There are so many issues, that sorting out and focusing on 
those issues, some of which are real and some of which are not, 
at all levels, is really important.
    What this Committee has done in terms of a first step, or 
the next step, really, is to help make this an easier problem 
to solve by requiring all of the community stakeholders to sit 
down at a table together. So, whether it is the Paralyzed 
Veterans of America, or the Diabetes Association, or the 
elderly and disabled programs funded by DOT programs, they all 
sit down together and say what makes sense for this community 
and are able to use flexible funding to fund transportation 
needs in a more coordinated way. I think we have made 
significant progress with a lot of good will. And States have 
provided some very important leadership--including North 
Carolina. They have done a terrific job, and they are very 
eager to improve even on that effort, as well as helping other 
States to initiate best practices, as they have done.
    I feel optimistic. This is a problem that was decades in 
the making. It is not going to be solved overnight, but we are 
already seeing significant improvements. I appreciate your 
interest.
    Senator Dole. Thank you. Thank you, Mr. Chairman.
    Chairman Shelby. Senator Sarbanes.

             STATEMENT OF SENATOR PAUL S. SARBANES

    Senator Sarbanes. I thank you very much, Mr. Chairman. 
Administrator Dorn, welcome back before the Committee.
    Administrator Dorn. Thank you.
    Senator Sarbanes. I am interested, first, in this issue of 
transit security. In your statement, you say in fiscal year 
2005 we request $37.8 million for security initiatives, which 
remain a high priority. Is that correct?
    Administrator Dorn. Yes.
    Senator Sarbanes. It is my understanding that it is not new 
money for security but simply the 1 percent take-down of the 
urbanized formula grant program for all passenger safety and 
security needs, actually a program that has been in effect for 
many, many years. So that does not represent a response to a 
perceived transit security threat, is that correct?
    Administrator Dorn. That is essentially correct. If I might 
just mention, we have tried very systematically to refocus the 
monies that we do have in terms of educating the transit 
agencies and informing them, really many of whom already know, 
about how to make the best investments.
    I would also mention that in the Department of Defense 
supplemental bill of 2 years ago, there was approximately $23 
million for transit security investments, and so we have 
undertaken to do the various things that we talked about in the 
testimony with that money. And there is still a very small 
portion of that that we are targeting to a training program.
    Senator Sarbanes. Later in your testimony you mentioned $50 
million for grants from the Department of Homeland Security. Is 
that correct? To go to 30 different transit agencies?
    Administrator Dorn. That is my understanding of the 
proposal for the fiscal year 2005 budget.
    Senator Sarbanes. And then I think, in response to Senator 
Reed, you said there was $115 million worth of money for 
security. Is that right?
    Administrator Dorn. I believe that part of that is from an 
earlier year appropriation. So, I believe it is $50 million and 
$60 million over 2 years. One is proposed, and one is actual.
    Senator Sarbanes. As I understand it, there are no specific 
funds--those were for 2003 and 2004, as I understand it--$65 
million for 2003, and $50 million for 2004. Is that correct?
    Administrator Dorn. That is correct.
    Senator Sarbanes. As I understand it, there are no specific 
funds for fiscal year 2005.
    Administrator Dorn. To my knowledge, no.
    Senator Sarbanes. Now, why is that? I mean, I think these 
monies are inadequate and I am going to go to that point in a 
minute. But how, under any scenario, could you have no specific 
funds for fiscal year 2005 for this purpose, given--I mean, in 
other words, you have 65, 50, and zero.
    Administrator Dorn. It is my understanding.
    Senator Sarbanes. ``You'' being the Administration.
    Administrator Dorn. I understand.
    Senator Sarbanes. I understand it is not in your budget, it 
is in the Homeland Security budget, right?
    Administrator Dorn. That is correct. It is my understanding 
there is a well over $600 million grant program for which 
transit is eligible, the Urban Area Grant Program. So there is 
eligibility. It is not specifically targeted at transit.
    Senator Sarbanes. Well, WMATA has done a detailed analysis 
of their security needs, which I assume you are familiar with.
    Administrator Dorn. I have not seen it, but I have been 
told, yes.
    Senator Sarbanes. When they estimate they need $70 million 
to implement their security proposals, that is for one transit 
system. Seventy million. And as I understand it, the Department 
of Homeland Security is giving out $50 million for 30 systems. 
Now, that does not strike me as being a high-priority item.
    Administrator Dorn. Certainly one point, or a couple of 
points, if I may, Senator. I have been impressed with the way 
the industry has responded from day one here. They have taken 
every step feasible within existing resources, and I can 
certainly understand that in a survey of funding needs you 
might garner such an assessment. I do think it is important 
that Department of Homeland Security's purpose is really to 
prioritize the risk both among and between transit agencies and 
broader risks, so that we can make sure that we are allocating 
scarce resources, or allocating resources at all, based on the 
highest threat and vulnerability. While I respect the 
professionalism of WMATA in defining its security needs, I 
think the value of Homeland Security assessing from a broader 
perspective where are the vulnerabilities is really important. 
And that is what we found in our threat and vulnerability 
assessments. These had to be done locally and then they had to 
be factored into a broader portfolio.
    Senator Sarbanes. Let me pursue that for a moment, because 
Senators Warner, Allen and Mikulski and I have written to 
Secretary Ridge about urgent emergency preparedness in the 
National Capital Region, which is to follow up on the WMATA 
request in particular, pressing them to make more money 
available. Now, should we have sent that letter to you as well, 
or are you completely out of the loop on transit security?
    Administrator Dorn. Certainly, we----
    Senator Sarbanes. And I am looking here and I realize that 
we did not send it to you, and I think maybe we overlooked a 
fruitful target. But the answer you just gave me would imply 
that you are not an advocate for transit, that it has all been 
bounced over to the Homeland Security Department.
    Administrator Dorn. I would not want to give that 
impression.
    Senator Sarbanes. You were very explicit in responding to 
Senator Reed that it was not your bailiwick. I was very struck 
by that.
    Administrator Dorn. The ultimate decision-making authority 
about how we prioritize risks and resources is in the hands of 
the Department of Homeland Security.
    Senator Sarbanes. Do you think the Department of Homeland 
Security is under-prioritizing the risk and need that exists in 
the area of transit security?
    Administrator Dorn. If I might just say the second half to 
the first question is that, from our perspective, we continue 
to be actively engaged with the Department of Homeland 
Security, providing them information as we have it and 
continuing our training, emergency response, and public 
awareness programs. We are not getting out of the 
responsibility.
    Senator Sarbanes. Do you think that the information you 
have provided, then, would lead a reasoned, objective 
decisionmaker to conclude that more money is needed than what 
is currently being provided for transit security?
    Administrator Dorn. I am not in a position to know whether 
transit is more or less at risk than port security or aviation 
or the banking industry.
    Senator Sarbanes. Well, I am not asking you to do the 
balance. Let me just ask you this question----
    Administrator Dorn. But I think that is the key issue, 
Senator.
    Senator Sarbanes. Within the realm of transit security, do 
you think sufficient resources are being devoted to that 
purpose?
    Administrator Dorn. Within the realm of transit security, I 
believe that we understand well at FTA what the priorities 
should be in terms of the kinds of things to fund. But I do not 
think we are in a position for the entire Government to be able 
to assess where----
    Senator Sarbanes. I am not asking you to make that----
    Administrator Dorn. Well, I would like to answer the 
question, but I could not answer it clearly and objectively, 
because I think that the risk assessment has to be done by 
experts who see the whole picture.
    Senator Sarbanes. Let me concede that point to you at the 
moment.
    Administrator Dorn. Okay.
    Senator Sarbanes. From your perspective, from your end of 
the telescope, do you think enough resources are being devoted 
to transit security?
    Administrator Dorn. I respect the decisions of the 
Department of Homeland Security.
    Senator Sarbanes. No, no, no. No, you cannot get away with 
that.
    Administrator Dorn. That is what I want----
    Senator Sarbanes. Look, what do you think----
    Administrator Dorn. Can I not tell you what I really think? 
I think it----
    Senator Sarbanes. What do you tell the Department? Are you 
telling the Department of Homeland Security that you need more 
money for transit security?
    Administrator Dorn. We tell them that, whatever you think 
is appropriate to invest based on your look at the total 
picture, we think that the priorities for investment should be, 
one, based on the risk and vulnerability assessments, and two, 
on the most effective means of protecting transit--public 
awareness, emergency response, and training.
    Senator Sarbanes. Well, you have just gone way out on the 
transit line, because if something happens, this response is 
going to come back to haunt you. I just observe that. And it 
seems to me totally unnecessary, indeed erroneous, for you to 
make this response given the challenges that you confront in 
transit security. We need to know whether, as a transit 
administrator, you think enough resources are being put into 
transit security. Now, the Department of Homeland Security may 
say, well, that administrator, she was looking for a lot more 
money but we just did not have it, and we had a balance--
transit and port and air and all the rest of it--and this is a 
balance we took. But you are telling me that you are doing that 
balance yourself.
    Administrator Dorn. No.
    Senator Sarbanes. Who is the advocate for transit security 
of this Administration?
    Administrator Dorn. The FTA has been an aggressive advocate 
toward meeting the needs of transit security. And as an 
appointee of the Administration, I would feel equally as guilty 
if, after aggressively advocating a dollar amount, the next day 
the target was instead another target, in port security or 
whatever. Because I have one point of view. And I think that is 
why this Congress and the Administration agreed it was 
imperative to have a Department of Homeland Security to assess 
the risks. And I will not back away from the perspective of 
being an aggressive advocate for meeting the needs of transit 
security to the degree that those risks and vulnerabilities 
have to be taken into account.
    Senator Sarbanes. So you think that enough money is being 
put into transit security?
    Administrator Dorn. I am not in a position to judge that. 
That has to be done by the Department.
    Senator Sarbanes. You are the transit administrator. From 
the point of view of the transit administrator----
    Administrator Dorn. But I am not the port administrator, or 
the FAA administrator.
    Senator Sarbanes. Do you think enough money is being put 
into transit security?
    Administrator Dorn. I think I have answered the question.
    Senator Sarbanes. In other words, you think enough money is 
being put in.
    Administrator Dorn. Senator, I am not in a position to know 
that.
    Chairman Shelby. Ms. Dorn, do you not head up the Transit 
Security Administration.
    Administrator Dorn. No.
    Chairman Shelby. That is the point. Two different agencies, 
are they not?
    Administrator Dorn. Yes. That is correct.
    Chairman Shelby. One is tasked with security.
    Administrator Dorn. Correct.
    Chairman Shelby. You are concerned with security, as we all 
are, but that is somebody else's bailiwick. Is that correct?
    Administrator Dorn. That is correct. We want to provide as 
much information as possible and we want to make sure that we 
have a seat at the table, so that the needs and concerns of 
transit are factored into the very rigorous assessment that the 
Department of Homeland Security undertakes. And that, I 
believe, is my job.
    Senator Sarbanes. Well, I sharply disagree with you. I 
think you have a responsibility to indicate to us what you 
think the needs for transit security are and whether adequate 
resources are being devoted to it.
    Administrator Dorn. Well, certainly, with the discretionary 
money that we have at our----
    Senator Sarbanes. Secretary Ridge would come in here and he 
would have to say, well, look, I have these competing claims. I 
have this amount of money and this is what I am trying to do. 
But that is not your situation.
    Administrator Dorn. It has to be based on intelligence. And 
I see a significant amount of intelligence, but I do not see 
the whole panoply, and I am not in a position to make that 
judgment.
    Senator Sarbanes. What does the intelligence you see tell 
you about the need for transit security?
    Administrator Dorn. That certainly transit can be a target. 
That is why we have aggressively pursued the mechanisms that I 
have described, and that is why we are insistent that we have a 
seat at the table, as those decisionmakers make the decision.
    Chairman Shelby. Senator Reed, do you have another 
question? We have a vote on the floor.
    Senator Reed. Mr. Chairman, I agree with Senator Sarbanes. 
I have great respect for the Administrator, but I think you 
have to be an advocate at the table for transit, and that, I 
think, implies a knowledge of the demand for additional 
resources. And I would just conclude that it is insufficient. 
We recognize that there are port security issues, et cetera, 
but as Senator Sarbanes said, Governor Ridge could make the 
case that he is prioritizing, but I think you are the expert in 
transit in this Administration, not just in the commercial 
aspects but the security aspects. But to simply say, I have no 
opinion on this, I think, leaves us without information we need 
to do our job.
    That is an observation, not a question. Thank you.
    Chairman Shelby. Ms. Dorn, you did not say you had no 
opinion on this, as I understood it, did you? Did you say you 
have no opinion? You are the Administrator for transit, but you 
are not the head of TSA, right?
    Administrator Dorn. Correct.
    Chairman Shelby. Is that not what you are trying to say?
    Administrator Dorn. Yes, but apparently I have not said it 
very well.
    Chairman Shelby. And you do have some input and you should 
have a voice, at least to speak with Secretary Ridge about your 
transit concerns, which are also our concerns.
    Administrator Dorn. And we have done that.
    Chairman Shelby. We all believe that transit is vulnerable, 
do we not?
    Administrator Dorn. Yes.
    Chairman Shelby. We have believed that a long time.
    Administrator Dorn. Correct.
    Chairman Shelby. Transit move millions of people in 
transportation systems every day. We do not want to give 
anybody any ideas they have not thought of, but you are not 
saying that is not a part of your responsibilities, but that is 
not your primary area of expertise. Although you will try to 
address secutiry concerns, will you not?
    Administrator Dorn. I need to bring to the table everything 
I know about the threats and vulnerabilities, and I take that 
responsibility very seriously.
    Chairman Shelby. You are concerned with security.
    Administrator Dorn. Absolutely. But in terms of trying to 
decide where the resources go among and between competitive 
needs and threats, that happens in a different department at a 
higher level. And my job is to make sure that my Secretary----
    Chairman Shelby. You are speaking of Secretary Ridge?
    Administrator Dorn. Pardon me?
    Chairman Shelby. You are referring to Secretary Ridge, who 
is the Secretary of Homeland Security.
    Administrator Dorn. Exactly.
    Chairman Shelby. Which is a cabinet position.
    Administrator Dorn. Yes.
    Senator Reed. Is that your reference?
    Administrator Dorn. Yes.
    Chairman Shelby. Thank you.
    Administrator Dorn. And we do not hesitate to make our 
viewpoint known and provide every piece of information, and we 
will continue to do that, because we know there are competing 
priorities there. We want to make sure the information is 
analyzed, so that they can make a judicious judgment. And I 
believe that----
    Chairman Shelby. In due respect, security of our transit 
system has to be--especially in today's environment--one of our 
highest priorities.
    Administrator Dorn. It is for me.
    Chairman Shelby. So you agree?
    Administrator Dorn. Yes, absolutely.
    Chairman Shelby. Thank you.
    Ms. Dorn, we have a vote on the floor. We appreciate your 
appearance here and we appreciate the job you are doing. Please 
continue your good work.
    Administrator Dorn. Thank you very much.
    Chairman Shelby. If we can have the second panel take their 
seats at the table, we can begin with William Millar, President 
of the American Public Transportation Association; Dale 
Marsico, with the Community Transportation Association of 
America; Timothy Martin, who in addition to being the Secretary 
of Transportation for the Illinois Department of 
Transportation, represents the American Association of State 
Highways and Transportation Officials. Finally, Rolf Lundberg, 
Jr., Senior Vice President of Congressional and Public Affairs 
for the U.S. Chamber of Commerce.
    We look forward to hearing from you. The hearing will 
continue after the vote. Thank you.
    We will be in recess.
    [Recess.]
    Chairman Shelby. Gentlemen, thank you for waiting. The 
hearing will come back to order. Mr. Millar.
    Mr. Millar. Nice to see you again, Mr. Chairman.
    Chairman Shelby. Thank you. All of your written testimony 
will be made part of the Committee record. You may proceed.

             STATEMENT OF WILLIAM MILLAR, PRESIDENT

           AMERICAN PUBLIC TRANSPORTATION ASSOCIATION

    Mr. Millar. Yes, sir, I will be glad to. First, let me 
thank you on behalf of the 1,500 members of the American Public 
Transportation Association for holding this hearing today, and 
for your continued interest and support in public 
transportation. I believe this is the first time I have been 
able to appear before the Committee since you passed the 
landmark SAFETEA Act that you referred to in your opening 
statement. We are just very pleased about it.
    Chairman Shelby. We passed.
    Mr. Millar. That is what I say you, the Committee, passed.
    Chairman Shelby. You cannot do anything by yourself up 
here.
    Mr. Millar. Yes, sir. We appreciate the bipartisan approach 
that was used in that bill and hope that your friends across 
the Hill will see fit to likewise move ahead. In fact, Mr. 
Chairman, when my board of directors met on March 7, they 
passed a resolution both endorsing the SAFETEA legislation and 
in praise of the hard work of the Committee here.
    We believe that having done that, we support for the fiscal 
year 2005 budget at least the funding levels that this 
Committee had included in the SAFETEA bill. So we urge the 
Congress to approve a fiscal year 2005 appropriation for public 
transit that is not less than $8.655 billion. We think that 
investment of that level helps advance key national goals of 
producing jobs, improving mobility, expanding public 
transportation options across the country, reducing the 
dependence on foreign oil, and that there is a solid return on 
investment that the Government makes.
    Now in contrast with the good work of the Committee we do 
not think that the Administration's proposal of some $7.266 
billion, a freeze budget, is good policy. In fact, we think it 
is bad policy. If you factor in inflation, it is not even a 
freeze budget, it is actually a cut in funding. We support what 
the Committee has done and the position that several Senators 
on the Committee today have expressed, and we are very 
disappointed in the Administration's budget.
    We think that over the last several years, particularly 
under TEA-21, we have seen under this Committee's leadership, 
the funding for public transit grow from some $4.4 billion per 
year back in 1997 to $7.2 billion in 2003, and I think 
impressive results have come back from that investment. We have 
seen ridership at the highest levels in years, the numbers of 
new transit systems in both urban and rural areas growing at 
dramatic levels, improvements to existing systems, et cetera. 
So we think that it has been a very good investment; and that 
more investment is necessary.
    In fact our friends at the American Association of State 
Highway and Transportation Officials in their Bottom Line 
report conclude that we really should be investing as much as 
$44 billion a year to both maintain adequate public 
transportation and expand it across the country. So we 
certainly need increased investment.
    The President's budget also is troubling in that it makes 
changes to their reauthorization proposal that they announced 
last spring. That proposal was modest enough and we have 
expressed our concern about that to the Committee on other 
occasions. But their budget would even cut $2 billion for 
transit from their earlier proposal. So we just think that is 
not the way to go on that.
    We find it somewhat troubling and really do not understand 
it, because certainly the Administration, like all of us, are 
concerned about improving the economy, creating jobs, and doing 
all the other things that are important for our Nation. We know 
that the Department of Transportation tells us that for every 
$1 billion invested in transit some 47,500 jobs are created and 
sustained. So we do wonder about that.
    We also know that the kind of investment that this 
Committee has advocated is not only good for our public-sector 
members but is also good for our private-sector members too. We 
know it is not just the big cities that benefit from this 
investment. Beyond the obvious expansion needs of rural 
transportation that you have already spoken of, sir, we know 
that buses, for example, are built in places like Anniston, 
Alabama and Lamar, Colorado, and Greensboro, North Carolina and 
a number of other cities around the country. It is not only the 
service that accrues to the American public from these kind of 
investments, but it is also the jobs, it is the economic 
benefit that results as well.
    We know from studies that every $10 invested in transit 
capital projects generates some $30 in private-sector business 
sales; every $10 in transit operations generates some $32 in 
private sales. So we know these things are true.
    We also know that the American public supports increased 
investment. A recent survey by the firm of Wirthlin Worldwide 
showed a number of interesting factors. The survey was 
completed in late February. Eighty percent of Americans saw 
quality of life benefits and understood that increased 
investment in public transportation was good for them and good 
for communities. Seventy-six percent supported public funding 
for the expansion and improvement of public transportation, and 
more than two-thirds would be more inclined to support 
candidates for Congress who support investment in public 
transit.
    The interesting thing, we have been doing these polls for a 
series of years and we have seen an interesting phenomenon. 
These kind of positive results we often got in urban areas, but 
in recent years and particularly this year, we see these polls 
cut across all lines, whether it is large urban, small urban, 
rural areas, suburban areas, all parts of the country. There is 
now less than, I think it is six points difference between 
urban and rural answers on those questions. I think the country 
as a whole is understanding this and we certainly want to work 
with you in this regard.
    Before I close, and given the focus earlier in the meeting 
on security, perhaps I could say a few words about transit 
security. First, after the horrific events of September 11, 
2001, Senators Reed and Allard convened an oversight meeting of 
the Transportation Subcommittee and I was privileged at that 
time to bring them up to date on what some of the plans were of 
how transit was starting to deal with the tragedies. Now, two 
and-a-half years later, I can show you solid results.
    I want to give credit where credit is due. We have had a 
very good partnership with the Federal Transit Administration 
and we have been very pleased with their cooperation in many 
areas, particularly in research, in threat assessments, 
vulnerability assessments, and those type of things. We have 
worked very closely with the Federal Transit Administration. 
Although, as the Committee probed this morning, as 
responsibilities have been shifted to the Department of 
Homeland Security, attention has not necessarily focused on 
transit the way we believe that it should have.
    Nonetheless, we have pursued strengthening our resolve as 
far as security issues go. A recent survey that we completed of 
our members showed a number of interesting results. We asked 
our members, for example, how much have you been investing in 
homeland security since September 11, 2001 and it came back 
that we have spent and invested over $1.7 billion. That money 
has come almost exclusively out of their budgets. In other 
words, the fare box, local taxes, State taxes, however it is 
that they might be funded in their community. Yes, there has 
been some small amount of Federal money made available in some 
communities, but largely it has been a response from State and 
local resources.
    We asked our members, now that you have been at this issue 
of security for a few years, you have experience, you know what 
works--I think Ms. Dorn correctly pointed out the different 
strategies that seem to work best--what kind of funding is 
necessary? From that survey we were able to produce an analysis 
that shows we need both capital money, one-time money, as well 
as operating money over and above what State and local 
governments are already spending. The overall number that we 
have derived is about $6 billion, some $5.2 billion of that 
being additional capital and other one-time costs, about $800 
million being for increased operating costs, continuing 
research needs, things of that sort.
    I will be happy to supply the Committee with a more 
complete list. We expect the study to be----
    Chairman Shelby. You can submit that for the record.
    Mr. Millar. Yes, sir, I would be glad to, and we expect the 
study to be fully analyzed within the next 2 weeks and I would 
like to submit that to you. That will also have our funding 
priorities in these areas.
    We would ask the Committee's help. We have been talking 
with the Department of Homeland Security. We are very 
disappointed that the President's fiscal year 2005 budget 
proposal does not include a line item for transit security. As 
was mentioned earlier, in the 2004 and 2003 budgets, the 
Department of Homeland Security did set aside small amounts of 
money. But in the 2005 budget we are told to compete with every 
other need that is in the country. I certainly understand the 
point about the need to prioritize, but our experience is, the 
way the urban system money in that Department gets divided up, 
transit has yet to receive its first dollar that was not 
earmarked for it.
    So Mr. Chairman, we certainly want to work with you and the 
Members of the Committee to see if transit needs can be 
correctly identified, and then if steps can be taken to amend 
the President's budget or whatever the proper procedure is in 
the Senate to see if we cannot make some funding available to 
improve security in our systems.
    In short, Mr. Chairman, we thank you for holding this 
hearing. We fully support the Banking Committee's efforts to 
get a good long-term reauthorization bill. We would hope that 
the appropriation for public transit investment in the coming 
year is not less than the Committee included in the SAFETEA 
legislation, and we would ask your help in getting more focus 
and more funding put into transit security needs.
    At the proper time I would be pleased to answer your 
questions, sir.
    Chairman Shelby. Thank you. Mr. Marsico.
    Mr. Marsico. Thank you, sir.

                  STATEMENT OF DALE J. MARSICO

                 EXECUTIVE DIRECTOR, COMMUNITY

             TRANSPORTATION ASSOCIATION OF AMERICA

    Mr. Marsico. I would like to begin be thanking you for 
inviting me to be here today. There are many things in my 
written testimony that are very supportive of the work the 
Committee has done over the last several years, and especially 
in its efforts to reauthorize the transportation programs.
    I think it is very interesting that almost exactly 2 years 
ago this week in this very room that the process on 
transportation reauthorization began in the first hearings that 
were held by the Banking Committee taking a look at our 
investments in America's transportation future. Two years of 
the solid research, 2 years of hearings, 2 years of testimony 
have resulted in your landmark legislation that you passed 
which is significant progress for all parts of America's 
transportation systems. As you know, we have traditionally been 
very supportive advocates of expanding transportation options 
in the public sector for people who live in rural communities 
and for our seniors. Over the last 10 years, public 
transportation has reached out to provide greater levels of 
service to all of those people, and your bill and your 
legislation recognizes that and rewards that work.
    We feel that people that live in communities, regardless of 
size, all have a stake in what public transportation can do for 
them. And as our country ages and as we have more older people 
living in rural communities, it is essential that we expand 
rural transportation options for all of those people, and your 
bill does that.
    When you look at what we heard here in this room 2 years 
ago about all the good things that transit could do, all the 
returns on investment that transit can provide to communities 
regardless of size, it is almost like that line from the T.S. 
Eliot poem where we return to the place we started and it is 
still the same. Everything we knew then is true today, and 
everything that we said we needed to do for transit, we needed 
to do.
    Unfortunately, the Administration does not share our views. 
Their proposals and their hold-harmless funding for transit, as 
Mr. Millar so well stated, the inflation in key transit areas 
in terms of cost has continued over the last 2 years so even a 
hold-harmless budget is nothing more than a reduction, because 
the cost of meeting our current obligations will not leave us 
with sufficient resources to expand programs to benefit more 
seniors or more rural communities, which is why we support what 
you did. When we look at the proposals from the Administration, 
when we look at the work of S. 1072, there is no other choice 
for us than to say that Federal funding for fiscal 2005 and 
2006 should be based on your work and not on the 
Administration's projections.
    In the work that lies ahead, I know that inevitably there 
is going to be a House bill and sooner or later there will be a 
conference. I am here to urge you to take the values that are 
in S. 1072 and taken them into that conference and to take them 
into the fight with the Administration, because if we do not 
have those numbers we will not advance to fill unmet needs; we 
will lose ground. I think as we learned when we talk about 
September 11, or we talk about natural disasters, we talk about 
what happened last year when we had the energy blackout, in all 
of these cases transit played a critical role in moving 
Americans to safety. And last summer it played a critical role 
in sheltering our seniors in high-rise buildings who were then 
in transit buses because it was the only air-conditioning they 
could find in very hot weather. These are all the good things 
that transit does that do not necessarily get factored into the 
statistical formulas that people like to use when they describe 
our industry.
    Our testimony talks a lot about people, individual stories 
about individuals that transit makes an important difference in 
their lives. They live in every community, big and small, and 
they are the people that we should be most concerned about.
    Last, on the issue of security, we did mention in our 
testimony that we thought that one of the overlooked areas in 
transit security remains the fact that we do not have any 
national reserve of buses or rail cars for a national disaster 
or for a terrorist attack. We also think that there needs to be 
sufficient stockpiles for fuel and other vital resources that 
keep transit moving should there be a natural disaster or a 
terrorist attack. We think that area does need to have a 
significant review.
    Last, I just want to say this. When we look at the work 
that you did, I think it is very significant to note that the 
first transportation bill to pass in America by any House of 
Congress in the 21st century is your bill, and it is a mighty 
good place to start for all parts of the transportation 
community. But for the rural parts of the community, for people 
who are interested in seniors, for people who have unmet needs, 
your bill is better than that. Your bill is the way forward for 
all Americans, and I want to thank you on behalf of our 7,000 
members and the people who use our transportation services and 
theirs. Without your work we would not have the kind of future 
that we need, so thank you very much, Mr. Chairman.
    Chairman Shelby. Thank you.
    Mr. Martin.

                  STATEMENT OF TIMOTHY MARTIN

             CHAIRMAN, STANDING COMMITTEE ON PUBLIC

         TRANSPORTATION OF THE AMERICAN ASSOCIATION OF

           STATE HIGHWAY AND TRANSPORTATION OFFICIALS

        SECRETARY, ILLINOIS DEPARTMENT OF TRANSPORTATION

    Mr. Martin. Thank you, Mr. Chairman. It is a privilege to 
be here representing both the State of Illinois and the 
American Association of State Highway and Transportation 
Officials. On behalf of that organization we would like to 
thank you for your leadership in passing Senate bill 1072. We 
believe the $318 billion that you passed serves as a wonderful 
floor for transportation funding as we go forward.
    As you said, Mr. Chairman, we are midway through our second 
short-term extension of TEA-21. We are also entering the summer 
construction season. We need to get going and we ask that 
everyone involved work quickly to get a bill passed and get a 
bill signed so that projects can go forward.
    The Administration's request has been documented here today 
as well below all transit needs. It threatens a serious setback 
in funding and it threatens a serious setback in transit 
throughout the country. The work of TEA-21 led to a 22 percent 
increase in transit ridership throughout the country. This 
brings the number of rides to a 40-year high. This is something 
significant and something which should be built upon rather 
than taken down from.
    What does transit provide? Transit provides a reduction in 
traffic congestion and enhances the efficiency of the highway 
transportation system. It also provides access to jobs to 
people who do not have access to automobiles. As has been said 
here, it also provides access to the young, to the old, and 
those who are disabled. And most importantly, it conserves 
energy and reduces air pollution.
    The Administration's budget proposal would basically freeze 
transit funding at the 2004 levels bringing $7.3 billion, $6 
billion from the highway trust fund drawdown and $1.3 billion 
from general funds. The U.S. DOT's most recent conditions and 
performance report says that it requires an annual investment 
of $20 billion simply to maintain. Now we understand that in 
these tough times it is difficult to get everything that we 
need. But we are not even funding at half the level of the 
stated needs of the U.S. Department of Transportation.
    AASHTO's own bottom line analysis says that we need $19 
billion, and as Mr. Millar said, $44 billion to improve 
service. We are not even scratching the surface of those needs 
to improve transit funding.
    In my own home State of Illinois TEA-21 made significant 
strides in improving transportation. Between the rural program 
that was started, we support the common sense changes that you 
have talked about here today. We support those in Illinois 
because only have two-thirds of our counties have access to 
rural transportation. One-third does not. That is something 
that we need to change.
    Illinois FIRST, in combination with TEA-21, allowed us five 
New Start projects. That is significant. But we will not 
continue to make the gains at the current funding levels that 
we have proposed today. We are talking about jobs in Illinois. 
Our Governor has started jobs programs, construction programs, 
to provide much-needed jobs throughout the State. The funding 
levels brought here today by the Administration do not increase 
jobs anywhere.
    State transportation officials believe that the transit 
program provisions of TEA-21 have stood the test of time and 
should be maintained. While guaranteeing funds from the mass 
transit account of the Highway Trust Fund, the Administration 
would not guarantee the General Fund. That is troubling to us. 
States and transit agencies need stable funding commitments to 
plan major infrastructure projects throughout the country. The 
Administration calls for reducing Federal funding for New 
Starts from 80 percent to 50 percent. Given everybody's well-
known funding problems throughout the States, this will not 
help improve transit throughout the country.
    The Administration proposes to restructure a program so 
that 80 percent of the New Starts come from general revenue 
funds. These same general revenue funds which they do not 
propose to guarantee. This will cause even more issues with 
starting New Start project throughout the country.
    Giving the States flexibility to fund some of the security 
activities out of highway trust funds is a positive. But as has 
been demonstrated here today, there are not enough funds for 
security issues.
    Continuing the ability to allow States to flexibly transfer 
funds between highway and transit is a good thing. Doubling 
Federal rural transit assistance is also a good thing.
    In summary, the Administration's proposed flat-line funding 
for transit in fiscal year 2005 is inadequate to address job 
access, job creation, needs for transportation for elderly and 
disabled. We support the $8.65 billion you have voted on and we 
will do whatever we can to help support passage of a bill in 
conference committee.
    Thank you very much.
    Chairman Shelby. Thank you.
    Mr. Lundberg.

              STATEMENT OF ROLF TH. LUNDBERG, JR.

             SENIOR VICE PRESIDENT OF CONGRESSIONAL

          AND PUBLIC AFFAIRS, U.S. CHAMBER OF COMMERCE

    Mr. Lundberg. Thank you, Mr. Chairman. Good afternoon. My 
name is Rolf Lundberg. I am Senior Vice President for 
Congressional and Public Affairs at the U.S. Chamber of 
Commerce. I am here today representing the Chamber's 3 million 
businesses as the world's largest business federation. I would 
like to address the Administration's proposed fiscal year 2005 
budget for public transportation and the importance of public 
transit in our multimodal transportation network.
    Mr. Chairman, the U.S. Chamber of Commerce is, to echo your 
words, very disappointed that the Administration's proposed 
fiscal year 2005 budget which indeed freezes public transit 
funding at last year's investment levels. Our Nation's public 
transportation system is critical to our future economic 
growth, to our international competitiveness, quality of life, 
and national security. The Chamber of Commerce has urged 
Congress to increase public transportation funding. It is a 
proven investment that creates jobs and generates economic 
growth.
    We are happy that this Committee and you, Mr. Chairman, 
have worked so hard to significantly increase investment in 
public transportation in the transit title of S. 1072. The 
Chamber applauds this Committee's effort to remain firm in its 
commitment to increase funding for transit. With a short-term 
extension of TEA-21 that is set to expire at the end of next 
month and infrastructure requirements continuing to grow, now 
is certainly not the time to flat line investment in our public 
transportation system.
    Public transportation is taking on an increasingly 
important role in America's multimodal transportation network. 
Over the last 6 years, transit use has grown faster than 
population growth. These ridership gains are directly 
attributable to the significant Federal investments in public 
transportation. In 2001, each American traveling during peak 
periods wasted an average of 60 hours a year, nearly 8 full 
working days, simply in traffic congestion. In that same year, 
congestion cost America nearly $70 billion in wasted time and 
fuel.
    Across America, investment in public transportation is 
paying off. Transportation accounts for approximately 17 
percent of our GDP, and for American families transportation 
represents about 18 percent of household spending, the second-
largest household expenditure after housing.
    Without the option of providing strong investment in public 
transportation to State and local governments, we will feel the 
consequences of a subpar system, congestion, decreased 
productivity, more accidents, and a diminished quality of life. 
The U.S. Department of Transportation data show that a minimum 
of $60 billion per year of Federal investment is needed to 
improve and maintain the current physical conditions of the 
Nation's highways and bridges. DOT estimates that $20.6 billion 
in capital investment is needed annually just to maintain and 
improve current public transit services. We currently spend 
about $7 billion a year. To meet these current challenges we 
must invest more of our limited resources in a better and more 
efficient manner.
    Mr. Chairman, we applaud the work of this Committee for 
developing a package that significantly increases Federal 
transit authorizations with appropriate budgetary protections. 
We firmly believe that S. 1072's authorizations of $255 billion 
for highways and $56.5 billion for public transportation and 
guaranteed funding levels are the bar minimum that should be 
accepted for any 6-year TEA-21 reauthorization bill. Therefore, 
we believe any legislation below the Senate investment number 
for a 6-year bill would be unacceptable. As the House prepares 
or is debating or will be debating a $275 billion bill, we urge 
this Committee and the Senate to continue to insist on a $318 
billion level in conference.
    In closing, Mr. Chairman, the U.S. Chamber of Commerce will 
continue to advocate for increased investment in transportation 
infrastructure. The impact of freezing public transit funding 
at current levels will increase congestion, decrease safety on 
our roads, and set back our ability to improve air quality. 
Public transportation is a critical component in a national 
transportation system. Increasing capacity on modes of 
transportation is needed to meet the growing passenger and 
cargo demands.
    The U.S. Chamber, and for that matter chambers of commerce 
throughout the Nation at the State and local levels and the 
business community, look forward to working with you and this 
Committee and the President to support funding the Nation's 
surface transportation needs, and at a minimum to support the 
authorized and guaranteed investment levels in S. 1072. This 
investment in transit will ensure that we provide a quality of 
life that all Americans deserve.
    Thank you, Mr. Chairman. I will be happy answer any 
questions you or any other Member may have.
    Chairman Shelby. Mr. Lundberg, if you have the information 
with you, could you tell me, what the impact would be on 
transportation-related businesses nationwide if we were to 
enact into law a comprehensive surface transportation bill that 
is funded at $318 billion? What would be the impact, first on 
transportation-related businesses and second, on the economy as 
a whole?
    Mr. Lundberg. Mr. Chairman, the business community is, of 
course, very concerned about the impact on the economy. The 
short answer is it would be extremely favorable. What we do 
know is that Government investment in infrastructure stimulates 
the economy more than just about any other form of fiscal 
policy.
    Chairman Shelby. It would mean significant job creation, 
would it not?
    Mr. Lundberg. It would be a heck of a lot of jobs, and has 
been noted at this panel, that number is approximately 47,500 
jobs per billion dollars spent. It is an extraordinary return 
on investment in transportation, and it would have an 
extraordinarily positive impact on the economy and on 
businesses in this sector, yes.
    Chairman Shelby. Mr. Millar, in addition to the funding, 
there are several new initiatives, S. 1072, that I, Senator 
Allard, and others felt were important steps towards advancing 
the role of the private sector in providing public 
transportation services. Specifically, we adopted the 
Administration's proposal to allow private operators of public 
transportation to qualify as sub-recipients of grant funds. 
Would APTA, like the Committee and the Administration, agree 
these changes present an opportunity for positive reform?
    Mr. Millar. Yes, sir, we do. We think that the steps you 
have taken, which is really a continuation of policy directions 
you have taken over the years, are very good policy directions 
indeed. Ours is an industry that if we were speaking 30 years 
ago, people did not see much role for the private sector. But 
for a variety of reasons, including the investment in our 
industry that this Committee has overseen over those decades, 
it is now a much more attractive place for many businesses to 
do business. We think the provisions you put in your bill, that 
we hope will become law, are a great step in that direction, 
sir.
    Chairman Shelby. In your opinion, what would be the impact 
on the industry and on transit riders nationwide if the 
Congress were to flat-line transit spending?
    Mr. Millar. Less service, higher fares, less ability for 
people to travel, fewer people able to get to jobs, less people 
able to get to job training, fewer people able to get to 
school, less opportunity, more disparity in our economy. The 
list goes on and on.
    Chairman Shelby. Increasing rural connectivity and 
providing opportunities for service in small communities 
nationwide was an important goal in crafting S. 1072, as you 
may know. If those provisions become law, can you tell the 
Committee what you believe the impact will be on the 
communities you represent, specifically rural communities?
    Mr. Marsico. I am think, as we said in our testimony and 
have said at many times before this Committee, the dynamics 
have changed in rural America, are such that we have greater 
numbers of older Americans who live in rural communities, and 
we also live at a time when their basic health services, their 
basic way of doing business in the world has moved further from 
them, especially since in health care more outpatient 
medication is usually located in more distant urban areas. 
Consequently, rural transportation becomes much more of a 
priority for them. Any lack of investment or addressing the 
fact that that population in rural communities, as you know in 
your own State, continues to grow older.
    We have to have investment to have more flexible programs 
that can be developed in the local communities and in rural 
States that can meet those needs. I think if we look around the 
country we will see that these programs return huge investments 
in terms of the quality of life for our older citizens in rural 
communities for very small dollar investments.
    I think the other thing that is very clear if you look at 
America's network of rural transportation, some of it is faith-
based, some of it is nonprofit, some of it is publicly based. 
When you look at that quilt of services you also find a high 
degree of volunteers and community people involved at all 
levels as part of that process. The special thing about rural 
transit is, it spans all of those organizations in a way that 
helps make communities stay viable. So anything that 
contributes to that obviously makes that quality of life 
better, and anything that we do in that area is going to cost 
us a lot less for the returns that we are going to get.
    Chairman Shelby. Is there a nexus between public transit 
and access to health care?
    Mr. Marsico. I think in the studies that we did when we 
tried to interest the Senate in taking a look at this as part 
of the Medicare issue, that we find that based on studies done 
by the General Accounting Office, especially in rural 
communities, it cost the Government somewhere between $700 and 
$800 for an ambulance trip for a senior to a medical facility 
when there is no access to public transit. Compare $700 or $800 
to the average public transit cost for that trip was between $8 
and maybe $18 at the highest level. So, I think in terms of 
that it is an obvious mix, it is an obvious issue that we tried 
to address in the Medicare bill, and I appreciate your work, 
and that of Senator Dodd, in trying to make that a priority in 
terms of programs for senior citizens in rural communities, 
that we get medical transportation out front.
    If we really want to make improvements in lowering the cost 
of Medicare and other entitlements, it is always in outpatient 
medicine. But outpatient medicine without public or community 
transportation, that is not ambulance-based, is not going to be 
an effective way to deal with that. Again, if we maintain and 
improve the network of transportation then people can stay in 
their home communities and stay out of institution, which no 
one would choose for themselves.
    Anything that we do in that situation makes it better. The 
numbers are there. The GAO says it is a good idea, and your 
bill, your work, the work of Senator Dodd, is exactly where we 
need to take this issue.
    Chairman Shelby. Thank you. Mr. Martin, in your testimony I 
was struck by a reference you made to some 37 counties in your 
home State of Illinois that are devoid of any public 
transportation services. That is probably true of many areas 
across the country. Has AASHTO done an analysis of particular 
provisions in S. 1072 which would have an impact on the 
unserved and underserved communities that you reference, in 
Illinois but also in other States across the country?
    Mr. Martin. I think the gains in TEA-21 are continued with 
Senate bill 1072 and I think that is very important. The 
difference, when you look at Administration's bill, while they 
talk about combining things, that is very good but it is the 
funding that the needs to be presented to make these things 
work.
    Chairman Shelby. How many counties do you have in Illinois?
    Mr. Martin. We have 102 counties.
    Chairman Shelby. So a third of them, more or less.
    Mr. Martin. Yes, so a little more than a third are not 
served by any transit. We believe that by combining some of 
these programs, taking some common sense measures, we can make 
the same dollars or more dollars go farther. I think that is 
true of many States. In urban areas, I think as has been said, 
it is a little easier to get there. But we have some counties 
that have no medical service so you have to cross county to 
county to get to a doctor, and that is not fair for people who 
cannot drive a car or cannot afford a car.
    Chairman Shelby. Gentlemen, we thank you for your 
testimony, and your patience in letting us go vote but more 
than that, for your substantive input in helping us craft a 
good Senate bill. Thank you very much.
    The hearing is adjourned.
    [Whereupon, at 4:05 p.m., the hearing was adjourned.]
    [Prepared statements and response to written questions 
supplied for the record follow:]
           PREPARED STATEMENT OF SENATOR CHRISTOPHER J. DODD
    I want to commend Chairman Shelby and Senator Sarbanes for 
convening this hearing on the fiscal year 2005 budget for the Federal 
Transit Administration.
     I also want to thank Administrator Dorn for being here this 
afternoon. Although I will not be able to stay for the entire hearing, 
it is nevertheless very important for the Members of this Committee to 
hear about the Administration's transit priorities for the upcoming 
fiscal year.
     It has been nearly 2 months since the Banking Committee 
unanimously approved legislation reauthorizing the Nation's transit 
programs. Thanks to the outstanding leadership of Chairman Shelby and 
Senator Sarbanes, we were able to forge consensus on a $56.5 billion 
measure for mass transit over the next 6 years.
     This amount, I believe, represents a significant investment for 
the future. It is especially important for States and regions like my 
own that rely heavily on mass transit but whose aging infrastructure 
needs repair and modernization.
     It is therefore troubling that the Administration's budget 
proposal would flatline transit spending at last year's level, without 
even an increase for inflation or ridership growth. In addition, I am 
deeply concerned that the transit measure approved by the House 
Transportation and Infrastructure Committee yesterday is $5 billion 
less than the Senate level. I am well aware of the fiscal constraints 
that the Nation is facing, but it makes little sense to underinvest in 
an area where there are so many unmet needs.
     After all, transit ridership continues to grow each year. Why then 
is the Administration not recommending more resources to address this 
need?
     In addition, highway congestion continues to worsen, especially 
along the Northeast Corridor. Why then is the Federal Transit 
Administration proposing to take away one of our most effective 
congestion mitigation tools?
     Finally, investments in mass transit create jobs and serves as a 
catalyst for economic development. In fact, every one dollar invested 
in transit returns eight dollars to the economy. Why then is the 
Administration not proposing new transit funds to spur the economy?
     If anybody were to argue that there is no need for additional 
transit spending, I would urge them to look at Connecticut. This 
winter, we had severe problems on the Metro-North Railroad New Haven 
Line. A combination of cold weather and aging railcars knocked nearly a 
third of the fleet out of service for several weeks. And it was not 
just the passengers who were left out in the cold. The economy suffered 
as well. People could not travel to and from work. Students could not 
commute to and from school. Everything was at a standstill.
     Connecticut is not the only State experiencing such hardships 
though. Other States, particularly in the Northeast and Midwest that 
rely heavily on transit, require increased investments in mass transit 
to ensure that their systems run efficiently. For that reason, we ca 
not be satisfied with the Administration's budget proposal.
     With that, let me again thank Administrator Dorn and express my 
sincere desire to work with her to build on the successes transit has 
enjoyed over the years.

                               ----------
              PREPARED STATEMENT OF SENATOR JON S. CORZINE

    Mr. Chairman, thank you for calling this hearing to discuss the 
Administration's proposed budget for the Nation's mass transit needs in 
the next fiscal year. I welcome Federal Transit Administrator Dorn 
today and look forward to her testimony.
     Mr. Chairman, I have strong doubts that the budget that the 
Administration has proposed will be sufficient to meet the needs of our 
Nation's transportation infrastructure. The challenges posed by 
increased traffic congestion, poor air quality, and an aging road, rail 
and bridge network require a strong level of financial commitment from 
the Federal Government. Unfortunately, I cannot find that level of 
commitment in this proposal.
     With regards to the Administration's fiscal year 2005 transit 
proposal, I am equally disturbed by the levels, Mr. Chairman. The 
Administration has proposed a fiscal year 2005 mass transit budget that 
is $7.2 billion. That is the same as the Administration's Fiscal Year 
2004 Budget request and the same as the Fiscal Year 2004 Omnibus 
Spending bill that was signed into law by the President. This is 
clearly inadequate.
     I would also like to address transit security. In light of the 
tragic bombing in Madrid on March 11 that took 190 lives, I am 
concerned that we are not doing enough to prevent a similar attack in 
the United States. The Administration has only requested $37.8 million 
for Federal transit safety funding for fiscal year 2005. This is also 
inadequate.
     Finally, I would like to take a moment to address TEA-21 
reauthorization. For the past 6 months, Congress has struggled to enact 
a reauthorization bill that would help fund highway and mass transit 
needs. The Senate passed a bill in February that I consider a good 
start: We have set aside $311 billion. But the Administration has 
opposed this amount and has threatened a veto. As a result, the House 
of Representatives is considering a bill that only provides $275 
billion. I find it disturbing that instead of working with Congress to 
try to increase the funding for highways and mass transit, the 
Administration is instead trying to decrease funding.
     I understand that the Administration's fiscal year 2005 proposal 
is subject to change. Congress will establish different and hopefully 
higher highway and mass transit levels for fiscal year 2005 and the 
next 6 years. I look forward to this as a Member of the Banking 
Committee. Thank you.
                               ----------
                 PREPARED STATEMENT OF JENNIFER L. DORN
             Administrator, Federal Transit Administration
                   U.S. Department of Transportation
                             March 25, 2004

    Mr. Chairman and Members of the Committee, thank you for the 
opportunity to testify today in support of the President's Fiscal Year 
2005 Budget for the Federal Transit Administration (FTA). We are 
looking forward to working with this Committee and with Congress to 
achieve the goals outlined in our budget request. This budget request 
reiterates a number of important elements of the Administration's 
surface transportation reauthorization proposal, including predictable 
funding through the formularization of most transit programs; an 
increased focus on results through a ridership-based performance 
incentive program; and increased attention to the needs of people who 
are most dependent on public transportation as a lifeline to jobs and 
community resources.
    The President has proposed spending $7.27 billion on transit 
programs in fiscal year 2005, sustaining the record level of Federal 
investment in transit proposed by the President and enacted by Congress 
for fiscal year 2004. Reflecting the President's desire to make transit 
funding more reliable and more predictable, this budget proposes to 
redirect funding to reflect an increased priority on funding for rural 
communities and programs that serve people with disabilities, older 
adults, and low-income individuals who need better access to jobs and 
training opportunities in their communities. In addition, the President 
has proposed spending $1.5 billion, a 16 percent increase over the 
fiscal year 2004 enacted level, for the New Starts program. As American 
cities continue to grow, we believe that building and expanding transit 
systems through the New Starts program will be an important element of 
our Nation's efforts to grow our economy, promote energy independence, 
address congestion, improve emergency preparedness, and protect our 
environment.

Common Sense Transit Solutions
    The hallmark of this Administration has been the pursuit of common 
sense transit solutions for all Americans. Over the last decade or 
more, a growing awareness of the needs of older adults, persons with 
disabilities, and people with low incomes has led to the creation of 
new programs throughout Government--some are transportation programs, 
but many are human service programs that fund transportation services 
for their clients. As you know, in June 2003, the General Accounting 
Office identified 62 programs run by eight different Federal agencies 
that fund transportation services for individuals in these groups. 
Local governments, community groups, and nonprofit agencies have also 
stepped in to help address these important transportation needs. This 
growing and complex web of transportation services is, without 
question, a positive reflection of the increasing attention that 
community stakeholders, the Federal Government, and Congress have 
placed on meeting the needs of our Nation's most vulnerable citizens.
    Ironically, this impressive investment of money, time, and energy 
in public transportation has not solved the transportation problems of 
the people they are intended to help. Our communities have adopted a 
myriad of human service transportation networks, which to varying 
degrees involve transit agencies that provide fixed route or demand-
responsive public transportation and paratransit services, nonprofit 
agencies that operate transportation exclusively for use by their own 
clients, and human service agencies that provide funds to individual 
clients to purchase transportation services. Unfortunately, in most 
communities, making sense of these complicated networks is a difficult 
task that is still left to the customer. Typically, each agency that 
provides transportation has its own rules, billing practices, customer 
entry points, destinations, and routes. In some communities, two or 
more agencies run essentially the same route each day; but they may be 
permitted to serve only older adults or people with disabilities, not 
both, so they cannot pool their resources. Sometimes, one agency 
duplicates another group's service simply because it does not know what 
the other agency is doing. In still other cases, common sense transit 
solutions, such as the sharing and coordination of transit resources, 
are foiled by conflicting grant restrictions and requirements. In these 
situations, more can become less for the people who need public 
transportation and must navigate a dizzying array of agencies and 
requirements to access work, medical care, and community events.
    Improving the coordination of human service transportation is one 
of the top priorities for the President, Department of Transportation 
Secretary Mineta and for the Federal Transit Administration (FTA). On 
February 24, President Bush signed Executive Order 13330 bringing 10 
Federal agencies together on the Interagency Transportation 
Coordinating Council on Access and Mobility, and charging them with the 
tasks of eliminating duplication and overlapping Federal programs and 
improving the coordination of Federally supported transportation 
services at all levels.
    The Executive Order was announced at the first National Leadership 
Forum on Human Service Transportation Coordination, convened by 
Secretary Mineta and his counterparts in the U.S. Departments of Labor 
(DOL), Education (ED) and Health and Human Services (HHS)--Secretaries 
Chao, Paige, and Thompson--to provide technical assistance to States 
and recognize those States that have already taken significant steps to 
improve human service transportation. Before an audience that included 
Governor-appointed senior leadership teams from 47 States and U.S. 
Territories, Secretary Mineta honored five States--Florida, North 
Carolina, Maryland, Ohio, and Washington--that have made significant 
progress toward building a coordinated human service transportation 
system.
    Improving human service transportation coordination is also a key 
component of FTA's Strategic Business Plan, and I have assembled a team 
to work on it full-time with our partners in agencies across the 
Federal Government. Already, we have launched United We Ride, a five-
part initiative that encourages the coordination of transportation 
services for people to access health care, employment and employment-
related services, and other community resources. In addition to the 
National Leadership Forum and State Leadership Awards, the United We 
Ride initiative includes:

 A Framework for Action. Created by a panel of experts that 
    convened in August 2003, this self-assessment tool will help States 
    and communities identify areas of success and areas where they 
    still need to take action to improve the coordination of 
    transportation provided through human service programs, as well as 
    traditional public transportation.
 State Coordination Grants. Grants will be made available to 
    States to help address gaps in their human service transportation 
    coordination efforts. FTA has identified $1 million for these 
    grants in fiscal year 2004.
 Help Along the Way. A technical assistance program that will 
    build on the work of the Community Transportation Association of 
    America (CTAA), Project ACTION, and other stakeholder groups to 
    provide hands-on assistance to States and communities in 
    coordinating their human service transportation programs.

    The United We Ride initiative is but the latest in our efforts to 
make real progress toward improving the coordination of human service 
transportation programs. For some time now, the Department of 
Transportation has been working with its Federal partners at HHS, DOL, 
and ED to ease the Federal barriers to effective coordination. We have 
made progress. Under the leadership of the DOT/HHS Coordinating Council 
on Access and Mobility, for example, we opened the door for Medicaid 
funds to be used to purchase public transportation passes. Further, 
working with our colleagues at DOL, funding relationships have been 
forged between employment-related transportation programs operated by 
the two Departments.
    The DOT/HHS Coordinating Council has also been vigorous in 
sponsoring technical assistance for States and communities that seek to 
improve coordination of their human service transportation systems. HHS 
and DOT jointly fund the National Transit Resource Center that make 
available experts and peer-to-peer assistance on human service 
coordination, and disseminates best practices and other 
resource materials. Earlier this year, HHS and DOT published guidance 
on coordinated human service planning practices.
    As we did by hosting the National Leadership Forum, we have also 
recognized the important leadership role that State governments must 
play in promoting and coordinating transportation services. We have 
encouraged and supported the formation of the National Consortium on 
the Transportation of Human Services Coordination to facilitate 
collaboration among State and local organizations. CTAA has taken a 
leadership role in the consortium. The consortium now comprises 17 
national organizations with an interest in human services and 
transportation--including the American Association of Retired Persons, 
National Governors Association, Paralyzed Veterans of America, National 
Association of Area Agencies on Aging, and the National Conference of 
State Legislatures.
    The FTA fiscal year 2005 budget request and the Administration's 
SAFETEA proposal for reauthorization of surface transportation programs 
include some important elements that will further promote human service 
transportation coordination. I am pleased to note that the Committee's 
reauthorization bill (S. 1072), as passed by the Senate on February 12, 
incorporated many of these key program components, including provisions 
that require local prioritization plans for projects to service older 
adults, persons with disabilities and low-income individuals; increase 
planning resources and create a new planning capacity program; make 
mobility management an eligible expense; and permit other Federal 
social service transportation dollars to count toward the local match 
for FTA programs targeted to older adults, persons with disabilities, 
and low-income individuals.
    Like the States and communities that have already begun the tough 
work needed to accomplish better transportation coordination, as 
Federal officials, we know that this work will reap mobility benefits 
far into the future, helping to ensure that every American has the 
transportation necessary to access community life, services, and the 
economic opportunities of this great Nation.
    Finally, I want to thank Chairman Shelby for his leadership and 
support of our efforts to improve the coordination of human service 
transportation. In Alabama, he has promoted public transportation as a 
vital link to employment services for individuals with disabilities and 
low-incomes as part of the Job Access and Reverse Commute Program. 
Nationally, he has worked to keep this issue at the forefront of the 
Nation's agenda, and was an important champion of the United We Ride 
Leadership Awards program.

New Starts
    The President's Fiscal Year 2005 Budget provides $1.5 billion, a 
record level of funding, for the New Starts Program. This budget is a 
reflection of the Administration's strong commitment to continued 
Federal investment in major transit projects that are cost-effective, 
locally supported, delivered on time and within budget, and achieve 
their promised transportation benefits. It is a $216 million (16 
percent) increase over the fiscal year 2004 enacted level and reflects 
the specific project funding recommendations found in FTA's Annual New 
Starts Report for fiscal year 2005.
    In addition to funding the 26 existing and one pending full-funding 
grant agreements (FFGA), the budget funds seven additional projects--
five that are expected to be ready for a new FFGA before the end of 
fiscal year 2005 and two meritorious projects in Raleigh and Charlotte, 
North Carolina. These project sponsors are working on possible design 
changes intended to improve ridership that may have an impact on 
project costs. They are working closely with FTA to ensure that their 
final proposals deliver the most benefits for the taxpayer dollar.
    These seven additional projects recommended for funding were among 
29 that were evaluated and rated in the fiscal year 2005 Annual New 
Starts Report. Of the 29 that were rated: 17 received ``recommended'' 
ratings (including the seven funded in the President's Fiscal Year 2005 
Budget); 7 received ``not recommended'' ratings; and 5 were ``not 
rated'' because complete, accurate data needed to rate the project was 
not yet available from the project sponsor.
    In the fiscal year 2004 process, FTA implemented a time-savings 
measure to replace ``number of new riders'' in the calculation of cost-
effectiveness. For the fiscal year 2005 New Starts rating process, FTA 
made no changes in measures, break-points for ratings, or weightings 
among measures in the determination of ratings. However, we continue to 
focus on helping project sponsors develop good projects that are 
brought in on time and within budget, and that deliver the promised 
benefits. With an increased focus on ensuring a good return on 
investment, proactive project cost management by FTA and project 
sponsors resulted in a total savings of $673 million for seven proposed 
investments. One new tool we are using is a quantitative risk 
assessment that helps project sponsors identify the issues that could 
affect schedule or cost, as well as the probability that they will do 
so.
    Originally developed to help manage the Federal Government's risk 
with regard to the 100 percent Federally funded Lower Manhattan 
Recovery projects, this risk assessment tool has given both FTA and 
project sponsors a new quantitative means to manage risk more 
explicitly and reduce the likelihood of cost and schedule overruns. We 
are currently conducting risk assessments for those projects that are 
further along in project development, but will eventually use this 
important tool to assist sponsors with projects in alternatives 
analysis and preliminary engineering. We know that the earlier project 
sponsors identify and understand the ramifications of alignment, 
design, engineering, and other decisions, the better our projects will 
be, and the fewer undesirable ``surprises'' communities will face in 
later stages of development. We believe this tool will be particularly 
useful as FTA responds to Congress's request that we become more 
involved in project assessment during the alternatives analysis stage.

Enhancing Transit Security
    The President's Fiscal Year 2005 Budget also reflects a continued 
commitment to making our public transportation systems as safe and 
secure as possible. In fiscal year 2005, we request $37.8 million for 
security initiatives, which remain a high priority. This reflects the 1 
percent of Urbanized Formula Grant funding grantees are required by 
statute to use to increase the security and safety of an existing or 
planned mass transportation system, as well as FTA investments in 
security training for transit system employees, emergency preparedness 
and response activities, and public awareness efforts.
    As you know, public transportation is inherently an open, 
accessible system intended to help people move rapidly and efficiently 
everyday between home and work, shopping, medical care, and other 
community activities. While our Nation's approach to security is 
necessarily different in this environment than it is in the relatively 
closed environment of airline security, we have pursued increased 
security no less vigorously.
    In light of recent events in Madrid, I believe it is particularly 
timely to discuss our efforts with respect to rail security. America 
has some form of rail transit (for example, some combination of subway, 
light rail, and/or commuter rail systems) in 30 cities and 22 States. 
These systems provide 11.3 million passenger trips each weekday. The 
systems are locally operated and controlled, and it is important to 
note that FTA does not provide operating funds for these systems.
    As this Committee is aware, since September 11, 2001, FTA has 
undertaken an aggressive nationwide security program with the full 
cooperation and support of every transit agency. In each of these 
important rail cities, FTA has, in concert with the transit agencies, 
conducted risk and vulnerability assessments; deployed, at no cost to 
the transit agency, technical assistance teams to help strengthen 
security and emergency preparedness plans; and, as part of a $3 million 
program involving 83 transit agencies, funded emergency response drills 
conducted in conjunction with local fire, police, and emergency 
responders.
    Based on the full complement of threat and vulnerability 
assessments that have been conducted, as well as consultations with 
security experts around the world, FTA has pursued a consistent 
strategy of promoting emergency preparedness planning, employee 
training, and public awareness as the best way to prevent and/or 
mitigate the consequences of a terrorist attack. Among other important 
steps, FTA has:

 Issued a list of the Top 20 Action Items for transit agencies, 
    identifying the most important elements to incorporate into their 
    Security System Programs. These elements formed the basis of one of 
    four Core Accountabilities for FTA Senior Executives in fiscal year 
    2003, and I am pleased to report that the 30 largest transit 
    agencies accomplished at least 80 percent of these action items. 
    This year, our goal is to ensure that those agencies complete 90 
    percent of the action items and to help the next 20 largest transit 
    agencies complete at least 80 percent.
 Developed the ability to communicate instantaneously with the 
    general managers and heads of security of the 100 largest transit 
    agencies. This communication system is tested and used on a regular 
    basis to provide updates on incidents, as well as security 
    information bulletins and advisories.
 Funded and worked on a daily basis with the public transit 
    Information Sharing and Analysis Center (ISAC) operated under the 
    auspices of the American Public Transportation Association (APTA), 
    to provide two-way communication between the intelligence community 
    and the transit industry, as well as transit-specific intelligence 
    analysis.
 Developed and launched ``Transit Watch'' in the fall of 2003. 
    Transit Watch is a nationwide emergency response passenger 
    awareness program, developed and implemented in partnership with 
    the APTA, CTAA, the American Transit Union (ATU), and the 
    Transportation Security Administration of the Department of 
    Homeland Security (DHS).
 Developed and will deliver this spring, Security Design 
    Criteria for use by transit agencies as they design or redesign 
    infrastructure, communications, access control systems, and other 
    transit system components.
 Developed and delivered new security courses through the 
    National Transit Institute (NTI), including Counterterrorism 
    Strategies for Transit Police, Conducting Emergency Drills, 
    Passenger Monitoring and Awareness, as well as updated versions of 
    transit security courses and security needs assessments.
 Developed and will deliver this spring a web-based training 
    tool for use by communities to conduct table-top emergency 
    preparedness drills to test agency procedures, share best 
    practices, and identify needs.
 Tested and provided targeted manufacturers and key transit 
    agencies with information on the costs and benefits of chemical and 
    biological detection systems.
 Developed, in conjunction with Argonne National Laboratories, 
    and distributed to transit agencies standard protocols and 
    guidelines for responding to chemical and biological incidents in 
    rail, tunnel, and transit vehicle environments.
 Issued to transit agencies specific guidelines outlining steps 
    to take at each Homeland Security Advisory Level.
 Have substantially completed development and will soon 
    deliver, a passenger 
    behavioral monitoring course that incorporates the latest in 
    international counter-terrorism techniques. This course will 
    heighten the effectiveness of the transit industry's awareness 
    training portfolio.

    During the recent ``Orange Alert,'' the 30 largest transit agencies 
provided, at FTA's request, information about the specific actions they 
were taking as a result. These actions include:

 Utilizing bomb-sniffing dogs to patrol bus yards and train 
    repair facilities.
 Increasing police patrols and visibility of transit system 
    personnel.
 Increasing frequency of public awareness messages.
 Sending reminders to all transit employees, including bus and 
    rail operators, about what to look for and how to respond to 
    suspicious packages and individuals.
 Maintaining all police specialty vehicles in a state of 
    operational readiness.
 Conducting more frequent Operational Control Center critical 
    system backup checks.
 Assigning transit police to the local police department 
    command center.
 Participating in conference calls with the FBI and emergency 
    management personnel from the region.
 Notifying rapid response team members of potential for call-
    up.
 Issuing pager and text message alerts to operators and police.
 Checking all security systems, including lighting and intruder 
    alarms.

    Consistent with the current alert level, most transit agencies are 
now operating under ``Yellow Alert'' guidelines. However, based on 
intelligence information, several large systems continue to operate at 
the higher ``Orange Alert'' level.
    Finally, as you know, we continue to work directly with the DHS, 
particularly in the area of intelligence analysis. As you may know, 
this fiscal year, DHS is funding $675 million in security grants 
through States to urban areas based on a formula that takes into 
account factors including critical infrastructure, population density, 
and credible threat information. These funds may be used to enhance 
overall security and preparedness in order to prevent, respond to, and 
recover from acts of 
terrorism. In addition, DHS is providing a total of $50 million to 30 
rail transit agencies to help enhance the security of their passengers 
and assets. Allowable uses of these funds include the installation of 
physical barricades; monitoring systems such as video surveillance, 
motion detectors, thermal/IR imagery, and chemical/radiological 
material detection systems; integrated communications systems; and 
prevention planning, training, and exercises.
    Despite the complete devastation of three subway stations and over 
1,500 feet of track in Lower Manhattan on September 11, no passengers 
or subway personnel lost their lives in the attacks, thanks to the 
training and quick thinking of train operators, dispatchers, and 
transit managers. Today, I am proud to say that America's subways, 
light rail systems, and commuter trains are even better prepared to 
help prevent and respond to such emergencies.
Conclusion
    Mr. Chairman, the President's Fiscal Year 2005 Budget proposal for 
transit programs is fiscally responsible and programmatically 
responsive to the needs of transit consumers. I would be pleased to 
answer any questions the Committee may have.

                  PREPARED STATEMENT OF WILLIAM MILLAR
         President, American Public Transportation Association
                             March 25, 2004

Introduction
    Mr. Chairman and members of the Committee, on behalf of the 
American Public Transportation Association (APTA), thank you for this 
opportunity to testify on the Administration's proposed Fiscal Year 
2005 Budget for the Federal Transit Administration (FTA).

About APTA
    APTA's 1,500 public and private member organizations serve the 
public by providing safe, efficient, and economical public 
transportation service, and by working to ensure that those services 
and products support national economic, energy, environmental, and 
community goals.
    APTA member organizations include public transit systems and 
commuter railroads; design, construction, and finance firms; product 
and service providers; academic institutions; and State associations 
and departments of transportation. More than 90 percent of the people 
who use public transportation in the United States and Canada are 
served by APTA member systems.

Background
    Mr. Chairman, on behalf of APTA's 1,500 member organizations, I 
want to thank you, and the Members of this Committee, for your support 
of public transportation issues generally, and in particular your 
successful effort to pass a long-term authorization bill that addresses 
critical public transit investment needs, the Safe, Accountable, 
Flexible, and Equitable Transportation Efficiency Act (SAFETEA), S. 
1072. In that regard, I am pleased to advise you that the APTA Board of 
Directors at its March 7, 2004 meeting during APTA's Legislative 
Conference, unanimously approved a resolution in support of the bill 
and commending the Senate Banking Committee on its outstanding 
leadership in crafting the legislation. I would be pleased to submit a 
copy of APTA's resolution for the record.
    Mr. Chairman, SAFETEA builds and improves upon the success of ISTEA 
and TEA-21, both of which helped to increase transit ridership by 
providing significant investments in transit infrastructure. The 
Senate-passed SAFETEA bill grows investment in the Federal transit 
program while building on the successful structure of the existing 
program. It increases investment for existing programs and addresses 
unmet program needs with funding growth. Like APTA's reauthorization 
proposal, SAFETEA provides extra growth for the rural formula program, 
and it establishes a new tier under the small urban formula program for 
communities that provide higher than usual levels of transit service. 
It guarantees funding for all programs, regardless of whether they are 
funded with general funds or trust funds, and maintains a level playing 
field for modal investments by preserving the 80/20 Federal match for 
all Federal transit capital programs. Again, we thank you for crafting 
this critically important piece of legislation.

Fiscal Year 2005 Transit Investment
    APTA believes it is crucial to build on the success of TEA-21--and 
the Senate's action on SAFETEA--by continuing to provide significant 
investment in the Nation's transit and highway infrastructure in the 
fiscal year 2005 budget. That investment advances key national goals by 
producing jobs, providing more mobility options to all Americans, 
improving the environment and reducing dependence on foreign oil, and 
by providing a solid return on the investment. In short, we urge that 
Congress provide no less than the $8.65 billion level included in the 
Senate-passed SAFETEA bill in fiscal year 2005.

The Administration's 2005 Budget
    In contrast to this Committee's proposal for transit funding in 
fiscal year 2005, Mr. Chairman, the Administration's Fiscal Year 2005 
Budget proposes to freeze funding for the Federal transit program at 
the fiscal year 2004 level of $7.266 billion. Here's why we think that 
is a bad policy.

Fails to Meet Capital Needs
    The Administration's proposed funding level would not even fund the 
transit capital costs of maintaining current service, let alone support 
funding levels needed to improve the system. Communities across the 
country are rehabilitating and expanding public transportation systems 
and constructing new ones. According to the 
Federal Transit Administration (FTA), more than 550 local public 
transportation operators currently provide services in 319 large and 
small urban areas; 1,260 organizations provide public transportation in 
rural areas; and 3,660 organizations provide services to the aging 
population and disabled individuals throughout the Nation.
    Through improved mobility, safety, security, economic opportunity, 
and environmental quality, public transportation benefits every 
segments of American society--individuals, families, businesses, 
industries, and communities--and supports important national goals and 
policies.
    At the same time, the growing problem of traffic congestion 
continues to choke America's roadways and constrain community and 
business development. Polls consistently show that most Americans view 
congestion as a serious problem that 
continues to grow every year. Last year, APTA and the American 
Automobile Association (AAA) released the results of a poll that showed 
95 percent of Americans said traffic congestion, including commutes to 
and from work, has grown worse over the last 3 years. The poll also 
showed 92 percent of Americans said it was important for their 
community to have both good roads and viable alternatives to driving. A 
separate poll by Wirthlin Worldwide found that 30 percent of 
respondents had used public transportation in the last year, which 
means that some 86 million Americans use public transportation each 
year.
    Annual Federal appropriations for the Federal transit program have 
increased significantly in each of the years under TEA-21. Federal 
funding increased from just under $4.4 billion in fiscal year 1997 to 
$7.2 billion in fiscal year 2003. TEA-21 provided predictable growth in 
the Federal investment in public transportation, leading to impressive 
results. Service was expanded and improved, ridership reached its 
highest levels in 40 years, and public demand for additional capital 
investment in transit projects, new transit services, and improvements 
of existing systems is at record levels. This demand for additional 
service and capital projects comes at a time when many existing assets 
are nearing the end of their useful lives and need to be improved or 
replaced. The American Association of State Highway and Transportation 
Officials (AASHTO) concludes that an annual capital investment of more 
than $44 billion is needed to adequately maintain and improve existing 
transit system infrastructure. Mr. Chairman, now is not the time to 
stop growing the transit program.

Fails to Grow Program; Program Structural Changes
    In fact, Mr. Chairman, the Administration's Fiscal Year 2005 Budget 
proposal would reduce by $103 million the funding which the 
Administration had proposed for transit in fiscal year 2005 under its 
own reauthorization proposal that was released just last May. Inflation 
would further erode the purchasing power of a funding level that is 
already well short of addressing capital needs.
    The fiscal year 2005 budget proposal also continues to include 
program changes that have been consistently rejected by Congress. For 
instance, it calls for the elimination of the discretionary bus and bus 
facilities program, for which there is great demand.
    The Administration's proposal also would fold the fixed-guideway 
modernization program into the formula grants program and permit the 
use of fixed-guideway modernization funds for nonfixed-guideway 
purposes. The fixed-guideway modernization program was originally 
designed to ensure the proper modernization of the Nation's older rail 
transit systems, and it helps ensure that as Federal new start 
investment projects age they can be modernized. Rail systems in large 
metropolitan areas carry billions of passengers each year and their 
ridership has grown substantially in recent years. Many of these 
systems are approaching capacity constraints. The Administration 
proposal would allow these funds to go to urbanized areas and be used 
for any transit purpose, not just modernization. We are concerned that 
diverting these funds from fixed-guideway modernization, where needs 
far exceed available recources, would only exacerbate unmet 
modernization needs and 
potentially result in the deterioration of some of the Nation's most 
valuable capital assets. The fixed-guideway modernization has been a 
critical component of the Federal transit program structure since 1982, 
and it is a great success.

Balanced Transportation Investment
    The Administration's Fiscal Year 2005 Budget proposal also modifies 
its proposed 6-year transit/highway reauthorization bill. It would 
increase funding for its previously proposed 6-year reauthorization 
bill by $9 billion, but all of that increase would be directed at 
highway programs. In contrast, the proposal would actually reduce 
authorized transit funding under the six-year bill by $2.2 billion, 
from $45.8 billion to $43.6 billion. And of that amount, only the Mass 
Transit Account portion, $37.6 billion, would be guaranteed. If only 
guaranteed funding were made available, as has generally been the case 
under TEA-21, transit funding would only reach $6.6 billion by fiscal 
year 2009, which is some $630 million less than the actual fiscal year 
2003 funding for transit!
    Mr. Chairman, such a proposal would bring an end to the balanced 
transportation investment between highways and transit that has been 
fostered under both ISTEA and TEA-21, and has been so critical to the 
growth of a balanced intermodal transportation system. Investment in 
transit makes sense because it is in demand. Nationwide, many systems 
are bursting at the seams, with the highest ridership in 40 years and a 
huge backlog of capital improvements identified. In growing communities 
where transit has not been a priority in the past, citizens are 
demanding new services and capital projects. Public transportation 
supports a solid and growing economy by providing access to labor, 
decreasing time lost to congestion, and freeing highway and road space 
for the movement of goods and people. Public transportation represents 
an efficient use of scarce financial resources, because it helps to 
mitigate congestion in densely populated areas and provides a mobility 
option to millions of Americans. Public transportation represents an 
environmentally responsible transportation option because it uses less 
fuel and emits far less pollution per passenger than the automobile. A 
report by economists Robert Shapiro of the Brookings Institute and 
Kevin Hassett of the American Enterprise Institute demonstrates that 
transit emits less pollution per passenger than the automobile, and if 
Americans used public transportation for only 10 percent of their daily 
travel needs, the United States could significantly reduce its 
dependence on foreign oil. But people cannot use what they do not have. 
Now is not the time to shrink transit investment.

Proposal Undermines Job Creation and Economic Benefits
    Mr. Chairman, the Administration says it is focused on creating 
jobs and improving the economy, but its budget proposal fails to 
recognize the role public transportation can play in meeting these key 
goals. It is well known that increased investment in our Nation's 
transit and highway infrastructure will help the economy and produce 
jobs. The Department of Transportation has demonstrated that for every 
$1 billion in Federal highway and transit investment, 47,500 jobs are 
created or sustained.
    The jobs that investment in public transportation can create are 
high-paying, stable, and cannot be exported. The jobs created are not 
just those needed to operate new and expanded transit service, which 
are significant, but significant job creation also occurs in the 
private manufacturing sector, which supports and supplies the public 
transportation industry. For instance, transit buses are built in, 
among other places, Anniston, Alabama; Wichita, Kansas; Brownsville, 
Texas; Lamar, Colorado; St. Cloud, Minnesota; Hayward, California; 
Imlay City, Michigan; Pembina, North Dakota; and Oriskany, New York. 
Engines for those buses may be built in Detroit, Michigan or Columbus, 
Indiana. Spending on transit also benefits hundreds of other private 
sector companies around the United States that build rail cars, 
fareboxes, vehicle parts, and equipment or provide software, 
engineering, and construction services for the transit industry. 
According to a Cambridge Systematics, Inc. study, for every $10 dollars 
spent on transit capital projects, $30 dollars in business sales is 
generated. Every $10 dollars invested in transit operations results in 
$32 dollars in business sales.

Congestion Relief and Transportation Access
    Mr. Chairman, public transportation serves another important 
economic purpose: Alleviating highway congestion. According to the 
Texas Transportation Institute's ``2003 Urban Mobility Report,'' 
congestion costs $69.5 billion annually--more than 3.6 billion hours of 
delay and 5.7 billion gallons of excess fuel consumed. The report finds 
that without public transportation there would be 1 billion more hours 
(30 percent) more delay. The average driver loses more than a week and 
a half of work (62 hours) each year sitting in gridlock. The average 
cost of congestion per peak road traveler is $1,160 a year. Congestion 
holds up more than 64 percent of the Nation's freight that moves by 
truck on highways, which represents annual value to the economy of more 
than $5 trillion. As Paul Weyrich and Bill Lind of the Free Congress 
Foundation demonstrate in their study, ``How Transit Benefits People 
Who Do Not Ride It,'' public transportation, by alleviating congestion, 
brings real benefits not just to those who use it, but also to those 
who do not use it.
    But public transportation does not just improve the economy by 
taking cars off the road--it provides transportation options to low-
income workers who cannot afford to drive to work. According to the 
Surface Transportation Policy Project, the proportion of household 
expenditures devoted to transportation has grown from 14 percent in 
1960 to almost 20 percent today. A recently published U.S. DOT Bureau 
of Transportation Statistics Issue Brief found that Americans who 
commute by car or truck spent about $1,280 per year in 1999, while 
those who were able to use public transportation to get to and from 
work spent just $765 per year. Clearly public transportation provides 
real and needed savings for the many entry-level workers coming into 
the workforce who are so critical for the Nation's economy.

Demand for Public Transportation Service and Options
    Last November, voters in several cities, including Denver, Houston, 
Grand Rapids, and Kansas City, approved by large margins new local 
taxes to provide new and expanded public transportation services. These 
were just a few of efforts across the country to increase funding for 
transportation infrastructure, and they follow successful actions in 
other cities over the past 5 years to expand transit service, including 
votes in Phoenix, Charlotte, Dallas, and Minneapolis.
    That these referenda have been approved should come as no surprise. 
Polls have consistently shown that the American public not only 
supports increased public transportation services but also supports 
providing the resources to pay for it. A Wirthlin Worldwide poll taken 
for APTA showed that 80 percent of Americans surveyed see quality of 
life benefits from increased investment in public transportation; 76 
percent support public funding for the expansion and improvement of 
public transportation; two-thirds support propublic transportation 
Congressional candidates; and a majority of Americans believe 
transportation investment is preferable to tax cuts to stimulate the 
economy. These findings hold true across areas of all sizes--urban, 
suburban, small town, and rural.
    The Wirthlin Worldwide poll demonstrates that support for public 
transportation has increased dramatically not only in our biggest 
cities but also in smaller urban communities and rural areas as well, 
where 40 percent of America's rural residents have no access to public 
transportation, and another 28 percent have substandard access. It is 
estimated that rural America has 30 million nondrivers, including 
senior citizens, the disabled, and low-income families, all of whom 
need transportation options. According to a survey of APTA members, bus 
trips in areas with populations less than 100,000 increased from 323 
million to 426 million in a recent 5-year span.
    Further Mr. Chairman, the Administration budget fails to help 
transit meet the needs of the Nation's population of persons who choose 
not to, or cannot, drive because of age or a disability. For many in 
this population, public transportation may be the only option to living 
a fully independent and productive life. According to an AARP report 
for instance, 32 percent of people with disabilities over 65 report 
that inadequate transportation is a problem. The report states further 
that while public transportation is more economically efficient in 
areas with high population density, many older Americans with 
disabilities live ``outside of central cities in communities where 
public transportation is found least often.'' This is becoming a 
growing problem, and it is clear that we need to begin to address the 
important transportation needs in these areas. The Administration's 
budget fails to recognize this need.

Transit and Homeland Security
    Mr. Chairman, let me conclude with a brief summary of what we are 
doing regarding transit security. Transit systems around the country 
are working hard to make our service more secure for the millions and 
millions who use it every day. In testimony 2 days ago before the 
Senate Commerce, Science, and Transportation Committee, on the safety 
and security of passenger rail and public transportation systems, I 
highlighted $6 billion in critical security needs the transit industry 
has identified as necessary to keep America's public transportation 
systems safe.
    APTA's recent survey on public transportation security identified 
needs of at least $5.2 billion in additional capital funding to 
maintain, modernize, and expand transit system security functions to 
meet increased security demands. More than $800 million in increased 
operating costs for security personnel, training, technical support, 
and research and development have been identified, bringing transit 
security funding needs to a total of more than $6 billion.
    The Administration's Fiscal Year 2005 Budget for the Department of 
Homeland Security (DHS) does not request any specific line item funding 
for transit security. We think it should. To increase security, APTA is 
requesting that the President's Fiscal Year 2005 Budget request for the 
Department of Homeland Security be amended to include a specific line 
item for public transportation and that these funds be provided 
directly to transit systems so that additional security measures can be 
implemented in a timely manner. Mr. Chairman, we respectfully request 
your assistance and the assistance of this Committee in this regard.

Conclusion
    In conclusion Mr. Chairman, the Administration's budget proposal to 
freeze funding for fiscal year 2005 has many shortcomings. It does not 
grow the Federal transit program. It would fail to continue the success 
of TEA-21 by changing the overall structure of the Federal transit 
program that has served us so well. It fails to provide adequate 
resources to meet current capital needs, let alone improve or enhance 
service. In contrast, APTA recommends that Congress provide no less 
than the $8.65 billion authorized under the Senate's SAFETEA bill for 
fiscal year 2005 as developed by this Committee. We applaud the Senate 
for passing this balanced and important legislation and we look forward 
to working with this Committee as it works with the House of 
Representatives to develop a strong 6-year authorization bill that 
addresses the Nation's need to preserve and improve the Nation's 
surface transportation system.
    Mr. Chairman, that concludes my remarks. I would be pleased to try 
and answer any questions you or other Members of the Committee may 
have.
                               ----------
                 PREPARED STATEMENT OF DALE J. MARSICO
  Executive Director, Community Transportation Association of America
                             March 25, 2004

    Mr. Chairman and Members of the Committee, let me begin by 
expressing my appreciation to you, Mr. Chairman, for allowing me to be 
here today to discuss the fiscal year 2005 budget proposals for the 
Federal Transit Administration and how they relate to both our Nation's 
transportation needs and to the Senate's recently passed legislation, 
S. 1072.
    The Community Transportation Association and its over 7,000 members 
represent transportation providers of every type, size, and location. 
Some of our members serve small rural communities, some have deep roots 
in the nonprofit and faith-based service sectors, some are large more 
traditional transit agencies, and some clearly characterize themselves 
as independent businesses. All of them--just like all Americans--have 
an important stake in how we finance America's transportation future.
     In many ways our members reflect the changing nature of transit: 
One that recognizes that no one solution works for every community in a 
Nation as diverse as ours, and one where the traditional definitions of 
mass transit have been replaced by a new form of flexibility you 
recognized in both TEA-21 and in your recent legislation, S. 1072, as 
public transportation.
     This diversity gives us strength as we seek additional innovation 
and investment to continue to meet the mobility challenges of the 21st 
century.
     This hearing comes on the second anniversary of this Committee's 
first hearing to discuss the reauthorization of TEA-21, held in this 
very room in March 2002. To paraphrase the poet T. S. Eliot, we have 
returned to the place we started, and know many of the things we said 
then remain true and just as important today.
     We knew then and we know now that Federal investment in public 
transportation is an investment that returns real dividends to the 
American people. For every dollar provided in transit spending and 
investment, transit returns $8 to the American people. We also know 
that every dollar invested in transit creates jobs.
     But there are other kinds of returns on investment that do not 
lend themselves to numbers or statistics. They are the real stories of 
individual success and achievement that we cite later in this 
testimony.
     Our testimony supports what we knew then and know now that 
investments in public transit helped end welfare as we know it, that 
transit is a primary way that millions of our fellow Americans go to 
work every day and will be the primary way that Americans go back to 
work as part of any economic recovery.
     We know that over the last 10 years public transit agencies and 
their services regardless of their locations are powerful tools that 
guarantee the independence of many of our older citizens and that 
strong transportation programs in rural areas allow America's seniors 
to maintain their mobility independence. Together with programs and 
services in urban and suburban communities, transit is the safe choice 
for all of our older Americans.
     We know that investments in America's rural and small urban 
communities are as essential as transportation investments anywhere 
else. Because these investments have all the beneficial benefits in 
terms of employment and economic growth that transit provides in larger 
communities.
     And we know that in times of great distress, whether it be what we 
lived through on September 11, or the role transit played last year 
during the major power disruptions, or assisting communities in natural 
disasters, transit was there doing what it always does in such times of 
uncertainty, moving people out of harm's way and literally offering 
shelter in the storm.
     Despite our success, we are faced with the challenge of not just 
maintaining our current level of Federal investment, but we face the 
larger issue of finding greater resources that will allow transit and 
the communities it serves to move forward to address our critical unmet 
mobility needs in this new century. Therefore, we must respectfully 
disagree not just with proposals that reduce transit is current 
investment but those who would maintain transit is financial status 
quo. Make no mistake about it, freezing transit investment or holding 
transit to last year's funding level is a reduction in investment. 
Critical areas of transit is overall cost structures, like fuel and 
maintenance, safety and security, as well as capital improvements, are 
rising faster than the current rate of inflation.
     Is the mediocrity of maintaining current conditions acceptable, 
given the need to motivate people to ride community and public 
transportation? Or, do we encourage a visionary approach that secures 
the introduction of substantial private-sector capital to be brought 
into the capital equipment investment formula an innovative way to 
solve the budget shortfall situation? Passage of substantive TEA-21 
reauthorization law is the single most important element essential to 
persuading the private-sector to commit investment dollars within the 
context of innovative financing that is indeed necessary to meet the 
need for capital replacement so necessary in community and public 
transportation. The increased use of innovative financing is the only 
way to bring the Nation's bus fleet up to safety, accessibility, and 
quality standards.
     Faced with the growing needs of our older citizens, as well as 
closing the continuing unmet needs of rural communities, making further 
inroads in the fight against congestion, or doing our share to improve 
air quality, these are all at risk without higher levels of investment.
     Although our investments and success are greater than what they 
were, there is much more that needs to be done. There is still much 
unmet transit need, and demand for public and community transportation 
services outstrips supply. What follows are the real success stories of 
community and public transportation, the real successes.

Extending the Economic Benefit of Transit to Rural and Small-Urban
Communities
     In our estimation, the success of community and public 
transportation ought not to be measured in vehicle miles, unduplicated 
trips or even overall ridership totals, important though they are. No, 
the success of community and public transportation must be measured by 
its impact on the American people and on the local economy. The impact 
of public and community transportation is all about moving people to 
jobs, to school, to the doctor, to the mall, to social services, and 
anywhere else.
     Our colleagues at the American Public Transportation Association 
have compiled many years' worth of statistical data that show the 
positive effects of public transportation in our Nation's cities and 
their surrounding suburbs. We commend them on this work, and stand with 
them in their findings. But, you may well wonder what value does public 
transportation have for that other half of our Nation's population, the 
residents of smaller cities and rural areas? To better assess the 
positive effect of transit in rural areas and smaller cities, we turn 
to the Transportation Research Board. The report, Assessment of the 
Economic Impacts of Rural Public Transportation, highlights that 
because of the guarantees that you and your colleagues helped assure 
for our Nation, many more small cities and rural areas were able to use 
to the connections made possible by transit to strengthen their 
communities.

Blacksburg, VA
     Federal transit funding to this small, university-oriented city, 
the home of Virginia Polytechnic University, has yielded demonstrable 
benefits in reduced congestion and reduced demand for parking lots and 
garages both on campus and in the city of Blacksburg. Indeed, city and 
college officials have reported that it would cost the community twice 
as much simply to construct more automobile-oriented roads, lots, 
garages, and facilities than what is spent in combined Federal and 
local transit investments.

Hagerstown, MD
    According to Washington County, MD, officials, 80 percent of the 
users of the county's transportation services do not own a car; these 
same people are riding the public transit system's vehicles to get to 
and from jobs on a reliable basis. The net impact on the county's 
economy, were these hundreds of predominately lower-income commuters 
forced to either purchase and operate automobiles, or leave their jobs 
and risk return to dependence on public assistance, has been estimated 
at a loss of $2.4 million a year, which is a far greater cost than the 
county's annual transit budget of $1.1 million.

Lee County, NC
     This rural county's transit program began strictly as a means of 
providing basic mobility for the area's senior citizens and medically 
underserved populations. The system has grown mightily over the years, 
and now provides a full range of transportation services to link 
residents with work, job training, health care, and social services. 
Interestingly, one of the greatest economic benefits that this transit 
program brings is the spending power of the county's senior citizens. 
Thanks to the modest, but steady, Federal transportation investment in 
Lee County, every dollar spent by the transit program has yielded two 
dollars spent by senior citizens in local stores, restaurants, 
pharmacies, and other businesses. Prior to the creation of the transit 
program, these dollars were not being spent in the community.

Clarksdale, MS
     The economy in this portion of the rural Mississippi Delta region 
has changed tremendously over the past decade, and the area's economic 
growth would have been severely limited without the local public 
transportation network. This region's transit program began as an 
offshoot of the local community health center, which needed to assure 
access to basic health care for the large numbers of low-income and no-
income families in the area. More recently, this region has seen the 
sudden employment demands of newly constructed casinos, and the transit 
program has proven vital to getting these casinos the round-the-clock 
workforce they need. Public transportation cannot meet such demands for 
employers unless its resources are stable and its services reliable.

Pee Dee, SC
    Health care is another realm in which public and community 
transportation, when it has a stable foundation, helps assure health 
and vitality for individuals and local economies. For a moment, imagine 
the alternatives: Individuals who must either drive themselves, even 
when ill or debilitated, to medical care, or who must use ambulances as 
an expensive alternative for reaching hospitals and physicians, or in 
the case of many seniors must otherwise contend with the choice of 
leaving their homes, and even leaving their home towns, to go spend 
weeks, months, years, or the remainder of their lives in nursing homes 
and institutional care. Public and community transportation frequently 
serves as that lifeline that connects people with critical services, 
such as renal dialysis. Its access to other health services also is a 
central consideration in helping seniors, persons with disabilities, 
and others remain in their homes as they continue leading lives in 
their own communities. The regional transit program in this largely 
rural portion of South Carolina is representative of so many such 
transit systems in its role as a transporter to doctors, dialysis, and 
health care facilities. Without the transit service, the annual costs 
of health care just in this one region of one State would increase $5 
million, a burden that largely would fall on other Federal and State 
programs such as Medicare and Medicaid, that can ill afford such costs.
     Thanks to the stable, assured transit funding of TEA-21, we have 
seen similar economic and social benefits throughout the Nation over 
the past 5 years. Seniors and others in rural areas of South Dakota now 
are able to take public transportation to health services, stores, and 
other places they never before could access. Rural regions such as the 
Upper Cumberland area in Tennessee, the counties surrounding 
Charlottesville, VA, and countless other areas across the country now 
have 24-hour transit service, linking late night workers with their 
jobs. Such a notion would be unthinkable without the resources of TEA-
21, and we are certain this reliability of transportation helped many 
communities, and many individuals, weather the most recent downturns in 
the economy.
     Not only do we find economic progress in the traditional areas of 
transit funding, but we also find it in programs like the Job Access 
and Reverse Commute Program.
     We find in the Job Access and Reverse Commute Program the same 
commitment to public transportation that one might expect in a 
Federally funded public transportation program, and also a unique 
commitment to individuals, helping them reach the first rung on the 
ladder of the American Dream. Community and public transportation were 
instrumental in helping to end welfare as we knew it. As part of this 
testimony, we have selected several communities, such as Chattanooga, 
TN, and Santa Clara County, CA, to spotlight specific success stories 
in helping Americans get to work.

Chattanooga, TN
    The Chattanooga Area Regional Transportation Authority (CARTA) used 
multi-year Job Access and Reverse Commute Program funds to expand 
transit services that connect low-income people with jobs in both rural 
and urban parts of Hamilton County, Tennessee. Hamilton County includes 
the city of Chattanooga and surrounding suburban communities rich with 
entry-level employment opportunities.
     Through the Job Access Program, and funds from the Departments of 
Transportation, Human Services, and Labor, CARTA sought to fill gaps 
identified in a regional study on transportation needs, a study that 
incorporated many neighborhood meetings designed to get input from 
riders and potential riders in low-income areas. Job Access funds 
enabled the system to expand service on five fixed-route bus routes to 
improve the availability of transportation to residential 
neighborhoods. CARTA extended these neighborhood routes to operate up 
to 19 hours a day in order to accommodate those working earlier and 
later shifts and on Saturdays.
     The regional provider also was able to improve transit service to 
employment corridors in suburban areas. As with the neighborhood routes 
this service operates 19 hours a day and provides frequent service: 
Every 10 minutes morning and afternoon peak, every 20 minutes mid-day, 
and every 30 minutes during evening hours. CARTA also used Job Access 
funds to purchase vehicles for a new vanpool service to be operated by 
Special Transit Services, a private nonprofit specialized provider. 
These funds were also used to acquire a new vehicle for Hamilton County 
Rural Transportation so it could add a flexible employment 
transportation route from a suburban residential area to jobs in a 
neighboring city.
     CARTA also initiated a travel training program at a rehabilitation 
hospital so that people with disabilities could learn to ride on fixed-
route buses, and implemented an integrated fare and transfer fare 
systems with the Hamilton County Rural Transportation Service, for 
service between the rural demand-response routes that link with CARTA 
fixed routes.
     CARTA's Job Access expansions helped Aimee Nelligan, a mother of 
seven who had been on welfare for years, to gain employment in a 
commercial district that was previously inaccessible from her low-
income public housing community. Prior to the change in routing, this 
15-minute trip took over an hour, was not possible past 5 p.m. on 
weekdays or on Sundays. The trip is now available from 4:55 a.m. to 
11:45 p.m. Mondays through Saturdays and from 11:30 a.m. to 7:45 p.m. 
on Sundays. Another CARTA rider, George Bryan, a father who works in a 
restaurant in a regional mall, is able to take a Dial-A-Ride 
Neighborhood Route with his children, see them dropped off in front of 
their elementary school, and then transfer to a Main Line route and 
continue on to his place of employment. CARTA's Neighborhood Routes 
were instituted after consultation with the system's riders, job 
training, human service, and employment agencies during the Job Access 
planning process. At least three other sets of parents and children 
have ridden to work and school together during the 3 years this route 
has been in existence.
     As a result of Job Access-funded expansions, CARTA created 64 
added stops within a half-mile of employment sites with the two new 
routes, and 271 new stops within a half-mile of employment sites during 
times not previously served that is, late night and evening. The 
regional transit agency was also able to reach more than 2,000 
employers and 20,000 entry-level jobs, add 1,400 new stops within a 
half-mile of residences of welfare recipients, and reach 65 child care 
facilities with capacity for 2,200 children within a half-mile of new 
stops.
     Overall, ridership on expanded routes has increased 15 percent 
since the Job Access projects began in 1999. CARTA services now reach 
67 percent of Hamilton County's welfare recipients and their families 
who are within a half-mile of CARTA services. The system has provided 
more than 12,000 fixed route trips on five new and expanded routes and 
more than 7,000 child care demand-response trips.

Southeast Missouri
     The Workforce Investment Board of Southeast Missouri is using 
funds from the Job Access and Reverse Commute Program along with a 
match of U.S. Department of Labor Welfare-to-Work dollars to provide 
transportation services in Southeastern Missouri. This service area 
covers seven of the most impoverished counties in the State, and most 
are very rural.
     The Missouri Bootheel Transportation Program, as the project is 
called, creates an opportunity for residents to go to work at sites 
they normally would not be able to access. Some of these job sites are 
located out of State in northwestern Tennessee and northeastern 
Arkansas, where the job market is richer.
     Workforce Investment Board staff works with area transportation 
providers to set up routes to select employment sites. Workforce staff 
targets employment opportunities for clients that meet strict criteria: 
Jobs are in the $8.00 per hour range, workers receive benefits, and 
working conditions are safe. Staff assists their clients in obtaining 
positions and guarantee them a way to reach these targeted job sites. 
The Workforce Investment Board contracts to provide transportation 
services with county and regional rural transit providers and one 
private operator. The transit providers carry individuals from central 
locations convenient to their homes, such as public housing community 
buildings and churches, to employment sites.
     The Workforce Investment Board and the Missouri Department of 
Social Services supports half of the operating budget with Federal 
Welfare-to-Work funds and TANF funds, respectively. The JARC grant 
covers the balance of the operating budget. In addition, the contracted 
transportation provider uses vehicles made available under the rural 
transportation program.
     On the first day of work at Proctor and Gamble, one rider 
describes his experience: ``The bus picked me up down the road from my 
home. This was very convenient for me. Knowing that the bus would be 
there every morning to pick me up gave me the will to get up and get 
dressed to go to work. They expected me to be there. I would feel 
guilty if they came to pick me up and I did not go. I enjoyed the 
encouragement I got from others on the bus on the way to work and after 
a hard day's work. They knew exactly what I was going though because 
they were going though the same thing. My family gained respect for me 
and supported me too. It is nice knowing there are people behind you. I 
would love to see other projects like this one so that others can be 
helped the way I have been. There are lots of people in rural areas who 
have not worked before, and just receive assistance from the State 
because the job opportunities are not good where they live. Not only 
has the transportation helped us financially, but it has also helped my 
self-esteem 100 percent. My dream is to one day be their bus driver; 
maybe give back a little of what was restored in me, HOPE!'' Bootheel 
staff undertook an intensive outreach program to find the riders for 
the transportation services. This outreach program has been compared to 
a grassroots voter registration drive in that job developers and other 
partners set up outreach booths in public housing communities, church 
basements, and anywhere else where the targeted populations spend their 
time. This outreach allowed individuals without transportation to come 
in and apply for jobs and register for transportation services.
     Staff also market the program, its services and successes within 
the community-at-large, communicating that this program is taking 
people to locations they could not otherwise have gone and that it is 
creating a new opportunity for job development and economic 
development. With Job Access funds, Missouri Bootheel has been able to 
provide rides to over 700 individuals in the past year. It has allowed 
individuals who have never worked to go to work and go off of public 
assistance. Currently, about 160 people a day are riding the vans, 
taking workers to approximately 10 employee sites.
     Bootheel's project manager has attested to the Job Access 
program's success: ``Many long-term welfare recipients have become 
company people with benefits, vacation, and an income to support their 
family. People who had very little hope for the future now have an 
opportunity to work because of transportation.'' The Bootheel 
transportation program also benefits other members of the community. 
For instance, area rural transit providers have increased the number of 
riders on their services due to the contracts with the Southeast 
Missouri Workforce Investment Board. Additionally, the transportation 
program has given employers an opportunity to tap into a new job market 
that was not previously available to them. Since the transportation 
service brings new employees from other counties and other States, 
employers have found a new and valuable labor resource. For example, 
the Tyson poultry plant currently employs approximately 80 of Bootheel 
Transportation's participant riders and continually gives the Workforce 
Investment Board orders for new positions. Finally, with more families 
earning steady incomes, the Bootheel transportation program has also 
benefited the local economy. Another success of the Bootheel project 
has been tackling a challenge that comes with the territory of 
workforce development: Job retention. Bootheel staff and employers 
created techniques to help employees who were riding the vans stay in 
their jobs. Among the techniques include: Free bus pass vouchers, 
stipends, raffles, and leadership trainings.

Santa Clara County, CA
    Santa Clara County, California, home to Silicon Valley high-tech, 
manufacturing, construction, trade and service industries, offers a 
range of employment, training and educational opportunities to welfare 
recipients and other low-income people. However, these opportunities 
are just out of grasp for those who cannot access them. While there are 
a myriad of transportation options available in the Silicon Valley a 
countywide bus and light-rail system, intercity and commuter trains, a 
host of shuttle services, and connections to out-of-county 
transportation their routes and schedules do not always match the 
mobility needs of low-income workers. A Santa Clara public/private 
partnership responded to this transportation gap when it formed the 
Guaranteed Ride Program (GRP). GRP offers CalWORKs (California's 
Temporary Assistance for Needy Families program) participants and other 
low-income individuals a short-term transportation service should they 
need a back-up ride. GRP is a temporary, transitional service that 
provides participants with up to 60 rides to work-related destinations, 
including childcare and school. Job Access and Reverse Commute funds 
support this service, along with CalWORKs funds from the county 
Department of Social Services. GRP provides its door-to-door service 24 
hours a day, 7 days a week.
     Many of the nearly 2,500 enrolled Guaranteed Ride Program 
participants have used the service to leave work to pick up a sick 
child, get home after working beyond the operating hours of area 
transportation services, access a job interview or training site, or 
reach a job when one's car is disabled. Since its inception, GRP has 
provided more than 60,000 trips to CalWORKs participants and other low-
income riders.
     OUTREACH, a private nonprofit that provides outreach and support 
to Santa Clara County senior citizens and people with disabilities, 
operates the Guaranteed Ride Program. As the community-based 
transportation broker for the Santa Clara Valley Transportation 
Authority, OUTREACH takes advantage of its expertise in the 
transportation field, particularly serving people with disabilities, 
and the technology it routinely uses to schedule trips, track vehicle 
locations, and map travel patterns and needs. Peggy was already a 
passenger on OUTREACH's ADA service when she enrolled in the Job 
Access-sponsored Guaranteed Ride Program. She used the program for free 
rides to employment training and job interviews, saving the monthly 
transportation assistance from the county for ADA service. Peggy now 
has a part-time job and continues to look for additional employment. 
She feels that the program served her needs very well, and in her 
words, this helped, ``make an incredible difference for people who have 
no other options.'' Another rider enrolled in the Guaranteed Ride 
Program while attending a local community college. Like all GRP 
clients, she is able to take her children to school and childcare on 
her way to college. Taking advantage of this program simplified 
transportation for her family while she completes her education.
     As part of the Guaranteed Ride Program, OUTREACH staff provides 
individualized transportation planning service, promoting job access, 
retention and self-sufficiency through one-on-one management of client 
mobility needs. County social 
service and workforce development staff participate in ongoing training 
to understand the various transportation options available, including 
GRP, and how to help clients learn about and obtain long-term 
transportation solutions. Multilingual transportation resource guides 
are available to CalWORKs participants and agencies, and transportation 
resource centers have been established in four of Santa Clara County's 
one-stop centers. ``Simply stated,'' adds OUTREACH Chief Executive 
Officer Kathryn Heatley, ``The Guaranteed Ride Program expands 
effective existing resources to reduce transportation barriers and 
increase accessibility for CalWORKs participants.''

Allegan County, MI
    Lack of public transit prevented many residents of Allegan County, 
Michigan, a large rural area bordering Lake Michigan, from securing 
jobs, and subsequently, prolonged their reliance on welfare and other 
government services. The transit service created in 2000, however, 
provided new connections. With investment from the Job Access and 
Reverse Commute grant program, Allegan County is now meeting employment 
transportation needs with benefits that have reached many of the 
county's low-income, including employees with disabilities.
    The new service funded with Job Access dollars, matching funds from 
the Michigan Department of Transportation and Family Independence 
Agency, and operating dollars from a fee-for-service contract with the 
Allegan County Community Mental Health and Work First offers 
transportation to jobs and other destinations Monday through Friday 
from 5 a.m. until midnight. Allegan County Transportation rolled out 
its Job Access operating with two vehicles donated by the Community 
Mental Health and Allegan County Resource Development Committee. 
Currently, the system runs six vehicles, four of which are lift-
equipped. While the service is demand responsive, Allegan County 
Transportation offers subscription service for regular commuters, and 
will deviate out of its service area on request. In addition, drivers 
will pick up passengers who flag down the bus at stores and other 
locations.
    Shannon is one beneficiary of the new Job Access-funded Allegan 
County Transportation service. Shannon gave up her driver's license 
when her epilepsy started to impair her driving abilities. As a respite 
from walking to and from work, she began taking Allegan Transportation. 
She learned about the service from her mother and her Family 
Independence Agency caseworker. Prior to the service, Shannon would 
walk to and from her job in all weather conditions and in the early 
morning darkness. After being followed by an unknown man one day at 4 
a.m., Shannon began taking rides to work from her co-workers. Today, 
Shannon's new husband drives her to work and the Allegan bus takes her 
home after a stop at day care to pick up her child. Shannon says her 
job provides her with steady employment and keeps her busy.
     Over the past year, Allegan County Transportation has carried an 
average of 1,200 passengers a month. Sixty-five percent of these riders 
are people with disabilities, most using the service to reach jobs both 
in and out of the county. These employment destinations are largely in 
the service industry at hotels, restaurants, stores, gas stations, and 
other locations.

Rhode Island
    The Rhode Island Public Transit Authority (RIPTA) has started an 
employment transportation service for people with disabilities using 
Job Access and Reverse Commute funds from the Federal Transit 
Administration. RIPTA has implemented five flexible service 
demonstration programs in Rhode Island's low-density suburban and rural 
communities that provide disabled individuals with a reliable zoned-
based system. Called Flex Service, this program takes riders to work 
and other destinations in their community. Passengers can also travel 
outside their communities using Flex Service, then transferring to 
RIPTA's specialized service.
    The need for Flex Service became apparent when a statewide survey 
revealed the unmet work-related transportation needs of Rhode Island 
residents with disabilities. The results showed that 20 percent of the 
respondents lived in the five suburban and rural areas of Woonsocket, 
Coventry, West Warwick, Narragansett, or Westerly; 81 percent of those 
people found reliable transportation an obstacle to accepting a job. 
For these people, transportation services are key to employment and 
self-sufficiency.
    Maria, who is visually impaired, has been using RIPTA's Job Access-
funded Flex Service to get to work for about a year. Flex Service picks 
her up in front of her house and brings her to work at two different 
nursing homes. Her hours and work location vary each day of the week, 
but a standing reservation with RIPTA meets the mobility needs of a 
variable work schedule. Without the service, her husband would have to 
drive her to work. Because their work hours do not match, Maria would 
not have the flexibility her position currently requires. When asked 
about Flex Service, Maria reported, ``The new system is great! It costs 
less and the door-to-door service is wonderful. Thanks to all who made 
it possible.''
    As a wheelchair user, Martin qualifies for ADA complementary 
transit service. His job as a customer service representative, however, 
is located a mile outside of the \3/4\-mile service corridor. The 
situation forced Martin to take a taxi from the edge of the corridor to 
work. Not only expensive, but also taxis in the area were not 
wheelchair accessible, and the trip was so short that he was having 
difficulty getting the taxi companies to provide the trip each day on a 
timely basis. He began using Flex Service the day the service started, 
and, in combination with a ADA bus, has been using it to get to work 
each day for 14 months.
    RIPTA is providing 160 trips per month to people with disabilities, 
who use Flex Service to get to work and other destinations such as 
shopping at the local mall. Passengers take transportation from any one 
of the five Flex Service locations and transfer to RIPTA's paratransit 
service to go to the Amtrak station in Providence.

Voices from the Community
     As mentioned earlier in this testimony, there are unique 
connections to individuals that we do not usually find in Federally 
supported transportation programs. We were able to gather information 
from some of these individuals to better articulate the different kinds 
of economic impact that these services make.
``People Who are Ill Need Transportation''
     Dorothy Bougie is 73 years old, and lives in rural Alfred, Maine. 
Her home, in which she has lived for the past 50 years, is somewhat 
isolated in the southern-most part of the State, about 40 miles 
southwest of Portland.
     Three times a week, Dorothy heads to Sanford for dialysis. She has 
been a dialysis patient for 3 years now. Up until recently, Dorothy 
still drove anywhere she needed to go, including to her dialysis 
treatments. But then she had an accident, totaling the car. She bought 
a new car, and then had another accident, totaling another car.
     ``I got a lecture from my son when I had the second accident,'' 
says Dorothy. ``He made me feel like a highway menace. But I did think 
that, perhaps, it was a sign that I should not be driving. Problem was, 
there was no other way to go.''
     Dorothy does not qualify for Medicaid, as her income puts her just 
over the limit. With her husband's pension from General Electric and 
Social Security, her modest income makes her ineligible for Medicaid, 
which she's come to learn is a distinct disadvantage.
     ``The people who make the rules in Washington--and in Maine--they 
should focus on the need and not the income guidelines,'' says Dorothy. 
``People who are ill need some transportation if they need it.''
     Thankfully for Dorothy, just when she could not figure how to get 
around anymore, she found a solution. She had begun to really hate 
having to ask neighbors and friends for rides, most of whom are as old 
as she and experiencing their own medical challenges. What is more, her 
two sons live too far away in New Hampshire and Connecticut, and there 
was no church service to provide the service.
     Enter the York County Community Action Agency in nearby Sanford, 
riding to the rescue offering a regular trip to dialysis.
     ``The service is great and I was getting desperate. You know, the 
only good thing about dialysis is that if you ever decide that you just 
cannot deal with getting there anymore, you have only got 5 days before 
you lapse into a coma,'' says Dorothy.
     But more than anything else, Dorothy has grown to learn just as 
critical mobility is to both her independence and quality of life.
     ``Living in my home is important to me,'' says Dorothy. ``It is 
peaceful and quiet and the idea of moving into one of those. . . 
facilities where everyone just sits around and complains, well, it is 
not for me.''

``How to Get Around?''
     The car wreck was enough. James Mearnf, 69, of Clarksburg, WV (in 
the central part of the State) recalls. ``I could not feel the brake 
pedal, and I did not want to kill anyone.''
     So he stopped driving 2 years ago. But that raised another 
quandary: How to get around? And for James, it was a matter of life and 
death because he is diabetic and has been receiving dialysis treatments 
at the local dialysis clinic about 15 minutes from his house.
     His wife does not drive, and they both rely on Central West 
Virginia Transit Authority (CWVTA) for much of their transportation 
needs.
     ``You cannot beat it,'' says the former Sports Editor of the 
Clarksburg Exponent who also spent 30 years as a social studies 
teacher. ``I would seen the vehicles around town for years but never 
really knew what they were doing. Now I rely upon them.''
     Besides allowing James to access life-sustaining dialysis 
treatment, the transit authority allows him and his wife to get just 
about anywhere they need to in the county.
     ``People who have readily available transportation take it for 
granted. But you like to get out a little bit,'' says James. He also 
adds that community transportation services have helped him and his 
wife remain in the house they have lived in for the past 36 years, 
which to him is crucial.
     James acknowledges that they are fortunate to have such services 
available at a reasonable cost. ``It is a really great help to our 
overall quality of my life. Without it, I could not take part in 
anything at all.''

``You Have No Choice''
     ``After four hours hooked up to that machine, you are pretty 
weak,'' says Norman Naimey, 72, of Cape Elizabeth, Maine, about his 
thrice-weekly dialysis treatments in nearby Portland. ``I used to 
drive, but it just got to be too much.''
     Norman knows that it is hard for most people to understand what it 
means to be dependent upon dialysis to stay alive. The four-hour 
treatments leave him weak-legged and terribly chilled. But he knows 
that literally he has no choice.
     Today, Norman relies on Portland's Regional Transportation Program 
to get to his dialysis. It is an agency for which he has much 
admiration.
     ``I really depend on the Regional Transportation Program; it helps 
my wife and me remain independent and it is helping to keep me alive,'' 
he says.
     ``When you go on dialysis, you pretty much go on for life. And you 
go three times a week, period. You cannot put it off. You cannot 
postpone it. You have no choice,'' says Norman.
     What the local transit program does three times a week, according 
to Norman, is save his life and help maintain his independence.
     ``I do not have to worry about transit at all now. They get me 
there and back,'' says Norman. ``I would like to see the system get 
some newer vehicles. The small bus I rode yesterday had 175,000 miles 
on it.''

``I Don't Know What We would Do''
     Eloise and Donald Beuhring live in Huntington, WV, not far from 
the Kentucky and Ohio borders. Married since 1945, the couple had 
retired to Florida, but returned to West Virginia to be closer to 
family and the help they could provide.
     Eloise, 79, has been on dialysis since December 1997. ``I used to 
drive her myself, but I cannot do that anymore,'' says Donald, an 82-
year-old former postal worker and WWII veteran. Physically, Donald can 
no longer manage to transport Eloise, who requires the use of a 
wheelchair. They now rely on the Wayne County Transportation Authority 
to access the treatments that keep her alive.
     Unlike Medicaid, which the Beuhrings are not eligible for, 
Medicare does not cover the cost of transportation to and from dialysis 
treatment. If it were not for the services provided by Wayne County, 
Donald says he and Eloise would have few options.
     ``I do not know what we would do. We would have to get help from 
somebody.'' Their daughter works full time, but still makes time to 
help out with sorting their bills, do Eloise's hair and ``get her all 
prettied up,'' according to Donald. But she would not be able to take 
the time off from work to drive Eloise to dialysis three times per week 
even if she had the physical ability, and Donald says the couple would 
not feel good about having to rely on neighbors.
     Donald is grateful for the service provided for his wife by Wayne 
County Transit Authority. ``They do it very well; there is nothing they 
could really do to improve. They do it very well.''

``I would Rather Be Home''
     ``I would rather be home, here with my wife and family,'' says 
Benjamin Leighton of Windham, Maine. ``Going into one of those senior 
homes just is not for me.''
     But it seemed that remaining independent and in his own home was 
increasingly not realistic for Benjamin. Already reliant on portable 
oxygen, last August he was placed on dialysis treatments three times a 
week. At first, his wife drove him, but she soon underwent surgery on 
her arm that made driving unbearable. Thankfully, a nurse and a social 
worker had both spoken to Benjamin about transportation through 
Portland's Regional Transportation Program.
     ``Thankfully, I knew about the transportation, so they were able 
to set me up with a volunteer driver in his own car, who takes me and 
another gentleman from Yarmouth down to Portland for treatments,'' says 
Benjamin. ``He is an 80-year old former World War II fighter pilot in 
amazingly good health.'' All told, the trip is 45 minutes, one-way.
     ``Some people I know are able to drive after dialysis, but I 
really do not know how they do it,'' says Benjamin. ``I am right dead 
after it.''
     For Benjamin, the only problem he has had with his transportation 
is that the ride down to Portland often aggravates his bad back, and 
then he has to sit in the chair for dialysis for four-to-five hours. 
But he is hesitant to complain too loudly.
     ``Hey, I cannot complain because I had no other way to get there 
and their trip is much better than nothing,'' he says.

``It is Saving My Life''
     When told that some areas of the country do not have the kind of 
community transportation she relies on to get to her dialysis 
treatments, Sylvia Thompson's reply was simple: ``Tell them to get it. 
It is saving my life.''
     Sylvia, like many dialysis patients, suffers from diabetes and has 
not been able to drive for over 2 years. She cannot get into or out of 
the car and receives door through door transportation from the Wayne 
County (WV) Transit Authority.
     Three times per week she makes the nearly 80 mile roundtrip to the 
dialysis clinic for the three-to-four-hour treatments that remove 
toxins from her blood and keep her alive. The treatments, however, take 
a toll.
     ``By the time it is done, I am ready for bed,'' says Sylvia. She 
has been doing this for the past year.
     Sylvia is 72 and has lived in her current home with her husband 
Clifford for the past 22 years. She recently became eligible for 
Medicaid and it covers the cost of her dialysis transportation, which 
Medicare did not.
     ``The van service is wonderful,'' says Sylvia. ``The drivers are 
excellent. They come no matter what the weather. . . I could not be 
treated any better.''
     Sylvia also notes that ``a lot of people rely on Wayne Co. Transit 
for cancer treatment and things like that.'' She says, ``I do not know 
what would have happened if they were not there.''

``Transit is Something Great''
     Randall Pierce lives 10 minutes from the dialysis center that he 
must visit three times per week, but since he can no longer drive, the 
distance might as well be 1,000 miles.
     He lives with his wife in Clarksburg, WV. A former heavy equipment 
operator, Randall is paraplegic and has been on dialysis for a year and 
a half. He had to stop driving his own lift-equipped van last year 
because of medical complications exacerbated by driving, and his wife 
tried driving him to his treatments--but that interfered with her job. 
The Central West Virginia Transit Authority (CWVTA) now helps Randall 
access dialysis.
     The transit authority also allows Randall to go other places when 
his wife is not available to drive him. ``It is county-wide 
transportation,'' he says. ``They have many lift-equipped vehicles.''
     To Randall, and others with similar needs, community 
transportation is ``Something great. Especially in the more rural 
counties.''

An Avoidable Tragedy
     Our final story is too real. A veteran of the Korean War, a 
decorated sailor who reached the rank of Ship's Serviceman, Third 
Class, recently died in Shelburne Falls, MA. He was 68 years old, and 
he was ill--his kidneys were failing and he needed dialysis treatments 
three times a week.
     ``He'd still be alive today if he had adequate transportation,'' 
says Leo Parent, director of Veterans Services with the Central 
Franklin County (MA) District in Turners Falls.
     This gentleman--whose name we will not use out of respect for his 
privacy--lived too far outside the service area of any public or 
community transit systems and did not qualify for Medicaid.
     The veteran used to drive himself the 10 miles, one-way, to his 
dialysis appointments on Tuesdays, Thursdays, and Saturdays. This much 
we know, because it was the local police department that first notified 
the local Veterans Administration that some alternate form of 
transportation was necessary. According to the police, he was simply to 
weak to safely drive home from his four-hour dialysis sessions. A home 
health care worker agreed, noting that the veteran was at-risk for 
automobile accidents and falls. They were forced to take away his 
driver's license.
     ``Now, I cannot go anywhere, I am stuck in this house,'' says 
Parent, recalling the gentleman's reaction to having his driving 
privileges revoked.
     The VA contracted with a driver to take him into Greenfield, MA, 
and for a little while all seemed well. But officials with the VA did 
not realize that she, too, was ill and uncomfortable driving in the 
snow and ice that is inevitable in Western Massachusetts in the winter. 
Sometimes, when she could not take him, Parent himself would actually 
go and get the veteran and take him to dialysis.
     ``He did not want to call and be an inconvenience,'' recalls 
Parent.
     Tragically, the volunteer driver died of her illness, and the 
veteran was stranded once again, this time with dire results. Parent 
estimates he missed 2-to-3 weeks of treatments before the VA could 
contract with a local taxi company to reinstate the life-saving 
transportation services.
     He died, not long after, from complications that most assuredly 
arose from his missing dialysis. He died for a lack of transportation.
     ``If our vets do not drive, then it is a serious transportation 
problem, particularly in the rural areas of Western Massachusetts,'' 
says George Ponte of the Veterans Administration office in Northampton, 
MA. ``We need to find the resources to make sure this does not happen 
again.''
     Dialysis patients are not the only ones in dire need of 
transportation. The recent health care trend of increasing outpatient 
services, coupled with the overall aging of the American population, 
make for a serious disconnect. How to get people to continuing and 
life-saving care they need? Public and community transportation are the 
only answer.
     There is a price for progress and there is a bottom line for 
transit investment. Your number, the numbers in S. 1072, represent our 
bottom line for assuring transit is robust ability to respond to our 
Nation's needs.
     According to the research firm Cambridge Systematics, ``Every $1 
billion invested in public transit capital projects generates 30,000 
jobs, and the same amount invested in public transit operations 
generates 60,000 jobs. The return on investment could be as high as 9 
to 1.'' (source: APTA, ``The Economic Importance of Public Transit,'' 
November 2003). Another APTA paper, ``The Benefits of Public 
Transportation: Essential Support for a Strong Economy,'' cites similar 
work by Cambridge Systematics, with local economic benefits ranging up 
to $6 billion in benefits for every $1 billion invested.
     In the fiscal year 2005 budget request, President Bush, Secretary 
Mineta, and Administrator Dorn are requesting that Federal Transit 
Administration programs be funded at $7.3 billion for a third 
consecutive year. During this same period, inflation is averaging 2.0 
percent a year, and the passenger Transportation Services Index, as 
reported by the Bureau of Transportation Statistics, has been slipping 
at an annualized rate of 3.5 percent per year. Keeping the transit 
program on frozen ground, as the Administration proposes to do, will 
only lead to further degradation of our Nation's public transportation 
infrastructure and will erode the transit ridership gains that we, APTA 
and FTA all were so proud to share with the Banking Committee in our 
past years' testimonies.
     We know it is common to attack S. 1072 and legislation that seeks 
to close the gap between our needs both to maintain and expand transit 
investment by calling these efforts as pork barrel spending, budget 
busters, extravagant, or unnecessary.
     These attacks ignore the information gathering of the last 2 years 
that started when this Committee took its first reauthorization 
testimony, and it ignores the information contained in the 
Administration's own Conditions and Performance Report, all of which 
tell us that we must invest, or else we settle for the degradation of 
the existing infrastructure that continues to serve the American 
people.
     At current dollars, the Administration's Conditions and 
Performance Report estimates it would take a total of $89 billion over 
6 years simply to maintain the current public transportation 
infrastructure, or $124 billion to improve the Nation's transit 
infrastructure in ways that address its present demands. If the Federal 
Government's share of these investments were to continue at 80 percent 
of project expenses, the Administration's numbers suggest that a 6-year 
authorization bill's totals for FTA programs should be between $71.0 
and $98.9 billion.
     That is why S. 1072 and its proposed investment are so important. 
We need the level of investment in the Senate bill to increase public 
transit access for America's rural communities. We need the level of 
investment in the Senate bill to expand transit is capacity to help our 
senior citizens and help them cope with the continuing use of 
outpatient medicine for their health care. We need the level of 
investment in the Senate bill to help Americans return to full 
employment. We need the level of investment in the Senate bill to 
reduce congestion and making going to work faster and more efficient 
for all Americans. We need the level of investment in the Senate bill 
as an incentive to encourage State and local governments to do their 
share in making their commitment to transit is future. We need the 
guarantees for investment that are found in your bill to give us the 
same kind of success we have seen from the guarantees Congress provided 
in TEA-21 which are highlighted above in this testimony. And we need 
the investments in S. 1072 to maintain the capacity of transit that we 
continue to require in light of the uncertain implications caused by 
natural and unnatural disasters. TEA-21 is recognized today as a great 
success in transit and in highways. Your bill builds on this success.
     We know that inevitably there will be a bill passed in the House 
of Representatives that will require conferencing with the work of the 
Senate. We hope that your representatives will continue to uphold the 
important elements of S. 1072 as those efforts are joined.
     Finally, Mr. Chairman, in light of the recent events that have 
occurred since S. 1072 was passed, we hope that in that conference both 
the Senate and the House might consider improving transit is capacity 
to further respond to a natural disaster or a major terrorist attack.
     Part of this improvement should include the establishment of 
National Reserve Fleet of transit vehicles and rail cars, stockpiled 
for use in local communities should the need arise.
     This fleet, kept in a fully operational standby status would be 
able to respond to emergencies as needed. We also believe that some 
indigenous fueling capacity for this fleet should be developed, as well 
as a stockpile of common transit fuels provided for not just its use, 
but for transit is general use in an emergency. In light of the New 
York experience, we also think that a standby reserve of ferry boats 
for use in emergencies should also be given full consideration. And, we 
believe that this fleet should be created in addition to and not at the 
expenses of the program you envisioned in S. 1072.
     I want to close by thanking you for your leadership, your 
recognition of transit is role and potential for our country but most 
of all for making S. 1072 the right first piece of transportation 
legislation to be passed by either House of Congress in the 21st 
century.

                  PREPARED STATEMENT OF TIMOTHY MARTIN
      Chairman, Standing Committee on Public Transportation of the
 American Association of the State Highway and Transportation Officals
            Secretary, Illinois Department of Transportation
                             March 25, 2004

    Mr. Chairman my name is Timothy Martin, and I am the Secretary of 
Transportation for the State of Illinois. I am also Chairman of the 
Public Transportation Committee of the American Association of State 
Highway and Transportation Officials. First, on behalf of AASHTO and 
its members, let me sincerely thank you and the Members of the 
Committee for your leadership in developing and obtaining Senate 
passage of S. 1072, which will reauthorize highway, transit and related 
funding for the next 6 years. AASHTO is on record with its partner 
organizations as saying that the TEA-21 reauthorization legislation 
should be funded at a minimum at the levels approved by the Senate.
    Transit is a critical component of a balanced intermodal 
transportation system. It helps to provide:

 Access to jobs and economic activities;
 Mobility for the young, elderly, and disabled;
 Reductions in traffic congestion and enhanced efficiency of 
    highway transportation;
 Fuel conservation and improved air quality, and support for 
    security; and emergency preparedness activities.

    At AASHTO, we look forward to working with you in seeking approval 
of multiyear authorization legislation for the surface transportation 
programs. While supporting increased transit funding, we also believe 
that the transit program provisions of TEA-21 are working well and 
should be continued. The investment in transit over the past 6 years 
using TEA-21 has paid off with a 22 percent increase in ridership, and 
the highest level of passenger trips in 40 years. Continued ridership 
growth at these levels would increase passenger trips approximately 3.5 
percent annually, or a 100 percent increase over the next two decades.
    Mr. Chairman, AASHTO has significant concerns with the funding 
levels in the Administration's Fiscal Year 2005 Budget proposal for 
transit. The Administration's Budget proposal would basically freeze 
transit funding at the fiscal year 2004 level of $7.3 billion, of which 
nearly $6 billion would come from the Trust Fund and $1.3 billion would 
come from the General Fund. The Administration's proposed funding level 
for transit falls substantially short of the needs documented in DOT's 
most recent Conditions and Performance Report which indicates that an 
annual investment of over $20 billion is needed for transit.
    This need for increased transit funding has been documented in 
AASHTO's Bottom Line report as well, which identifies the need for an 
annual transit capital investment level of $19 billion over the next 6 
years just to maintain the physical condition and service performance 
of the Nation's transit systems. An additional capital investment of 
$44 billion per year is needed over the same time period to improve the 
physical condition and service performance of the Nation's transit 
systems, assuring that ridership continues to grow.
    In my home State of Illinois, the Administration's flat funding 
level for transit would seriously compromise the progress Illinois has 
made to expand much-needed transit service in both rural and urban 
parts of the State. Through TEA-21's increased operating funding, 
Illinois was able to provide rural transit service to 13 additional 
counties. However, 37 counties of the State's 102 still do not have 
transit service. TEA-21's capital funding in combination with 
Illinois's own infrastructure funding program, Illinois FIRST, was able 
to initiate five major New Start projects that will help address 
growing congestion in the Chicagoland area. However, the region has 
growing unmet transit markets such as reverse commuting and suburb-to-
suburb demand, both of which could be addressed with projects that are 
ready to go right now with an increased Federal transit program. In 
addition, these construction projects alone will create over 57,000 new 
jobs to spur the local and national economy.
    Mr. Chairman, AASHTO is also concerned that the Administration's 
SAFETEA proposal, while ``guaranteeing'' funds from the Mass Transit 
Account of the Highway Trust Fund, contains no similar guarantee for 
the General Fund component of transit funding. States and transit 
agencies need stable, predictable funding in order to construct major 
transit projects. The TEA-21 legislation provides and Senate bill S. 
1072 continues guaranteed funding for transit from both the Trust Fund 
and the General Fund. It is critical that both Highway Trust Fund and 
General Funds for transit are guaranteed in the TEA-21 reauthorization.
    The Administration's SAFETEA proposal calls for a reduction of the 
Federal funding share for New Starts projects from 80 percent to 50 
percent. In order for State and local officials to make balanced 
decisions between highway and transit projects, AASHTO believes the 
Federal share of 80 percent should be retained for both highway and 
transit projects.
    AASHTO commends the Administration for its concern with maintaining 
the solvency of the Mass Transit Account, but does not support its 
proposed program restructuring. SAFETEA proposes that New Starts be 
funded at an 80 percent level with General Funds, rather than through 
the Highway Trust Fund. Since SAFETEA does not guarantee General Funds 
for transit, New Starts would be vulnerable to funding reductions or 
elimination during the annual appropriations process. Also, under 
SAFETEA, bus discretionary funding would be eliminated and the Rail 
Modernization program would be shifted to the formula program. Other 
alternatives exist to remedy budget scoring problems that have prompted 
these proposals and we would be glad to work with the Committee and 
your staff to find solutions.
    AASHTO supports giving the States flexibility to fund some security 
activities using Highway Trust Funds. However, given the magnitude of 
transportation needs, some transportation related national security 
activities and capital needs such as emergency response coordination 
and communications equipment should be funded through Homeland Security 
programs.
    AASHTO's Bottom Line report documents the need to double Federal 
rural transit assistance from current levels. For many rural regions, 
transit access can mean the difference between isolation and inclusion. 
Rural transit provides residents of these areas service to jobs, to 
medical facilities, and to community activities. As the Nation's 
elderly population increases in the coming years, more transit service 
will be needed for citizens in rural areas, particularly when they are 
no longer able to operate an automobile.
    In summary, the Administration's proposed flat line funding for 
transit in fiscal year 2005 at $7.3 billion simply would not provide 
the level of investment needed to address job access, elderly 
transportation needs, improved transit to reduce traffic congestion and 
pollutants in the air. The higher level of fiscal year 2005 funding in 
the Senate bill, $8.65 billion, will provide more resources to deal 
with these issues as well as provide investment in our economy and job 
growth. The American Public Transportation Association estimates that 
every $1 billion invested in public transportation creates 47,500 jobs. 
At that rate, the Senate proposal would create 60,000 more jobs than 
the Administration in fiscal year 2005 alone.
    We look forward to working with you toward passage of legislation 
that funds the highway and transit programs at the levels provided in 
S. 1072.
    Thank you, Mr. Chairman, for the opportunity to testify. I would be 
glad to respond to your questions.

                               ----------
              PREPARED STATEMENT OF ROLF TH. LUNDBERG, JR.
        Senior Vice President, Congressional and Public Affairs
                      U.S. Department of Commerce
                             March 25, 2004

    Mr. Chairman, Ranking Member Sarbanes, Members of the Committee, 
thank you for allowing me to appear before you today to discuss the 
importance of transit in our Nation's rural and urban areas. I am Rolf 
Lundberg, Senior Vice President for Congressional and Public Affairs at 
the U.S. Chamber of Commerce. I appear before the Committee on behalf 
of the U.S. Chamber of Commerce, the world's largest business 
federation representing more than three million companies and 
organizations of every size, sector, and region. My testimony will 
address the Administration's proposed Fiscal Year 2005 Budget for 
public transportation and the importance of a national, seamless 
transportation network that meets the mobility needs of moving people 
in urban and rural areas.

The Administration's Fiscal Year 2005 Budget for Public Transportation
    The U.S. Chamber is disappointed that the Bush Administration's 
proposed Fiscal Year 2005 Budget freezes transit investment at last 
year's level. For the Nation, the importance of investment in our 
Nation's public transportation system is critical to our future 
economic growth, international competitiveness, quality of life, and 
national security. Public transportation funding is a proven investment 
that creates jobs and generates economic growth. For every billion 
dollars invested in transportation infrastructure, 47,500 jobs are 
created and businesses experience a $3 billion gain in sales. We 
applaud the Committee for your hard work to significantly increase 
investment in public transportation in the transit title of S. 1072, 
the highway and transit reauthorization bill. With critical TEA-21 set 
to expire April 30 and infrastructure requirements continuing to mount, 
now is not the time to flat line investment in our public 
transportation system!

Importance of Public Transportation Infrastructure
    Public transportation is taking on an increasingly important role 
in America's multimodal transportation network. Americans used public 
transportation a record 9.5 billion times in 2001, and transit 
ridership has grown 23 percent since 1995. This represents the highest 
level in more than 40 years. Over the last 6 years, transit use has 
gown faster than population growth. Fourteen million Americans use 
public transportation every day and 25 million people use transit on a 
regular basis. Supplementing commuter rail, the passenger and intercity 
bus industry serves more than 4,000 communities directly with scheduled 
service.
    These ridership gains are directly attributable to the significant 
Federal investments in public transportation. Right now 3 out of 4 
Americans do not have access to satisfactory public transportation 
services. In 2001, each American traveling during peak periods wasted 
on average 60 hours a year--nearly eight full working days--in traffic 
congestion. Also in that same year, congestion cost America nearly $70 
billion in wasted time and fuel. Without public transportation 
services, congestion would have increased by 30 percent. American 
communities nationwide are reaping enormous economic benefits from 
affordable, modern public transportation through increased property 
value and more tax revenue.
    Across America, investment in public transportation is paying off. 
Transportation accounts for approximately 17 percent of our gross 
domestic product, and for American families transportation represents 
18 percent of household spending, the second largest household 
expenditure after housing. Without the option of providing strong 
investment in public transportation to State and local governments, we 
will feel the consequences of a sub par system--congestion, decreased 
productivity, more accidents, and diminished quality of life. The cost 
of road congestion to the U.S. economy was nearly $78 billion in 1999--
more than triple what it was 20 years ago!

Funding Requirements Not Meeting Demand for Public Transportation
    U.S. Department of Transportation (DOT) data show that a minimum 
$60 billion per year Federal investment is needed to improve and 
maintain the current physical conditions of the Nation's highways and 
bridges. DOT estimates that $20.6 billion in capital investment is 
needed annually just to maintain and improve current public transit 
services. Inflated to 2003 dollars, and using ridership estimates 
consistent with current experience, brings that number into the $30 
billion range. Indeed, the American Association of State Highway and 
Transportation Officials (AASHTO) ``Bottom Line'' report indicates an 
annual transit need of $43.9 billion to improve the transportation 
system. We currently spend $7 billion a year. To meet these current 
challenges, we must invest more of our limited resources in a better, 
more efficient manner.

S. 1072 Highway and Transit Reauthorization Bill
    We applaud the work of the Senate Environment & Public Works, 
Banking, Finance, and Commerce Committees for developing a package that 
significantly increases Federal highway and transit authorizations, 
with appropriate budgetary protections. We firmly believe S. 1072's 
authorizations of $255 billion for highways and $56.5 billion for 
public transportation, and guaranteed funding levels are the minimum 
that should be accepted for any 6-year TEA-21 reauthorization bill. 
Many of our State Chambers of Commerce have expressed their belief that 
there is no legislation that will be taken up this year that will 
provide critical benefits to all industries, all communities, the 
American economy more than the reauthorization of the Federal highway 
and transit programs. The Senate investment levels represent the mid-
point between the Federal share of the Nation's documented 
transportation needs and the current inadequate highway and transit 
funding levels. The Senate-passed bill does not raise the Federal gas 
tax or user fee, nor does it increase the Federal deficit. It continues 
the important principle of paying for highways, bridges, and transit 
through the Highway Trust Fund. Accordingly, the U.S. Chamber would not 
support any legislation below the Senate investment number for a 6-year 
bill. As the House prepares to debate a $275 billion bill, we urge this 
Committee and the Senate to insist on a $318 billion funding level in 
the conference report.

Americans for Transportation Mobility
    Three years ago the U.S. Chamber helped launch a new coalition 
called Americans for Transportation Mobility, or ATM. ATM is a broad-
based organization of transportation users and providers, State and 
local organizations, and State and local government officials. The 
coalition has more than 400 organizations whose objective is simple: To 
build public and political support for a safer and more efficient 
transportation system. We are working to achieve our objective through 
a two-pronged approach: (1) Ensuring that Congress fully dedicates 
Federal transportation trust fund revenues for their intended purpose, 
and (2) accelerate the project review process by removing redundancies. 
All the money in the world will not help if we are not efficient in the 
planning and approval for much-needed improvement projects.
    Through ATM, for the first time, the business and labor communities 
have joined together in educating lawmakers on the importance of 
improved mobility and safety to future economic growth. Without meeting 
the mobility needs for the movement of people and goods, our Nation 
will not achieve the economic success and quality of life it demands. 
The ATM coalition looks forward to working with this Committee in 
ensuring adequate investments are made over the next several years in 
our transportation network.

Conclusion
    In closing, the U.S. Chamber will continue to advocate for 
increased investment in transportation infrastructure. We will play an 
active and aggressive part in advancing a transportation agenda that 
strengthens our national transportation system and allows American 
business to compete in the global marketplace. We will remind the 
Administration and Congress that infrastructure is not disposable--
rather, it is a strategic asset that must be renewed and protected.
    The impact of freezing public transit funding at the current levels 
will increase congestion, decrease safety on our roads, and setback our 
ability to improve air quality. The U.S. Chamber, chambers of commerce 
throughout the Nation, and the business community look forward to 
working with Congress and the President to support funding the Nation's 
surface transportation needs, and, at a minimum, support the authorized 
and guaranteed investment levels in S. 1072 of $56.5 billion for 
transit and $255 billion for highways. This investment in our national 
transportation system will ensure we provide a quality of life all 
Americans deserve.

         RESPONSE TO WRITTEN QUESTIONS OF SENATOR DODD 
                     FROM JENNIFER L. DORN

New Freedom Initiative
Q.1. One of the centerpieces of the Administration's budget 
proposal is its New Freedom Initiative, which would increase 
the availability of transportation services to persons with 
disabilities for the purpose of helping them get to jobs.
    How will the New Freedoms Initiative be implemented? What 
will be the mandates or requirements of the new program? Are 
there any real incentives or bonuses that will encourage 
collaborative planning and implementation efforts?

A.1. The New Freedom Initiative (NFl) will be implemented in 
accordance with the provisions included in the Administration's 
Safe, Accountable, Flexible, and Efficient Transportation 
Equity Act (SAFETEA) reauthorization proposal:

 Funds will be apportioned to States by a formula 
    administered by the Secretary. Moreover, FTA proposes to 
    base the formula on the number of individuals with 
    disabilities by State with a minimum allocation to ensure 
    that each State can implement a meaningful project.
 Funds are to be used for new transportation services 
    beyond those required by ADA.
 Fifteen percent of a State's apportionment may be used 
    for planning, technical assistance, and administration.
 Any NFI funds may be transferred to Urbanized Area and 
    Nonurbanized Area programs for eligible NFl projects to be 
    implemented by recipients or subrecipients under those 
    programs.
 Grants are subject to requirements of Urbanized Area 
    program to the extent the Secretary considers appropriate.
 Labor protection requirements shall apply using a 
    Special Warranty. Since this warranty would contain 
    standard terms and conditions agreed on by Department of 
    Labor (DOL) and Department of Transportation (DOT), these 
    would be substituted for a labor certification.
 The Secretary may waive the Special Warranty for 
    private nonprofit subrecipients on a case-by-case basis.
 The State must distribute the funds on a fair and 
    equitable basis.
 Recipients must select subrecipients on a competitive 
    basis. Recipients must coordinate NFI funded activities 
    with related activities under other Federal programs.
 Projects selected must be derived from a locally 
    developed, coordinated public transit-human services 
    transportation plan.
 Plans must be developed through a process that 
    includes representatives of public, private, and nonprofit 
    transportation and human services providers and 
    participation by the public.
 Grants for capital costs shall not exceed 80 percent 
    of the net capital cost of the project.
 Grants for operating costs may not exceed 50 percent 
    of the net operating cost of the project.
 Local match for grants shall come from undistributed 
    cash surplus, a replacement or depreciation cash fund or 
    reserve, a service agreement with a State or local social 
    service agency or a private social service organization, or 
    new capital.
 Local match may be derived from amounts appropriated 
    to or made available to a department or agency of the 
    Federal Government that are eligible to be expended for 
    transportation.

    A major incentive that will encourage collaborative 
planning and implementation efforts is that to be eligible to 
receive funding under the program projects must be selected 
from a locally developed, coordinated public transit-human 
services transportation plan, developed with representatives of 
public, private, and nonprofit tramportation and human services 
providers and participation by the public. In addition, up to 
15 percent of the amounts 
apportioned under the program may be used to administer, plan, 
and provide technical assistance for projects funded under the 
program. Also, other Federal funds eligible to be expended for 
transportation may be used as the local match to NFl funds.
Job Access and Reverse Commute
Q.2. How will the formula for the Job Access and Reverse 
Commute program be calculated under the Administration's 
proposal?

A.2. The Secretary has the discretion to administer the program 
according to a formula that considers the number of low-income 
people in each State. FTA proposes to allocate the funds 
according to a formula based on the number of individuals 
within 150 percent of the poverty level, with a ``floor'' level 
provided to each State and territory to ensure that a minimal 
level is available to each State, including those with a low 
population of lowincome individuals, sufficient to fund a 
meaningful program.

Q.3. Connecticut has a big concern that a straight formula by 
low-income population will severely reduce the level of 
services it can deliver with this program. As you may know, 
Connecticut's Job Access and Reverse Commute program was one of 
the first in the Nation to deliver access to job services. It 
has since become one of the models for other collaborative job 
access efforts throughout the Nation. It provides about $8 
million annually in services designed and tailored in 
cooperation with job developers, employers, human service 
agencies, and transportation providers to meet the needs of 
low-income individuals. Preserving the level of funding for 
this program is vital to Connecticut's efforts to continue to 
provide services as well as maintain the partnerships that 
enable the program to secure matching funds.
    I was wondering if you might consider building other 
factors into the formula calculation? For example, FTA can 
build in a factor that compares incomes with the general cost-
of-living in the State? Funds would therefore be allocated on 
the basis of need in an equitable fashion across the country. 
After all, earning the Federal poverty level in Connecticut 
does not give a person the same quality of life as earning the 
poverty level in a low-cost State. I would be interested in any 
thoughts that you might have on this matter.

A.3. FTA would consider using other factors in calculating 
formula allocation of JARC funding if data on which to base 
such calculations is readily available. As you may know, the 
House has proposed allocating 60 percent of the funds directly 
to large urbanized areas (less than 200,000 population), 20 
percent to the States for urbanized areas between 50,000 and 
200,000 in population, and 20 percent to the States for 
nonurbanized areas. The House has also proposed a formula that 
includes density factors as well as low-income population and 
population of welfare recipients.
Job Access and Healthcare Service Coordination
Q.4. Administrator Dorn, I want to bring to your attention an 
issue that has become increasingly urgent in recent years. As 
you may be aware, more and more healthcare services are offered 
to the American public on an outpatient basis--services like 
dialysis and chemotherapy. In addition, the population is 
growing older and more people than ever are now reliant upon 
ongoing, continuing care to maintain both their independence 
and quality of life.
    These two trends are placing some unprecedented pressure on 
public and community transportation. It is interesting to note 
that Medicare only reimburses older Americans for 
transportation by ambulances, regardless of whether or not 
there is an emergency. In addition, many older Americans must 
fend for themselves on high-priced private sector providers 
when local public transit options are not available.
    What type of information does FTA have about the needs of 
Medicare clients?

A.4. The Medicare restriction on funding transportation 
services related to medical reasons has resulted in many 
nonemergency ambulance trips and unnecessary ambulance trips 
(even though the statute forbids such trips). The funds 
currently used for unnecessary Medicare ambulance trips might 
be better invested in community transportation services, which 
would allow increased access to Medicare services and reduce 
the burden on local ambulance providers, allowing them to 
better respond to true medical emergencies.
    Although the purpose of the Job Access and Reverse Commute 
(JARC) program is to provide access to jobs, assets acquired 
with JARC funding may be used for broader community needs, 
including access to health facilities by low-income and elderly 
Medicare clients, once the program related purposes of the 
program are met.
    Besides the JARC program, FTA funds the Elderly and Persons 
with Disabilities Program (Section 5310). These program funds 
are apportioned to the States based upon U.S. Census data on 
the number of elderly persons and persons with disabilities. 
State recipients use these funds as they see fit to best meet 
the needs of persons with disabilities and the elderly 
(Medicare clients among them) throughout their State.
    In addition, services provided under other FTA programs, 
including the Urbanized Area and Nonurbanized Area programs, 
are designed to meet the needs of the general public, including 
older Americans. Transportation services, particularly high 
quality demand responsive service and ADA paratransit service, 
can be costly, and more equitable cost-sharing among agencies 
would result in increased access to Medicare and other life-
sustaining and life-enhancing services for older Americans.

Q.5. Can FTA work with the Federal funding agencies for 
Medicare? Is this an area for coordination?

A.5. FTA continues to work with Center for Medicaid and 
Medicare (CMS), among other Federal agencies, on coordination 
of human services transportation issues, Medicare 
transportation services among them. An Executive Order on 
coordinated human service transportation, issued by President 
Bush in February 2004, established a Coordinating Council that 
consists of Secretaries and leaders from 10 Federal Departments 
and is chaired by the Secretary of Transportation. The Council 
is responsible for identifying and implementing strategies to 
improve coordination of human service transportation services 
over the next year. This includes identifying duplication and 
restrictions in Federal laws and regulations. However, because 
the current transportation provisions identified under Mdicare 
do not allow support for ``nonemergency'' transportation, this 
limits our ability to address this issue at this time.
    Federal work groups have been formed and are currently 
meeting to achieve the tasks outlined by the President in six 
areas: (1) Education and Outreach; (2) Consolidated Access; (3) 
Regulatory Barriers and Relief; (4) Coordinated Planning; (5) 
Cost Allocation; and (6) Useful Practice.
    Earlier this year the Coordinating Council on Access and 
Mobility (CCAM) launched United We Ride. This is a five-part 
initiative to encourage Government agencies and nonprofit 
organizations to collaborate on transportation planning and to 
share resources in order to provide the best service for all 
their customers. The United We Ride efforts support the 
Executive Order in the following ways:

    Framework for Action: The Framework is a tool to help 
States and communities determine where they are and what needs 
to happen. It provides a starting point for groups at all 
levels to begin the dialog needed to improve coordinated 
services. Needs are identified and an action plan for 
implementation can be developed.
    State Leadership Awards: These awards recognized States for 
their leadership in building and implementing infrastructures, 
policies, and programs that facilitate human service 
transportation 
coordination. The winners, announced by Secretary Mineta in 
February 2004, were Florida, Maryland, North Carolina, Ohio, 
and Washington.
    National Leadership Forum: United We Ride hosted a forum 
for cross agency, governor-appointed, senior leadership teams 
to address State initiatives, to develop action plans and 
identify technical assistance needs to improve human service 
transportation services.
    State Coordination Grants: These State grants are designed 
to help address the gaps and needs related to human service 
transportation. The award criteria are flexible and simple.
    Help Along the Way: This technical assistance program 
provides hands-on assistance to States and communities in the 
development and delivery of coordinated human service 
transportation programs.
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