COVID Aid Is Slowing Regular Mass Transit Spending

COVID Aid Is Slowing Regular Mass Transit Spending

November 19, 2021  | Jeff Davis

A look at recent issues of the Monthly Treasury Statement shows that the huge influx of COVID-related aid to mass transit providers has “crowded out” regular federal mass transit spending by about $3 billion since the start of the pandemic, with more spending slowdowns to come.

The three COVID relief bills together provided over $69 billion in emergency aid from the general fund of the Treasury for transit providers. At the same time, the regular mass transit formula grants program (funded out of the Highway Trust Fund) was still going as usual, providing around $10 billion per year, mostly via formula-based aid to transit providers.

The MTS only shows large budget accounts, and as such, it links every general fund FTA account (except Capital Investment Grants” together in an “other” category. This includes the Administrative Expenses, Technical Assistance and Training, and WMATA Grants accounts (which combine to around $300 million per year), the annual post-2018 general fund supplements for mass transit formula grants ($500 million to $700 million per year), slow-spending Hurricane Sandy aid, and all the COVID aid.

Here are the monthly outlays (in millions of dollars) to liquidate obligations for all those accounts – $1.2 billion in pre-COVID calendar year 2019, $16.3 billion in 2020, and $12.1 billion so far in the first ten months of calendar year 2020.

Outlays from Transit “Other” Accounts (Admin, Research & Training, ER, WMATA, GF supplement, COVID Aid)
1st 10 mo
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 12-mo CY of CY
2019 80 103 75 74 111 69 103 79 94 88 147 141 1,164 876
2020 86 148 133 111 3,339 2,423 2,769 2,031 1,874 1,178 946 1,237 16,275 14,092
2021 1,090 775 883 1,327 1,045 1,033 1,095 1,476 2,416 912 12,052

Now, let’s look at the monthly outlays over the same period from the Transit Formula Grants account (the only Highway Trust Fund account at FTA).

Outlays from Transit Formula Grants account (Highway Trust Fund)
1st 10 mo
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 12-mo CY of CY
2019 716 941 629 618 744 1,245 885 1,007 1,668 689 834 851 10,827 9,142
2020 843 693 726 874 610 995 966 624 1,227 457 556 841 9,412 8,015
2021 493 668 682 598 564 892 457 647 1,105 441 6,547

Trust Fund outlays for mass transit were $1.4 billion lower in calendar 2020 than in calendar 2019, and for the first ten months of 2021, outlays are another $1.5 billion below the levels of 2020. If 2019 was supposed to be the normal benchmark, 2022 outlays are running $2.6 billion below 2019, with two months to go.

There is still at least $40 billion in COVID aid to transit agencies that has not yet been liquidated via outlays, suggesting that this crowding out, or “substitution effect,” is not a short-term phenomenon.

This raises the question of just how quickly transit agencies will be able to put the 34 percent increase in transit formula apportionments for fiscal 2022 authorized by the bipartisan infrastructure law, set to arrive in two or three months (after the annual DOT appropriations bill is enacted), to use.

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