Under the New Starts program, the Department of Transportation funds the construction or expansion of rail and other fixed-guideway systems--mass transit systems that use exclusive or controlled rights of way. A related program, Small Starts, makes discretionary grants to public transportation capital projects that cost less than $250 million and require less than $75 million in federal funding. For 2010, the Congress appropriated a total of $2 billion for both programs, of which $200 million was designated for Small Starts.
This option would eliminate both the New Starts and the Small Starts programs. The Congressional Budget Office estimates that this option would save about $6 billion over 5 years and $16 billion over 10 years.
One rationale for ending the programs is that the federal government should not be funding rail transit systems because their benefits are primarily local. A second rationale is that if the federal government is to support local public transit, there is no reason to focus on new rail transit systems, which tend to provide less value per dollar spent than bus systems do. Bus systems require much less capital and offer more flexibility in the adjustment of schedules and routes to meet changing demands. Even without New Starts, state and local governments could use federal aid distributed by formula grants (noncompetitive awards based on a formula) for new rail projects if they determined, on the basis of local circumstances, that those projects would make the best use of the funds. In 2010, for example, the federal government provided $8.4 billion in formula funding for transit projects, of which about $4.1 billion was allocated in broad "urbanized area" grants for existing and new systems, and $1.6 billion was designated for the maintenance and improvement of existing fixed- guideway systems. The remaining $2.7 billion was distributed among a variety of smaller grant programs.
One argument against this option is that the New Starts program seeks to identify the most promising rail transit projects from a long list of candidates. Many supporters of rail transit systems contend that rail transit will become increasingly valuable as gasoline prices continue their long-term upward trend. They also assert that building new roads does not alleviate urban congestion or pollution but leads only to greater decentralization and sprawl. New rail transit systems, by contrast, could help channel future commercial and residential development into corridors where public transportation is available, offering people convenient, affordable, and reliable transportation.