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CARES Act Provides Support for Texas Transit Agencies

09.29.2020

DURATION 4 minute read

Transit agencies provide services that keep Texas moving. From maintaining operation of our public transportation system to improving the system’s efficiency and user experience, it’s hard to go a day without benefiting from the work of a transit agency. Their resources are essential and cannot be disrupted – even during a global pandemic.

Stay-at-home orders and economic shutdowns created a grim financial situation beyond the control of transit agencies – leaving many of them in need of financial assistance. However, earlier this year, Congress passed the Coronavirus Aid, Relief and Economic Security (CARES) Act that allocated more than $20 billion to transit agencies across the United States.

I recently sat down with Jim Webb, CEO of the Goodman Corporation, who offered insight into how Texas transit agencies have weathered the COVID-19 pandemic and how they can take advantage of the CARES Act to continue providing for the community with access to meaningful public transportation.

 

The Economic Effects of COVID-19

Every municipality has weathered the coronavirus economic fallout differently.  Cities can have vastly different financial models, with different funding vulnerabilities associated with COVID-19 revenue shortfalls.  This is necessitating cities to recalibrate how they address funding needs associated with operational, maintenance and capital improvement needs.

Sales tax revenues and ridership revenue are a key driver for maintaining a community’s public transit and other infrastructure resources. But when stay-at-home orders caused many stores and restaurants to close their doors and ridership to decline, these revenues took a major hit and impacted the operational budgets for many public agencies- including transit agencies.

“People who work on public infrastructure know sales tax revenue is critical to putting infrastructure in the ground,” Jim said.

Jim predicts operational improvements and maintenance projects will soon be feeling the impact of reduced revenue streams; while, big-budget projects tied to multi-year capital improvement programs or enterprise funds are being reevaluated – causing many agencies to look for other funding sources to minimize the economic impact.

“Many agencies are looking to the future to figure out how these factors will impact their bond-funded projects to ensure they still deliver for the community,” Jim said.

 

Support Offered by the CARES Act

From keeping people paid to maintaining community resources, the CARES Act provided support to business and local agencies impacted by COVID-19. The act allocated $25 billion to the Federal Transit Administration – $22.7 billion for urbanized areas and $2.2 billion for rural areas.

The funding could not have come at a better time. Low ridership coupled with reduced sales tax revenues left many transit agencies trying to figure out how they can maintain vital transportation resources.

“The Federal Transit Administration has done a phenomenal job at getting these resources out and into the grant balances of Texas transit agencies,” Jim said.

Funding offered by the CARES Acts is provided at 100% federal share with no local match required and can be used to support capital, operations and expenses related to COVID-19.  The funds also came with pre-award authority – allowing costs incurred prior to the grant to be reimbursed by the federal funds.

Check out our podcast, Texas By Design if you would like to learn more about the transit support offered by the CARES Act. You can watch the episode on YouTube, or listen on all major podcast platforms.

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