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New funding rules should speed up major projects and increase local benefits.

Much of Washington is in obstruction mode these days, but not the Federal Transit Administration. The FTA recently announced changes to New Starts and Small Starts — its main capital funding programs for transit — designed to expedite the grant process. Together the programs fund about half the cost of light rail, commuter rail, bus rapid transit, and ferry systems in the United States.

The FTA's new rule was developed during a two-year outreach effort that considered roughly a thousand public comments. During that time officials kept two main goals in mind: to streamline the funding path of new transit projects, and to consider a wider range of possible benefits to local communities. To paraphrase the official write-up, it's like the old rules, but better [PDF]:

In balancing these goals, FTA is seeking to continue a system in which well-justified projects are funded. At the same time, FTA seeks to ensure that it does not perpetuate a system in which the measures used are so complex that they are difficult to understand or unnecessarily burdensome to project sponsors.

The new rules include four major provisions that should speed up major transit projects and increase local benefits.

1. Cost-effectiveness. Right now the FTA rates potential transit projects by the amount of time they'll save travelers. That requires comparing each project with a baseline alternative, such as a low-cost bus route, to get a sense of how much faster the new system will be. The FTA is replacing that measure with one that emphasizes ridership: they'll look at a project's cost per trip.

2. Environmental Benefits. Currently the FTA makes its environmental assessment based on whatever air quality designation has been given to the metro area by the Environmental Protection Agency. The new rule will consider additional health benefits that the proposed system might produce based on how much travel will shift from cars to transit. Potential benefits include emissions, energy use, safety improvements, and long-term public health changes.

3. Economic Development. The FTA evaluates the economic impact of a project based on development policies that are already in place. That analysis will continue, but the agency will also consider whether local plans will maintain or increase affordable housing in the aftermath of the new transit system. Project sponsors can also estimate potential economic benefits that might result from changes in vehicle-miles traveled.

4. Streamlining. In general the new rules will simplify the way project information is submitted and evaluated, and expand automatic qualification of a project based on the corridor it serves. Projects that meet a solid standard for the present can forgo a benefits analysis that extends far into the future, for instance. The agency is also preparing simpler methods of estimating benefits — including a national model of ridership to replace local ones.

The FTA no doubt expects some criticism. Cost-per rider is a standard if imperfect metric that favors systems with a large number of shorter trips. The Transportationist, while generally in favor of the new rule, doubts our ability to forecast economic development benefits. Earlier this year, before the final rule was written, the Wall Street Journal slammed the idea of eliminating baseline alternative projects — though Reconnecting America disputed the paper's conclusions.

On the whole, however, there are few foreseeable problems with the new system and many potential benefits. The FTA also expects the streamlined process to save taxpayers at least $425,000 a year (though the rule will cost about $600,000 to implement). The changes go into effect April 9. Fire up your grant machines.

Top image: Public light rail train passing by during the day on August 5, 2010 in Portland, Oregon. There are 52.4 miles of light rail lines in the Portland metropolitan area. Serenethos /Shutterstock

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