Contents

• Introduction
• The Federal Public Transportation Program
• Potential Reauthorization Issues
• Program Funding
• Capital Expenses
• Operating Expenses
• Ridership, Fare Revenues, and "Fiscal Cliff"
• Highway Trust Fund
• Appropriated Budget Authority
• Federal Transit Administration Staffing
• Capital Investment Grants Program
• Low and No Emission Vehicle Program
• Public Transportation Safety
• Public Transportation Security
• Emergency Relief Program and Infrastructure Resilience
• Rural and Tribal Transit
• Private Contracting
• Joint Development and Transit Oriented Development
• Policy Preference for Families with Young Children

Summary

Federal funding assistance to public transportation agencies is provided primarily through the public transportation program administered by the Department of Transportation's Federal Transit Administration (FTA). The federal public transportation program was most recently authorized from FY2022 through FY2026 as part of the Infrastructure Investment and Jobs Act (IIJA; P.L. 117-58). The IIJA authorizations are set to expire on September 30, 2026. Congress may consider a number of issues and policy options related to possible reauthorization of public transportation funding.

The overall level of funding for the public transportation program is typically a major topic in surface transportation reauthorization. The IIJA provided about a 67% increase (in nominal dollars) in annual funding for public transportation compared with the prior authorization, the Fixing America's Surface Transportation Act (FAST Act; P.L. 114-94), as extended. Public transportation program funding authorized and appropriated under IIJA averaged $21.4 billion annually in FY2022-FY2026. Inflation, particularly in 2021-2023, has eroded some of the purchasing power of this funding.

The source of funds for the public transportation program, along with the solvency of the Highway Trust Fund (HTF) and its two accounts—the highway account and the mass transit account—may be another issue in the reauthorization debate. Traditionally, 80% of program funding has come from the mass transit account of the HTF. Outlays from the account have outpaced receipts, excluding U.S. Treasury General Fund (general fund) transfers, for over two decades, an imbalance the Congressional Budget Office (CBO) projects will continue in the future under current law. Bringing the receipts and outlays of the mass transit account into balance would involve a cut in program spending, an increase in revenues paid into the account, or a combination of the two. An increase in revenues could involve a commitment to regular transfers from the general fund.

In addition to funding from the HTF, the IIJA provided multiyear advance appropriations from the general fund for several public transportation programs. In light of the problems with the HTF, Congress could decide to rely more on appropriated budget authority. One option for Congress is to provide a greater share of funding in annual appropriations. An objection to using general fund instead of HTF money is that it provides less certainty to transit agencies that have to plan operations and capital purchases over several years. Multiyear advance appropriations would blunt this objection by providing greater certainty from year to year.

Historically, the federal public transportation program has prioritized capital expenditures, with support for operating expenses in some circumstances. Greater federal support for transit operations could be a reauthorization issue, especially as transit agencies struggle with lower ridership and fare revenue largely due to the disruptions of the COVID-19 pandemic.

The Capital Investment Grants Program (CIG), a major discretionary capital program, may be a topic in the surface transportation reauthorization debate. CIG provides funding to support the construction of new fixed-guideway transit systems (such as transit rail, bus rapid transit, and ferry systems) and to add to existing systems. The IIJA appropriated $1.6 billion per year from the general fund for CIG and authorized another $3.0 billion per year from the general fund, subject to appropriation (in nominal dollars). Supporters of CIG have sought more funding and greater certainty from year to year. Critics contend that CIG funding encourages communities to build expensive fixed-guideway infrastructure rather than invest lesser sums in improving bus service.

Although alternatively fueled public transportation buses are generally eligible for federal transit funding, Congress has also dedicated funding to such buses through the competitive Low and No Emission Vehicle (Low-No) Program. Funding for the Low-No Program increased from an annual $55 million in the FAST Act to an annual $1.1 billion in the IIJA. Options for Congress include reauthorizing the Low-No Program at a similar or higher funding level as enacted in the IIJA; reducing funding to a much lower level to encourage experimentation rather than deployment as was enacted in the FAST Act; or abolishing the program, effectively returning decisions about vehicle technology to funding recipients.

Other issues that Congress may consider include public transportation safety and security, emergency relief funding and infrastructure resilience, the rural and tribal transit programs, options for transit-oriented development, and priority criteria for competitive grant awards.

Introduction

Federal funding assistance to public transportation agencies is provided primarily through the public transportation program administered by the Department of Transportation's (DOT's) Federal Transit Administration (FTA). The federal public transportation program was authorized from FY2022 through FY2026 as part of the Infrastructure Investment and Jobs Act (IIJA; P.L. 117-58) and is set to expire in September 2026. This report discusses selected issues that may arise if Congress chooses to consider reauthorization of the program.

In federal law, public transportation—also known as public transit, mass transit, and mass transportation—includes local buses, subways, commuter rail, light rail, paratransit (often service for the elderly and disabled using small buses and vans), and ferryboats and excludes Amtrak, intercity buses, and school buses (49 U.S.C. §5302). In 2023, about 50% of public transportation trips were made by bus, 36% by heavy rail (also called metro and subway), 5% by light rail (including streetcars), and 4% by commuter rail. Paratransit accounted for about 2% of all public transportation trips; other modes, such as ferries, comprised about 2%.¹

The COVID-19 pandemic affected public transportation ridership significantly. In each of 2018 and 2019, about 10.0 billion trips were taken by public transportation nationally. Ridership dropped to a historic low of 4.5 billion trips in 2021 and recovered to about 7.7 billion trips in 2024. In 2022, public transportation accounted for 2% of all daily trips, and 4% of workers reported that public transportation was their usual commute mode.² These shares were lower than those reported prior to the pandemic in 2017, when public transportation accounted for about 3% of all daily transportation trips, and about 7% of workers reported that public transportation was their usual commute mode.³

Although public transportation service is provided in a wide range of places—including small urban areas, rural areas, and tribal areas—ridership is concentrated in a few large cities and their surrounding suburbs, particularly the New York City metropolitan area.⁴

The Federal Public Transportation Program

Most federal funding for public transportation is authorized in multiyear surface transportation authorization acts. The IIJA authorized and appropriated $108 billion for five fiscal years (FY2022 through FY2026), an average of $21.4 billion per year (unadjusted for inflation).⁵ This was about a 67% increase (in nominal dollars) in annual funding for public transportation compared with the $12.8 billion annual funding provided under the prior authorization, the Fixing America's Surface Transportation Act (FAST Act; P.L. 114-94), as extended (FY2016-FY2021).⁶

The IIJA provided funding for seven major programs that can fund public transportation: (1) Urbanized Area Formula; (2) State of Good Repair (SGR); (3) Capital Investment Grants Program (CIG) (4) Low or No Emission Vehicle; (5) Bus and Bus Facilities; (6) Rural Area Formula; and (7) Enhanced Mobility of Seniors and Individuals with Disabilities. The IIJA also provided funding for a number of other, smaller programs.

As with previous surface transportation authorization acts, the IIJA funded public transportation from the mass transit account of the Highway Trust Fund (HTF) and authorized further funding subject to appropriations from the General Fund of the U.S. Treasury (general fund). Unlike previous authorization acts, the IIJA also provided multiyear advance appropriations from the general fund. About 65% of the funding in the IIJA was authorized from the HTF as contract authority,⁷ 20% was multiyear advance appropriations, and 16% was authorized subject to future appropriations.⁸ The combination of these sources of funding varied by program (Figure 1).

Figure 1. Federal Public Transportation Program Funding by Program Funding Authorized and Appropriated in the IIJA, FY2022-FY2026

Source: Figured created by CRS from analysis of the Infrastructure Investment and Jobs Act (P.L. 117-58).

Funding for public transportation is sometimes also provided by other authorities. Appropriations acts for FY2018-FY2025 provided additional general fund money for several programs that previously received federal money only from the HTF. For example, the Consolidated Appropriations Act, 2023 (P.L. 117-328), provided $140 million in annual appropriations for the Bus and Bus Facilities Program. Furthermore, after a decade-long moratorium on community project funding/congressionally directed spending (CPF/CDS), often called "earmarks," Congress provided funding specifically for Member-requested projects in FY2022-FY2024. The amounts earmarked for public transportation projects were $201 million in FY2022, $360 million in FY2023, and $207 million in FY2024.⁹

Funding for FTA's Public Transportation Emergency Relief (ER) Program, which makes grants from the general fund for emergency repairs following natural disasters or other emergencies, is typically provided in supplemental appropriations acts.¹⁰ Additionally, $69.5 billion in emergency funding from the general fund was provided to transit agencies in response to the COVID-19 pandemic.¹¹ State and local officials can also choose to transfer (or "flex") money from federal highway programs to fund public transit projects. In FY2024, for example, officials flexed $1.5 billion in federal highway funding to transit projects in various localities.¹²

The costs of providing public transportation service fall into two main categories, operating expenses and capital expenses. Operating expenses include vehicle operation and maintenance, maintenance of stations and other facilities, general administration, and purchase of transportation from private operators. Capital expenses are related to the purchase of equipment, such as buses, rail lines, and rail stations. In general, federal public transportation programs allow an 80% maximum matching share for capital projects and a 50% maximum share for operating expenses.

Potential Reauthorization Issues

Program Funding

The overall funding level for the federal public transportation program is typically a major topic in the surface transportation reauthorization debate. The IIJA provided about a 67% increase (in nominal dollars) in annual funding for public transportation compared with the period authorized by the FAST Act, as extended. Public transportation program funding authorized and appropriated under IIJA averaged $21.4 billion annually from FY2022 through FY2026 compared with $12.8 billion annually from FY2016 through FY2021 (unadjusted for inflation). Inflation, particularly in 2021-2023, has eroded some of the purchasing power of the IIJA funding.

State and local sources of funding, including fares, typically provide the majority of public transportation agency revenues. Data from FTA show that in 2019, prior to the disruptions related to the COVID-19 pandemic, the federal government provided 16% of public transit funding overall, that is 42% of capital expenses and 8% of operating expenses. In 2023, the federal share was 23% overall, that is 43% of capital and 15% of operating expenses.¹³ A higher level of federal funding might improve the condition and performance of public transportation infrastructure. However, more funding by the federal government may not necessarily translate into more spending overall if transit providers substitute federal dollars for nonfederal dollars.

Capital Expenses

Approximately every two years, DOT prepares a conditions and performance (C&P) report to Congress providing investment estimates for highway and public transportation infrastructure.¹⁴ The most recent C&P report (2024) showed that the condition of transit infrastructure deteriorated somewhat between 2008 and 2018. For example, over this period, the share of transit buses and rail vehicles not in a state of good repair increased from 11% to 15% and from 4% to 9%, respectively.¹⁵ Another indicator of the condition of public transportation infrastructure is the reinvestment backlog, which DOT defines as "an indication of the amount of near-term investment needed to replace assets that are past their expected useful lifetime."¹⁶ DOT estimated the reinvestment backlog to be $124 billion in 2018 (in 2024 dollars), about 9% of the total value of transit assets.¹⁷

DOT noted that average annual capital spending on transit from 2014 through 2018 (in 2024 dollars) was $25.1 billion, with $16.5 billion spent on preservation and $8.6 spent on expansion. If that level of spending were continued in the 20-year period from 2019 through 2038, DOT estimated that the condition of transit systems would marginally decline through 2038, and the backlog would increase from $124 billion to $130 billion (in 2024 dollars) (see "Sustain Actual Spending" in Table 1).

DOT's report also provided spending scenarios to achieve different condition and performance goals from 2019 through 2038 (Table 1). DOT estimated that the reinvestment backlog could be eliminated by redirecting expansion spending to asset preservation (see "State of Good Repair Benchmark"). In that scenario, asset preservation spending would be $24.9 billion, an amount 50% higher than the annual spending of $16.5 billion for that purpose from 2014 through 2018 (in 2024 dollars).¹⁸ Alternative scenarios could reduce the backlog to zero by 2038 with more spending on preservation of the system, about $23 billion annually, and either less ($8.1 billion) or more ($10.4 billion) expansion spending (in 2024 dollars). See "Expansion" and "Expansion with Growth" in Table 1. Thus, total spending would be higher in these scenarios at $31.1 billion and $33.5 billion annually (in 2024 dollars). The expansion with growth scenario assumes ridership growth beginning in 2030.¹⁹

DOT's C&P report makes no recommendation about the federal government's share of capital investment. From 2010 through 2019, the 10-year period prior to the COVID-19 pandemic, the federal government's share of capital spending was about 40%.²⁰ If this share were to continue, the C&P report suggests that about $9.9 billion of federal spending annually would be needed to eliminate the reinvestment backlog in the 2019-2038 period (in 2024 dollars).²¹ Together with the federal share of expansion costs, another $3.2 billion to $4.2 billion annually, federal capital spending might total about $13.1 billion to $14.1 billion per year (in 2024 dollars).

Over the 10-year pre-COVID-19 period (2010-2019), federal spending on public transportation totaled about $15.4 billion per year, that is $10.1 billion per year on average for capital expenses and $5.3 billion per year for operating expenses (in 2024 dollars).²² This is less capital spending than the amount DOT estimated would be needed in the 2019-2038 period (possibly $13.1 billion to $14.1 billion, as noted above). However, the IIJA provided about a 67% increase (in nominal dollars) in annual funding for public transportation compared with the period authorized by the FAST Act, as extended.²³ The amount authorized and appropriated in the IIJA was $20.5 billion in FY2022 and $22.3 billion in FY2026 (in nominal dollars).²⁴

Based on DOT's estimates of spending needs, these amounts, averaging $21.4 billion annually over the five-year period (FY2022-FY2026), are somewhat higher than the $18.4-$19.4 billion annual spending estimate that combines DOT's estimated $13.1-$14.1 billion in federal capital support and the actual $5.3 billion in federal operating support. This difference may provide an opportunity to spend more federal dollars on operating expenses and allow for enough capital spending to reduce the reinvestment backlog and to expand transit infrastructure. This conclusion assumes that federal funding would continue to be provided at the level in the IIJA past its expiration due at the end of FY2026 and adjusted for inflation and that state and local governments would maintain their levels of capital and operating spending. Dedicating a greater share of federal funding to operating costs could slow transit expansion and the reduction of the reinvestment backlog.²⁵ Additional federal funding dedicated to operating expenses, funding beyond the IIJA amounts, would likely not affect transit system asset capacity and condition.

Operating Expenses

Historically, the federal public transportation program has prioritized capital expenditures, with support for operating expenses in some circumstances. Greater federal support for transit operations could increase the quantity of transit service offered, reduce fares, or both.

In the past, particularly in the 1970s and early 1980s, substantial operating support caused the costs of providing service to increase, mainly due to increases in wages and fringe benefits and service expansions on routes with less demand.²⁶ Beginning in FY1998, the Transportation Equity Act for the 21^st Century (TEA-21; P.L. 105-178) eliminated federal operating support for transit in urbanized areas of 200,000 people or more but broadened the definition of capital expenses to include preventive maintenance, which was previously considered in federal law as an operating expense. If Congress were to provide greater flexibility to use federal funding for operating expenses, transit agencies could neglect maintenance and asset renewal, leading to a more rapid decline in the condition of capital assets. Existing flexibility to use capital funds for maintenance may help agencies preserve equipment and facilities.²⁷

If Congress were to decide that more federal support for public transportation operating costs is warranted, options could include providing short-term funding or—given the likely long-term reduction in public transportation ridership and fare revenue—greater, long-term funding. Alternatively, Congress might consider reducing operating assistance or federal transit assistance overall. One option for reducing operating assistance could be to change the definition of a capital expense in federal law to exclude items traditionally considered operating expenses, such as maintenance (as it was defined before 1998). Federal policy changes, such as incentivizing higher transit ridership, could reduce the need for operating support. This might include distributing some funding based on performance measures, encouraging congestion pricing schemes, and raising user fees on automobiles. For example, H.R. 2864 (116^th Congress) proposed to raise the federal tax on gasoline by 5 cents per year for five years.

Congress may also consider creating a new program for operating support. For example, the Stronger Communities Through Better Transit Act (H.R. 3744, 117^th Congress) would have authorized $20 billion per year for four years from the general fund to be distributed by formula for "eligible operating support costs of public transportation and associated capital improvements that make substantial improvements to transit service as measured by a comparison to the number of revenue hours of service provided by the recipient." Eligible projects would have included decreasing headways (increasing frequency of service); expanding service areas, hours, or days; and planning that would result in a net increase in service hours. Another bill, the Freedom to Move Act (H.R. 2848/S. 1282, 118^th Congress) would have authorized $5 billion annually for five years from the general fund to provide grants "to eligible entities, on a competitive basis to cover the lost fare revenue for fare-free public transportation and improve public transportation."

The American Public Transportation Association (APTA) has recommended adding additional flexibility to the so-called "100 bus rule." According to 49 U.S.C. §5307(a), small transit agencies in large urban areas (i.e., those with 200,000 people or more) can use some of their federal funding for operating expenses. Small transit agencies are those with 100 buses or fewer in peak service. Transit agencies with 75 buses or fewer can use up to 75% of federal support on operating expenses, and agencies with 76-100 buses can use up to 50%. APTA recommends permitting agencies with 101-125 buses to use up to 25% of federal support on operating expenses.²⁸

Ridership, Fare Revenues, and "Fiscal Cliff"

Lower ridership and fare revenues, along with the exhaustion of federal COVID-19 emergency relief funds, are major causes of transit agency budget problems sometimes referred to as a "fiscal cliff." COVID-19 had an unprecedented effect on public transportation ridership, operating revenues, and public transportation agency budgets. Taxes and tolls dedicated to public transportation agencies recovered relatively quickly from the disruption, but ridership and fare revenues were slower to bounce back. For example, at the end of the first quarter of 2025, bus ridership was about 85% of what it had been pre-pandemic, and rail ridership was below 75% (Figure 2). Along with lower ridership, the average fare per trip declined from about $2.00 in 2019 to about $1.50 in 2023, the most recent year data are available (in inflation-adjusted 2024 dollars). Consequently, total fare revenue collected in 2023 was about $10 billion, down from $20 billion in 2019 (in inflation-adjusted 2024 dollars).²⁹

Reduced ridership and fare revenue have upended the budgets of many public transportation agencies, especially the largest agencies that operate multimodal systems. According to APTA, transit agencies had obligated more than 99% of federal COVID-19 emergency relief funds by the middle of 2023. In a survey of its members, APTA found that about half of transit agencies and more than two-thirds of large agencies said they would experience severe budget problems in the next five fiscal years (FY2024-FY2028).³⁰ For example, the Southeastern Pennsylvania Transportation Authority (SEPTA) in April 2025 drafted a budget with service cuts of 45% and fares increases of 22% without greater funding support.³¹ The Bay Area Rapid Transit (BART) in San Francisco and Pittsburgh Regional Transit, among others, have announced similar problems.³²

Figure 2. Quarterly Public Transportation Ridership by Selected Mode

Source: American Public Transportation Association, "Ridership Report," https://www.apta.com/research-technical-resources/transit-statistics/ridership-report/.

Highway Trust Fund

The solvency of the HTF and its two accounts, the highway account and the mass transit account, is a potential topic in public transportation program reauthorization. Outlays from the mass transit account have outpaced receipts, excluding general fund transfers, for over two decades. The Congressional Budget Office (CBO) projects this imbalance will continue under current law.³³ Over the five-year period FY2027-FY2031, CBO expects the gap between revenues and outlays to total $55.3 billion, an average of $11.1 billion annually (Table 2).

The primary revenue source for the HTF is motor fuel taxes, which were last raised in 1993. Currently, of the 18.3 cents-per-gallon tax on gasoline and 24.3 cents-per-gallon tax on diesel that go to the HTF, 2.86 cents is deposited in the mass transit account. Since 2008, Congress has chosen to transfer general fund monies into the mass transit account to permit a higher level of spending than motor fuel tax revenues alone could sustain. These transfers have totaled $60 billion.³⁴ The IIJA transferred $28 billion to the mass transit account from the general fund.³⁵

According to FTA, a balance of at least $1 billion in the mass transit account is required to ensure that the agency has sufficient funds to make mandated payments to transit agencies. CBO estimates that if Congress were to extend current law without providing for further transfers from the general fund to the mass transit account, the balance in the mass transit account would approach $1 billion at some point in FY2028. This would likely require FTA to slow payments to transit agencies. Outlays also outpace receipts in the highway account; the account's current balance may indicate that payment problems are also expected to begin in FY2028.³⁶

Bringing the receipts and outlays of the mass transit account into balance would involve a cut in program spending, an increase in revenues paid into the account, or a combination of the two. An increase in revenues could involve a commitment to regular transfers from the general fund. With the highway account facing similar problems, another possible change would be to redirect revenues from the mass transit account to the highway account and to fund the transit account with general fund appropriations via multiyear advance appropriations or annual appropriations. Redirecting revenues to the highway account would not make up the entire shortfall in that account.

Appropriated Budget Authority

The IIJA provided multiyear advance appropriations for several public transportation programs (see "General Fund, Appropriated" in Figure 1). Congress also has used annual appropriations bills to fund some programs. With the gap between revenues and expenditures in the HTF, an option for Congress is to rely more heavily on appropriated budget authority. One option is to provide a greater share of funding in annual appropriations. An objection to using appropriated budget authority instead of contract authority is that it provides less certainty to transit agencies that have to plan operations and capital purchases over several years. Multiyear advance appropriations would blunt this objection by providing greater certainty from year to year.

Federal Transit Administration Staffing

During the second Trump Administration, several actions have been taken to restructure the federal workforce, including removing probationary employees, offering employees opportunities for deferred resignation, and pursuing mass layoffs (often referred to as "reduction-in-force").³⁷ These efforts have been challenged in court by affected employees and federal employee unions, leading to some reversals and delays. In other cases, separated employees have been rehired by government agencies.³⁸ DOT may attempt to hire more employees for certain purposes, although not necessarily for the administration of public transportation programs.³⁹

The full extent of these actions is unclear, but a reduction in FTA's workforce raises the issue of whether the agency will have the capacity to effectively carry out its responsibilities. These responsibilities include administering federal funding for public transportation, overseeing public transportation safety and planning, and supporting public transportation through research and technical assistance.⁴⁰ Compared with its formula programs, FTA's reduced workforce may have a greater effect on its competitive programs, such as CIG, which tend to require more administrative capacity (e.g., staff time) and may be more reliant on the technical expertise and experience of agency staff.

According to one news report, about one-third of FTA staff accepted the Trump Administration's offer of deferred resignation, the largest share of DOT's administrations and offices.⁴¹ In DOT's FY2026 budget estimates, FTA reported a FY2025 staff of about 700 full time equivalents (FTEs).⁴² A reduction of one-third would leave FTA with a staff of 470 FTEs, though there is no public information about the distribution of staffing changes across the agency. In FY2025, about 40% of staff (279 FTEs) were located in regional offices that "work with local transit officials to develop and manage grants."⁴³ At headquarters, the largest offices in terms of FTEs were the Office of Administration (73 FTEs), Office of Safety and Oversight (65 FTEs), Office of Budget and Policy (65 FTEs), the Office of Program Management (63 FTEs), and the Office of Planning and Environment (43 FTEs).⁴⁴

Capital Investment Grants Program

CIG provides funding to support the construction of new fixed-guideway transit systems and to add to existing systems. Fixed-guideway services include transit rail, bus rapid transit (BRT), and ferry systems.⁴⁵ CIG projects are categorized into "Small Starts" and "New Starts," by cost and federal funding support. Small Starts cost less than $400 million, and the amount of federal funding sought is less than $150 million. New Starts cost $400 million or more, and/or federal funding sought is $150 million or more. CIG funding is also permitted for "Core Capacity" projects, which are investments in existing fixed-guideway systems that increase the capacity by 10% of a corridor that is at or will be at capacity in 10 years.

The IIJA appropriated $1.6 billion per year from the general fund for CIG and authorized another $3.0 billion per year from the general fund, subject to appropriation (in nominal dollars). Adjusted for inflation, annual funding appropriated to date in the period covered by the IIJA (FY2022-FY2025) has averaged 44% more than in the period covered by the FAST Act (FY2016-FY2021).⁴⁶

Supporters of CIG argue that federal support is necessary because transit agencies would not be able to finance major capital projects alone.⁴⁷ Supporters also point to robust demand around the country for CIG funding. According to FTA's CIG Dashboard, published in accordance with 49 U.S.C. §5309(r), in August 2025, 49 projects were in various stages of being considered for CIG funding: 2 Core Capacity projects, 14 New Start projects, and 33 Small Starts projects.⁴⁸ This is in addition to projects being constructed under the terms of executed grant agreements. Of the 49 projects on the dashboard, 36 included an estimate for CIG funding—$28 billion in total in federal assistance from CIG.

Critics contend that CIG funding encourages communities to build expensive fixed-guideway infrastructure rather than invest lesser sums in improving bus service.⁴⁹ New rail service can be detrimental to an existing bus network as service overall is realigned and resources are shifted toward operating and maintaining the new rail lines.⁵⁰ In summarizing studies of rail transit systems in general (not CIG projects only), one researcher commented that "the dominant view of economists has been that rail transit investments generally have been ineffective and expensive, and the benefits do not justify the costs."⁵¹ Some studies show significant differences in benefit/cost ratios among projects. According to one study, two of the systems with the largest net benefits are the subway systems in San Francisco and New York City, while the rail system in Buffalo and those operated by New Jersey Transit in Newark, Jersey City, and Trenton have some of the largest net losses.⁵² A complicating factor is the effect of the COVID-19 pandemic. Ridership has not fully recovered from the nadir reached in the second quarter of 2020, calling into question the benefits of new and expanded transit systems, such as transit rail lines.

One policy option would be to eliminate CIG and redirect the funding through the formula programs. This would likely direct more funding to bus transit, a more flexible mode of public transportation that has maintained a greater amount of its ridership than rail. Another option would be to direct a greater share of CIG funding to projects that might have a better payoff, either projects with lower costs, such as BRT, or lines with proven ridership, such as Core Capacity projects. Changes to CIG over the past 25 years, such as the introduction of Small Starts and Core Capacity projects, have shifted federal funding toward these projects. A further change could include raising the qualifying thresholds in the evaluation of costs and benefits. Some proposals have focused on encouraging denser development, particularly housing, around stations. For example, the Build More Housing Near Transit Act of 2023 (H.R. 6199, 118^th Congress) proposed an improved project justification rating "if the applicant submits documented evidence of pro-housing policies for areas located within walking distance of, and accessible to, transit facilities along the project route."

Part of the challenge with major public transportation projects, especially new transit rail lines, is the construction cost per mile. Research has shown that such costs in the United States are some of the highest in the world. The reasons for the high costs are overbuilding, such as bigger tunneled stations; lack of design standardization; labor (both blue and white collar); and procurement (e.g., "a lack of internal capacity at agencies to manage contractors, insufficient competition, and a desire to privatize risk that leads private contractors to bid higher").⁵³ Despite the higher costs, "rail projects in the United States tend to be routed along 'paths of least resistance' such as freight rail or highway corridors, rather than dense areas where transit would make the most sense for riders or communities."⁵⁴

Policy options for CIG include adding a project evaluation factor that considers innovative cost-saving initiatives. This might include innovation related to project governance, such as the creation of a special purpose delivery vehicle.⁵⁵ Another option is for Congress to provide greater funding to FTA for technical assistance on such things as standardization, project workforce needs, and third-party procurement. To shorten the CIG funding process, presumably to save time and money overall, another option would be to make more projects eligible for the abbreviated Small Starts evaluation process.⁵⁶ For example, H.R. 3335 (117^th Congress) proposed to raise the project cost threshold to less than $600 million and the amount of federal funding sought to less than $360 million. APTA has recommended changes to the Expedited Project Delivery for CIG Pilot Program, such as increasing the maximum federal CIG share from 25% to 50% as a way to speed up projects.⁵⁷

Low and No Emission Vehicle Program

Although public transportation buses account for a relatively small share of air pollutants and greenhouse gases from transportation, federal policy has focused to some extent on reducing emissions by providing grant funding specifically for purchasing alternatively fueled buses and supporting infrastructure.⁵⁸ Alternatively fueled public transportation buses are generally eligible for federal transit funding. In addition, Congress has dedicated funding to reducing emissions from buses, mainly through the competitive Low and No Emission Vehicle (Low-No) program. Funding for the Low-No program increased from an annual $55 million in the FAST Act to an annual $1.1 billion in the IIJA.

In the Low-No program, buses that produce no carbon or particulate matter are categorized as zero emission buses (ZEBs), and buses that are low emission are defined in law as "a passenger vehicle used to provide public transportation that the Secretary determines sufficiently reduces energy consumption or harmful emissions, including direct carbon emissions, when compared to a comparable standard vehicle."⁵⁹ The Low-No program requires that no less than 25% of program funds are reserved for low emission buses. To date, most of the IIJA funding from the Low-No program has been used to purchase battery-electric buses (BEBs) and infrastructure, and some has gone to purchasing other zero emission hydrogen fuel cell buses. Low emission buses supported by IIJA funding include those fueled by compressed natural gas, propane, and diesel-electric hybrids.⁶⁰ The Biden Administration prioritized ZEBs; a recent notice of funding opportunity (NOFO) issued by the Trump Administration prioritizes low emission buses.⁶¹

An issue in the procurement of alternatively fueled buses, such as BEBs, compared with diesel buses is the initial capital cost. For BEBs, the price differential is now in the range of about 33%- 50%.⁶² This differential has narrowed since 2010, with one study finding that "non-electric bus prices have risen by 0.7% per year faster than inflation since 2010, while electric bus real prices have fallen by about 3% annually."⁶³ Moreover, some researchers estimate that the life cycle cost of a BEB can be competitive with a diesel bus because of the lower maintenance and fuel costs in some circumstances and lower externalities, such as air pollution.⁶⁴

Concerns about the capital cost of buses have been heightened by problems in the domestic bus manufacturing industry, especially companies making BEBs. The APTA Bus Manufacturing Task Force (APTA task force) stated the following:

A decade ago, there were 10 bus manufacturers producing more than 100 buses annually; today there remain only three. The 2020-2023 pandemic severely undermined the financial stability of the bus OEMs [original equipment manufacturers]. Labor market tumult, hyperinflation in material and component prices, commodity and chip shortages, hardships encountered by parts suppliers, and the significant increase in the cost of capital, combined to reduce cash flow, impose lengthy delays, and leave many procurements under water. The result is an industry at risk, with reduced competition and increasing bus acquisition costs.… Zero emission buses (ZEBs) are more expensive than diesel buses and require a significant capital outlay to support manufacturing.⁶⁵

Options for Congress include reauthorizing the Low-No program at a similar or higher funding level as enacted in the IIJA; reducing funding to a much lower level—such as was enacted in the FAST Act—to encourage experimentation rather than deployment; or abolishing the program, effectively returning decisions about vehicle technology to funding recipients. Noting the costs of transitioning transit bus fleets to ZEBs, the APTA task force called for reliable funding of ZEBs, or at least for the incremental cost.⁶⁶ If Congress decides to continue funding the Low-No program, it may consider the source of the funding. Congress could authorize contract authority from the mass transit account of the HTF, appropriate funding from the general fund, authorize funding subject to appropriation, or provide a combination of two or more of these options. The IIJA provided an average annual $75 million in contract authority and an annual $1.05 billion in multiyear advance appropriations.

Critics of the Low-No program have taken issue with the use of federal funds to direct transit agencies toward certain technologies, especially BEBs. For example, congressional testimony on behalf of the Community Transportation Association of America (CTAA) noted that "dedicated bus capital funds are vital to CTAA's members, but these important investments must be flexible to allow systems to buy the right rolling stock for their operations and not force them into technologies that don't work for them."⁶⁷ To that end, one option would be to raise the set-aside of program funds for low emission buses. Another option would be to create a grant program for which pollution-reducing projects for several transportation modes, including public transportation, would be eligible. For example, the BUILD GREEN Infrastructure and Jobs Act (H.R. 8253/S. 3216, 118^th Congress) would have made public transportation, including buses, BRT, and transit rail, eligible for such a grant program.

Public Transportation Safety

Public transportation is a relatively safe mode of passenger transportation compared with traveling by car, light truck, bicycle, scooter, or walking. The fatality rate per passenger mile for cars and light trucks is about double that of transit buses and five times that of heavy rail. While the fatality rate per passenger mile for commuter rail is more comparable to cars and light trucks, most commuter rail fatalities are nonusers, such as trespassing pedestrians and those in highway vehicles struck at grade crossings.⁶⁸

Congress provided FTA with more oversight authority in public transportation safety in the Moving Ahead for Progress in the 21^st Century Act (MAP-21, P.L. 112-141), the surface transportation reauthorization that preceded the FAST Act. Among other things, MAP-21 required funding recipients to develop a Public Transportation Agency Safety Plan (PTASP). Section 30012 of the IIJA modified the PTSAP requirement in a number of ways, including for recipients of Urbanized Area Formula Program funding in urbanized areas of 200,000 people or more to establish a safety committee convened by a joint labor-management process with an equal number of frontline employee representatives and management representatives.⁶⁹ APTA argues that the rule "prevents the 'Accountable Executive' of a transit agency from serving in a tiebreaking role as part of Safety Committee dispute resolution procedures under any circumstance; and … removes an Accountable Executive's decisionmaking authority regarding safety risk mitigations in the required safety risk reduction program."⁷⁰ Consequently, APTA recommends amending 49 U.S.C. §5329(d)(5) to include a new subsection that would read "(C) Final Decisionmaker. The Accountable Executive of a recipient shall determine whether to implement the risk-based mitigation or strategies recommended by the Safety Committee and shall serve as the sole tiebreaker of any Safety Committee dispute resolution procedures."⁷¹

The safety of automated vehicles (AVs), especially buses, may also be considered in the context of surface transportation reauthorization. Industry proponents assert that AV technology "holds the potential to make transit more safe," as well as more sustainable, accessible and equitable.⁷² There has been some use of shared ride AVs, especially to connect people to regular transit service over the first and last mile, but the timing of a wider deployment at scale remains unclear.⁷³ The Amalgamated Transit Union (ATU) argues that automated buses are currently unsafe and should not be authorized for highway use,⁷⁴ whereas the AFL-CIO's Transportation Trades Department argues that "we must require the Federal Transit Administration to establish binding minimum safety standards for the deployment of automated transit vehicles. … These standards must include requirements for operator presence, physical workstation protections, and full compliance with all existing drug and alcohol testing rules."⁷⁵ For more information about AVs, see CRS Report R48605, Safety Considerations for Automated Passenger Vehicles, by Naseeb A. Souweidane.

Public Transportation Security

Public transportation security generally focuses on combatting crime and preventing terrorism on public transit. Countering the threat of terrorism on bus and rail systems is primarily addressed by the Department of Homeland Security and the Transportation Security Administration.⁷⁶ As such, it is not typically a focus of surface transportation reauthorization.⁷⁷ Public transportation crime, however, may be a topic of interest in the reauthorization debate.

Crime on public transportation systems has been generally worse since the beginning of the COVID-19 pandemic. According to DOT data, in the five years from 2020 through 2024, homicides in transit systems were more than double on average than in the five years before the pandemic, 2015 through 2019. Assaults increased on average by about 80%.⁷⁸

Public transportation security is primarily provided by local operators and local law enforcement agencies. FTA has taken some steps to improve crime prevention. For example, in 2022, FTA launched the Enhanced Transit Safety and Crime Prevention Initiative "to provide information and resources to help transit agencies address and prevent crime on their systems and protect transit workers and riders."⁷⁹ On September 25, 2024, FTA issued General Directive 24-1, "Required Actions Regarding Assaults on Transit Workers," which "required transit agencies subject to FTA's Public Transportation Agency Safety Plans (PTASP) regulation to conduct a safety risk assessment, identify safety risk mitigations or strategies and provide information to FTA via SMS [Safety Management System] Report on how they are assessing, mitigating and monitoring the safety risk associated with assaults on transit workers."⁸⁰ On January 16, 2025, FTA published "Responses to General Directive 24-1," noting that "FTA's initial analysis of agency responses shows more than two-thirds of transit agencies determined that safety risk mitigations are necessary to reduce the risk of assaults on transit workers, and these agencies are working to roll out a variety of mitigation measures."⁸¹

Transit employee unions have expressed concern with attacks on public transportation workers. AFL-CIO's Transportation Trades Department, for example, generally supported General Directive 24-1 but noted that "our members are in serious need of physical barriers that fully enclose the operator's workstation, protecting them from unruly passengers…; and they must also provide for positive airflow, which better protects operators from exposure to viruses and other airborne pathogens." Thus, they recommend for "FTA to promulgate a rule requiring strong minimum safety standards for public transit vehicles."⁸² They also recommend allowing agencies in urbanized areas of 200,000 people or more to use federal funds for currently prohibited security costs, such as paying police officers. The ATU has recommended a new federal funding program to support "unarmed transit ambassadors and fare enforcement inspectors to interact with and engage transit workers, members of the public, and others for the purpose of establishing an official presence and deterring disruptive behavior within transit systems."⁸³ The ATU also recommends stronger monitoring and enforcement of PTASPs, partly by providing additional resources to FTA's Office of Transit Safety and Oversight.⁸⁴

Emergency Relief Program and Infrastructure Resilience

The Public Transportation ER program (49 U.S.C. §5324; 49 C.F.R. §602) provides federal funding on a reimbursement basis to states, territories, local government authorities, Indian Tribes, and public transportation agencies for damage to public transportation facilities or operations as a result of a natural disaster or other emergencies.⁸⁵ ER funding can also be used in some circumstances for public transportation resilience projects, that is to protect assets from future damage.

FTA's ER program does not have a permanent annual authorization; all funds are authorized on a "such sums as necessary" basis and require appropriations from the general fund. Because of this, FTA cannot provide funding immediately after a disaster or emergency is declared. Transit agencies, therefore, typically rely on the Federal Emergency Management Agency (FEMA) to fund immediate needs beyond the capacity of state and local governments. Transit agencies have an established relationship with FTA, so relying on FEMA could slow disaster responses. Confusion about agency responsibilities between FTA and FEMA could result if funds are later appropriated for the ER program. Adding a quick-release mechanism to FTA's ER program would allow FTA funds to be approved and distributed within a few days of a disaster. Such a program already exists for the Federal Highway Administration, with an annual authorization of funds from the HTF; one option would be for FTA's program to similarly be authorized an amount from the mass transit account of the fund. Such an authorization would place a new claim on resources of the mass transit account. For example, H.R. 7012/S. 3073 (118^th Congress) would have authorized $50 million in each of FY2024-FY2027 from the mass transit account for FTA's ER program.

FTA's ER program does not have a limit on the amount that can be spent on resilience projects (projects with the goal of making transit systems resilient to future natural disasters and other emergencies). Although this characteristic may allow for better projects, it can result in the appropriation of larger amounts than might otherwise be necessary for disaster relief and could be a way for transit agencies to fund betterments and new facilities that have little direct connection to the goals of repairs and resilience. A separate resilience program along with changes to the ER program may be more effective in protecting public transportation infrastructure from future disasters. For example, Section 11405 of the IIJA created a resilience program primarily for highway infrastructure, the Promoting Resilient Operations for Transformative, Efficient, and Cost-Saving Transportation (PROTECT) Program (23 U.S.C. §176).

To improve emergency preparation, Congress could provide FTA with the authority to require plans and procedures to protect public transportation assets and services. Currently, the Secretary of Transportation, and therefore FTA, has the authority to regulate the operations of transit agencies in the event of a national or regional emergency but not prior to such an event.⁸⁶ Congress could provide more funding for technical assistance to deal with transportation emergencies. This could involve, for example, authorizing funds from the HTF or providing appropriations for the Transportation Resilience and Adaptation Centers of Excellence (23 U.S.C. §520) authorized by the IIJA or providing funding to FTA specifically for providing technical assistance to transit agencies for the purpose of addressing emergencies.

Rural and Tribal Transit

Although most public transportation service is provided in large urban areas, there were over 1,200 transit agencies in rural areas in 2022, including 138 tribal transit providers. About 90% of rural transit agencies provided demand-response service, a transit mode that FTA defines as "comprised of passenger cars, vans or small buses operating in response to calls from passengers or their agents to the transit operator, who then dispatches a vehicle to pick up the passengers and transport them to their destinations"⁸⁷; fewer agencies operated other types of transit, including fixed route service (35%), commuter bus (4%), vanpool (1%), and ferry (1%). Rural transit agencies served 91 million trips in 2022, with about 2 million in tribal areas.⁸⁸ Rural and tribal transit agencies typically provide service in large geographic areas with low population density.

The overall funding level for the Rural Formula Program (49 U.S.C. §5311) is likely to be an issue in reauthorization. Another concern in the competitive programs, such as in the Bus and Bus Facilities Program and the Low-No program, is likely to be specific amounts of funding for rural and tribal transit agencies. Rural and tribal transit agencies have argued that their small size and few administrative staff put them at a disadvantage for competitive funding compared with large urban transit agencies. Advocates for these smaller transit agencies note that they often struggle with federal requirements and compliance reviews. One option proposed on behalf of CTAA is to exempt from FTA's requirements any transit agency receiving less than some threshold amount in federal financing assistance overall or in a specific discretionary grant. CTAA has proposed that these thresholds could be $100 million in federal financial assistance annually and $10 million in a grant of discretionary funding.⁸⁹

The maximum federal share of operating support is another specific concern of rural transit agencies. Unlike large transit agencies in urban areas of 200,000 people or more, transit agencies in small urban areas and rural areas can use federal funding for operating expenses.⁹⁰ Nevertheless, the maximum federal share of operating expenses is generally 50%, whereas with capital projects, the maximum federal share is generally 80%.⁹¹ To lessen the disadvantage of operating projects, advocates for rural transit agencies have called for equalizing capital and operating projects at a maximum federal share of 80%.⁹²

The IIJA authorized an average of nearly $46 million annually from the HTF for the Public Transportation on Indian Reservations Program, a 30% increase from prior law. Some 80% of this funding is to be distributed by formula and 20% competitively. Despite the increase in funding for tribal transportation, the IIJA does not fully address the long-standing transportation challenges on tribal lands. Another funding issue is the high cost of providing public transportation to people living on tribal lands, places with low population densities (even when compared with other rural areas) and rudimentary road systems. In 2019, prior to any disruptive effects of the COVID-19 pandemic, the mean operating expense per trip for tribal transit was $23, compared with $14 in all rural areas (in 2024 dollars).⁹³

The IIJA also provided funding for discretionary grant programs, and Tribes may compete against other public transportation providers for these funds. For example, the IIJA provided almost $400 million annually for discretionary bus and bus facilities grants and $1.1 billion annually for discretionary low or no emission bus grants. Although the IIJA created several new competitive grant funding opportunities, Tribes may face barriers in the application process. Some lack resources to apply for such grants generally, and some do not have adequate internet service to apply for such grants electronically. Another barrier to competitive grant funding for Tribes is the nonfederal matching share requirement. While Tribes do not need to provide any matching share in the use of federal formula funds, this is not always true for competitive programs, including for discretionary bus grants.

Private Contracting

Many public transportation agencies contract with private sector companies to provide transit service. According to FTA, in 2023, about 74% of modal operations were directly operated and 26% were contracted services.⁹⁴ According to some research, contracting-out service can be cost-effective in some situations, such as where public and private sector goals align.⁹⁵ Consequently, some have proposed ideas to increase the amount of service that is contracted out without running afoul of labor law (known as 13(c)).⁹⁶ For example, the North American Transit Alliance (NATA), an organization of six large private transit contracting firms, has argued that FTA should require transit agencies to consider contracting out annually; such decisions would be based on analyses required by FTA, and these analyses should be reviewed by FTA in the triennial review process. NATA has also argued that proposing to contract out service should be an evaluation factor in awarding discretionary capital grants, including CIG.⁹⁷ The ATU has argued against these proposals, noting such changes "would wreak havoc on transit agencies attempting to increase post-pandemic ridership and provide reliable service by upending their service models," among other problems.⁹⁸

Joint Development and Transit Oriented Development

Many stakeholders are interested in linkages between investments in public transportation and nearby commercial and residential facilities, including joint development and transit-oriented development (TOD). FTA distinguishes between the two types of development, noting "in joint development, the recipient [transit agency] is an active partner, contributing either property or funds for use in the joint development project. TOD has a broader, neighborhood scope and can encompass either several parcels of property or as much as an entire community."⁹⁹ FTA goes on to say that a federal funding recipient is a stakeholder in TOD but may not always be a partner.

Currently, law and regulation allow for federal support of both joint development and TOD in certain circumstances. Joint development is included in the definition of a capital project eligible for federal funding (49 U.S.C. §5302(4)(G)). TOD support includes the Pilot Program for Transit-Oriented Development Planning (TOD pilot program), the use of DOT loans programs for TOD projects, and the disposition of land acquired for transit purposes to local government and nonprofit housing agencies.¹⁰⁰

To spur TOD, some have proposed greater coordination between DOT and the Department of Housing and Urban Development. For example, the Thriving Communities Act of 2024 (H.R. 8486, 118^th Congress) would have provided funding for technical assistance to communities for TOD and required a report on "the level of coordination between the Secretary of Transportation and the Secretary of Housing and Urban Development in carrying out such program." Another bill, the Build More Housing Near Transit Act of 2023 (H.R. 6199/S. 3216, 118^th Congress), would have made changes to CIG to incentivize "pro-housing" policies in the evaluation of projects for CIG funding.

Others have suggested modifying DOT's loan programs to make them more useful for housing development. For example, the Equitable Transit Oriented Development Support Act (H.R. 4857, 118^th Congress) would have authorized using a Transportation Infrastructure Finance and Innovation Act (TIFIA) loan to capitalize a financial account of a community development financial institution that could be used to make loans to sponsors of TOD projects.¹⁰¹ In contrast, others have proposed modifying DOT loan programs to make TOD projects impermissible, preserving lending authority for other types of projects. For example, the NO TOD Act (H.R. 4131, 118^th Congress) would have removed the eligibility in DOT loan programs for TOD projects and abolished the TOD pilot program.

Policy Preference for Families with Young Children

In a series of executive orders and other actions, President Trump announced changes in policies related to the distribution of grants. In implementing some of these changes, Secretary of Transportation Sean Duffy sent a memo to the heads of DOT administrations and offices in January 2025 canceling departmental orders related to "climate change, 'greenhouse gas' emissions, racial equity, gender identity, 'diversity, equity, and inclusion' goals, environmental justice, or the Justice 40 Initiative."¹⁰²

Subsequently, the Secretary signed a departmental order entitled "Ensuring Reliance Upon Sound Economic Analysis in Department of Transportation Policies, Programs, and Activities" (DOT Order 2100.7).¹⁰³ Several parts of the order refer to maximizing the benefits and minimizing the adverse consequences of federal transportation policies toward "families," "families with young children," and "communities with marriage and birth rates higher than the national average."

For instance, DOT Order 2100.7 states

to the extent practicable, relevant, appropriate, and consistent with law, mitigate the unique impacts of DOT programs, policies, and activities on families and family-specific difficulties, such as the accessibility of transportation to families with young children, and give preference to communities with marriage and birth rates higher than the national average (including in administering the Federal Transit Administration's Capital Investment Grant program).

It is unclear how this policy preference for families with young children is to be implemented by FTA. About two-thirds of public transportation funding is distributed by formula. These funds are programmed by recipients within the limits of federal eligibility requirements. Furthermore, the projects that apply for federal funding from CIG are evaluated according to statutory factors, including local financial commitment, mobility improvements, environmental benefits, congestion relief, economic development, policies and land use patterns, and cost-effectiveness as measured by cost per rider (49 U.S.C. §§5309(d)(2), (e)(2), and (h)(4)(5)).

From issuance of DOT Order 2100.7 in January 2025 through July 2025, FTA had issued one NOFO, for FY2025 funding from the Low-No program and the Grants for Buses and Bus Facilities Competitive Program. Among other evaluation factors, FTA stated that to receive credit in an application for the family policy preference, the recipient must "describe how the project will improve the accessibility of transportation to families with young children, to include improved access to jobs, healthcare facilities, recreational activities, and commercial activity. Describe how the project will improve the quality of life, raise the standard of living, or enable fuller participation in the economy by families."¹⁰⁴

If Congress were to consider surface transportation reauthorization, it may choose to modify funding program language to include stronger preferences for families with young children. If Congress were to consider such an option, it might include in bill text a clear definition of families and families with young children, as well as requirements for what data to use and how to measure accessibility and other variables. Congress may also choose to leave the program statutes unchanged, with the possibility of future oversight of program administration that considers this policy preference. Given the uncertainties involved with pursing a policy preference for families with young children, options for Congress could include requiring a study of how the preference is being implemented and its effects, alternative implementation methods, and the data measurement and data requirements of the policy. Congress could also consider legislation that prevents a preference for families with small children over other types of families and high marriage and birth rate areas over other areas.

Footnotes