Funding for transit in peril-groups, Democrats

WASHINGTON Fri Feb 3, 2012 5:07pm EST

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WASHINGTON (Reuters) - Republican-sponsored transportation legislation that would radically change funding for public transit advanced in the House of Representatives on Friday, leaving Democrats, city leaders and transit groups concerned that commuter systems could be imperiled.

The plan, approved by the House Ways and Means Committee, would make a one-time $40 billion deposit into the trust fund for mass transit and end its traditional source of revenue from gasoline taxes, which also support a trust fund for highway construction.

"It's really a shot in the heart to metropolitan areas," said Representative Charles Rangel, a Democrat from New York who attempted to remove the measure during a Ways and Means Committee meeting on Friday.

The last comprehensive transportation spending legislation expired more than two years ago, and the U.S. government has since doled out money to states through piecemeal measures. The current temporary funding expires March 31.

A new long-term blueprint unveiled on Tuesday in the Republican-led House is quickly working its way through the chamber. It also won approval from the Transportation Committee in the early hours of Friday.

Both parties embrace infrastructure as a way to create jobs.

But taken with the transit funding changes, the 800-page bill includes a handful of other Republican-backed provisions that have outraged Democrats, sparking battles in Congress and with the Obama administration while dimming chances that transportation legislation will overcome partisan divisions and pass Congress this year.

"It weakens safety protections, cuts programs designed to maintain our existing roads and bridges, fails to respond to the American public's demand for transportation choices, short-circuits local decision-making, rolls back important environmental and labor protections, and doesn't enhance investments that are needed to repair crumbling infrastructure and create jobs," U.S. Transportation Secretary Ray LaHood said of the plan.

TRUST FUND SHORTAGES

Paying for the transportation bill is a major concern, with the trust funds for transit and highways perpetually at risk of going broke and the U.S. government having to frequently inject cash at the last minute.

The pressure has increased as conservative lawmakers seeking to drive down the country's debt and deficit demand each spending measure be a "pay-for" with an identified source of revenue.

Meanwhile, members of both major parties in Congress are reluctant to raise the gasoline tax as the economy continues to recover from recession.

Earlier this week, the nonpartisan Congressional Budget Office reported that improving vehicle fuel economy is slowing gas tax revenue growth. The highway fund, "will be unable to meet obligations in a timely manner sometime during 2013," it found, adding that the mass transit fund will be tapped out by 2014.

To bridge the gap from the trust fund shortfalls, the five-year bill in the House would use revenue from domestic energy leasing and production for some highway funding.

Ways and Means Committee Chairman Dave Camp said it will responsibly fund infrastructure improvements, create jobs and promote domestic energy development.

"By transferring new revenues from domestic energy development into the Highway Trust Fund, our bill helps to accomplish all three objectives-without raising taxes or adding to our national debt," the Michigan Republican said.

A letter sent to the Ways and Means Committee with 600 signatures from interest groups and state and city political leaders on Friday said that record levels of transit use show "now is not the time to eliminate guaranteed funding for our nation's public transportation system."

The letter, signed by a diverse collection of groups including the American Public Transportation Association, retiree group AARP, the National Association of Counties and the U.S. Chamber of Commerce, said the change would also subject federal funding for local transit to yearly congressional debates.

"This change will make it impossible for public transit systems across the country to plan for the future," said the letter, adding that the bill does not identify a source for the $40 billion.

(Additional reporting by John Crawley, editing by Gary Crosse)

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