Yesterday, US Transportation Secretary Ray LaHood proposed new guidelines that would make it easier for worthwhile new public transit projects to receive federal funding. Back in 2005, the Bush administration issued budget restrictions requiring that decisions about funding under the Federal Transit Administration’s New Starts and Small Starts programs be made based on narrow criteria of shortened commute times.

Under LaHood’s new plan, the FTA will immediately rescind those restrictions and instead base funding guidelines for new transit projects on a broader range of criteria, including economic development opportunities and environmental benefits, in addition to cost and time savings.

The Washington Post’s Ashley Halsey III reports on the change, and gets a reaction from one smart-growth advocate who explains why it’s an important shift, but not enough to fix our problems:

“It’s a dramatic and welcome change,” said Stewart Schwartz, executive director of the Coalition for Smarter Growth. “This change will ensure that priority is given to designing mixed-use walkable communities.” …

Schwartz said federal officials also should “level the playing field” in funding highway and mass transit projects.

“The public may not know it, but for road projects, the federal government pays 80 percent, and the state pays 20 percent,” he said. “On mass transit, it’s 50-50.”

This uneven funding formula means that when state governments try to tackle congestion, they find building new highways to financially easier than adding new public-transit capacity. If a $100 million highway proposal is competing against a $100 million transit proposal, the costs to the state will be $50 million and $80 million, respectively. This creates a bias towards building new roads rather than new transit lines, even though the transit lines may be better for the region’s long-term development and environmental health.

Halsey covers the DC-area angle, noting that the new guidelines will improve the chances of the K Street Busway project, which will create high-speed bus corridors on one of DC’s most congested streets, and Maryland’s Purple Line, which will use light rail to connect existing Metro stations that currently lack good connectivity. As a DC resident, I’d love to see these projects get funded; personally, I’ve given up on taking buses on K Street during rush hour, after a couple of rides in which I concluded that it would’ve been faster to walk, but would happily take them again if they ran in a high-speed, bus-only lane.

It’s important to understand, though, that this additional funding is only for new transit projects and won’t help close yawning operational budget gaps that may transit systems are now experiencing. The Washington Metropolitan Area Transit Authority is facing a $40 million budget gap for the current fiscal year, and a $175 million shortfall for the next fiscal year. Proposals for addressing the shortfall include fare increases, reducing service hours, and increasing the intervals between train and bus arrivals – which are likely to lead to further drops in ridership and harm efforts to attract new riders to the system. (Readers who use the Metro system are encouraged to attend a public meeting about proposed service cuts and fare increases on January 27th at 5:30pm, and/or sign up to testify or submit comments ahead of time.)

The DC area has actually done relatively well during the recession; other metro areas are facing even larger budget shortfalls and looking at even more severe service cuts.

So, while FTA’s new proposal for funding guidelines for new projects is welcome and necessary, the federal government also needs to level the playing field for new transit projects and provide more funding to help existing transit systems survive.