More Transit Funding Needed, Fitch Ratings Warns
Economy could suffer if governments don't recognize decline in driving and other trends that favor transit.
One of the world’s leading financial analysts, Fitch Ratings, is warning that if America doesn’t change how it invests in transit, the whole economy could suffer.
“Public transportation investment strategies will need to transform if trends toward increased multifamily housing, declines in driving, and increasing public transportation usage continue over the long run,” Fitch said.
In an article published March 12, Fitch says there are signs of a major shakeup in U.S. transportation. The ratings group points to trends away from driving among millennials and an uptick in transit use. Fitch also cites record-breaking levels of multi-family housing construction, which represented almost one-third of new housing starts last year.
In our view, the transportation needs of the next 50 years will be markedly different from those of the past 50 years. U.S. policymakers must begin adapting their current decisions to these future needs. If these trends persist and meaningful policy changes are not made, the risk to the public transportation system would have negative implications for the entire economy.
That’s a strong warning from one of the big three global ratings agencies. It comes as Congress hems and haws about how to fund the next transportation bill, and transit agencies are just beginning to recover from the painful cuts they had to make during the recession, when demand skyrocketed and resources plummeted.
Saying, “the market has limited appetite for project risk when repayment is in question,” Fitch acknowledges the truth that roads don’t pay for themselves. While the group defends the need to support the interstate system by any means necessary, it admits that “in some cases stability will require the public subsidies that are common in many other developed countries.”
How Is Wisconsin Handling Transit?
Gov. Scott Walker campaigned on, and successfully killed an $800 million high speed rail connection, which would have linked Chicago to Madison, via Milwaukee, and one day could have connected to Minneapolis.
Walker’s 2011-13 budget included a cut to state transit aid of $9.6 million a year, which comes out to a $6.8 million a year cut for the Milwaukee County Transit System.
In this same budget the Kenosha-Racine-Milwaukee (KRM) commuter rail project was killed by Republican legislators with a budget item that dissolved the Southeastern Regional Transit Authority.
In the latest budget a motion pushed by Rep. Dale Kooyenga shifted the cost of utility relocation from the utilities that operate, essentially rent free, in the public right-of-way, to taxpayers of the City of Milwaukee for the streetcar project, thus overturning 100 years of precedent.
All of this comes at time when as Dave Schlabowske, the Bike Czar, reported: “According to Transportation in Transition, by U.S. Public Inerest Research Group, the Milwaukee and Madison urbanized areas saw the second and third largest drops in per-capita Vehicle Miles Traveled (VMT) in the nation: down 21 percent and 18 percent respectively.”
Story by Angie Schmitt with additional contributions from Urban Milwaukee. A version of this story originally ran on Streetsblog. Angie Schmitt is a newspaper reporter-turned planner/advocate who manages the Streetsblog Network from glamorous Cleveland, Ohio. She also writes about urban issues particular to the industrial Midwest at Rustwire.com.