Highway Funding Subsidizing Transit Operations?

White House proposes that highway construction funding be used to pay bus drivers, train operators, and other transit operational expenses.

The White House recently released its 2024 Budget Plan and is seeking to allow transit dollars to be used for operating expenses – wages for bus drivers, transit operators etc. – in addition to the already allowed capital construction eligibilities. But the Biden administration doesn’t stop there.

The budget goes on to “encourage States to support their transit systems by transferring available Federal-Aid Highway funding for transit operating needs.” That means the Administration proposes to allow money dedicated for road and bridge construction to pay bus drivers, Amtrak workers and other operational expenses. This comes as the White House also acknowledges the backlog of projects to repair roads and bridges nationwide.

This is yet another policy that was already debated, and ultimately rejected, by Congress that the Administration has revived. AGC did not support this policy when Congress first debated it nearly two years ago.

The Budget does acknowledge that “transit systems face an uncertain future as ridership and fare revenue have not fully rebounded from the COVID-19 pandemic, given significant shifts in work and commuting patterns.” At the same time, while fare revenues have not recovered from COVID-19, it is worth noting that cities like Washington D.C. and New York are looking to provide free bus services to residents. AGC opposes the use of construction funding to be used for non-construction purposes.

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