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James Oberstar

As Minneapolis Joins NACTO, Oberstar Backs Shift on Transit Operating Aid

7:30 AM PDT on March 31, 2010

At an event in Minneapolis today, House transportation committee
chairman Jim Oberstar (D-MN) announced his support for giving urban
transit agencies more flexibility to spend federal transportation
formula money on operating -- a change in the current law that has already won the backing of Transportation Secretary Ray LaHood but has split the transit industry.

transit_oberstar_3_30_10.jpgOberstar (center) joined New York City transport chief Janette Sadik-Khan (right) at today's event. (Photo: B.Clements, Finance & Commerce)

Oberstar appeared at an event marking Minneapolis' move to join the National Association of City Transportation Officials (NACTO),
founded 14 years ago by then-New York City Transportation Commissioner
Elliot Sander to counterbalance the influence of state DOTs'  voice in
D.C., the American Association of State Highway and Transportation

Oberstar's specific remarks on transit operating
aid were unavailable as of press time. But transport committee
spokesman Jim Berard said the Minnesotan supported "in principle" the
conept of allowing transit agencies from areas with populations greater
than 200,000 to use their federal transportation formula grants on
operating expenses.

Under current law, urban transit
agencies are restricted to spending federal formula money on capital
expenses, such as purchasing new rail cars or paying salaries for bus

Congress agreed last year
to give transit officials the freedom to redirect 10 percent of their
federal stimulus aid to operating budgets, underscoring that the change
was a temporary response to the recession.

The American Public Transportation Association (APTA), the transit industry's chief lobbying group for more than a century, has opposed
the use of formula grants for transit operating, preferring that
already-scarce highway trust fund dollars be reserved for capital
spending on rail and buses. APTA did not return a request for comment
by press time on the growing support for changing the existing rules
governing transit operating funds.

It's worth noting that the
change Oberstar and LaHood have endorsed would not come until lawmakers
take up a new long-term federal transportation bill, which may not
occur until next year. Also left undetermined is the share of formula
funds that would be made available for transit operating costs if the
proposal becomes law; legislation offered by
Sen. Sherrod Brown (D-OH) and Rep. Russ Carnahan (D-MO) would okay the
use of between 30 percent and one-half of federal formula grants.

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