Red Line funding no sure thing for Indianapolis

Indianapolis mass transit advocates shouldn’t bank just yet on a $75 million federal grant for a bus rapid transit system that President Barack Obama has recommended in the 2017 budget, fiscal experts said.

The “small starts” grant to build the first leg of the Red Line relies, in part, on revenues from a tax on wholesale oil that House Republicans have declared “dead on arrival.” Without that funding source, the Red Line and 30 other projects are in danger of being passed over, said Stan Collender, a budget expert for Qorvis Communications in Washington, D.C.

“Nobody believes the oil tax will pass this year, so cities can’t count on these grants in their budgets,” Collender said. “It could happen, but I would give it less than a 50 percent chance.”

The grant would enable IndyGo, the city's bus agency, to kick-start the region's largest-ever mass transit project, a roughly $800 million system of all-electric buses that would run faster and more frequently than standard buses. The $75 million grant is for the first leg of the Red Line, a nearly 14-mile stretch from 66th Street in Broad Ripple to the University of Indianapolis on the south side.

The Red Line: What you need to know

The president is proposing $3.5 billion in grants from the Transportation Department's capital financing grant program, an increase of 61 percent over what Congress allocated last year. But that large increase assumes, to some degree, that a $10 tax on each barrel of oil would generate billions of dollars in revenue — amounting to $65 billion a year when phased in completely in five years. The proposed Transportation Department budget of $98 billion is $23 billion more than last year's.

Collender said a chance exists that Congress will not even fund transportation projects at last year’s level.

“The conservative Republicans are talking about spending decreases across the board,” he said.

The oil tax revenue was slated for clean energy projects like rail and bus rapid transit across the Transportation Department budget.

But a Transportation Department spokeswoman said it was difficult to delineate now how much the capital project grants would depend on the oil tax.

Congress is required to pass the budget by Oct. 1.

Paul Bledsoe, an independent energy consultant who has worked for the U.S. Senate Finance Committee, said “the overall pool of projects will be much smaller because the pool of money is going to be much smaller” than what the president proposed.

Bledsoe said without the prospect of the oil tax Obama would not have proposed many of the projects.

“The president was saying look at what could get done if we had the funding,” Bledsoe said. “He was providing a wish list.”

Stephen Ellis, vice president of Taxpayers for Common Sense, said thinking big is not as far-fetched as it might seem. Congressional representatives, after all, like bringing big projects back to their districts.

“It’s relatively fanciful,” Ellis said. “But to get the money down on paper is a good way to tempt Congress,” he said. “Some of these projects could migrate into the base budget.”

Opposition to Red Line Bus Rapid Transit route accelerates

The give-and-take on federal appropriations illustrates one element of the grueling and time-consuming process that large public works projects like the Red Line must endure. Indianapolis planners have worked for more than a decade to improve mass transit in the Central Indiana. They considered rail and light rail before settling on bus rapid transit, a kind of hybrid that shares elements of rail service but costs far less to implement.

On their third try in the General Assembly, advocates secured a bill in 2014 that authorizes income tax hikes to pay to operate a bus rapid transit system. But completion of the entire system still needs continued federal funding and voter approval through referendums in at least three counties, including Marion. Called Indy Connect, the entire system would feature the Red Line and three other routes. An earlier plan featured five routes overall.

Congress will look through the grant programs and allocate a lump sum of money. It could make a recommendation on which projects should be funded, but otherwise it is up to the Transportation Department to determine.

The questions now: Does the Red Line funding have a higher priority than other projects, and what are its chances of being preserved?

The Transportation Department couldn't say how Indianapolis stands compared with other cities in line for funding, but James Corless, director of Transportation for America, said the Red Line was “really in a good position."

He said that although the oil revenues were to pay for clean energy initiatives, the "small starts" program is, to a degree, inoculated from the budget knife.

“The program is something that gets funded every year by Republican and Democratic congresses, and it is really popular,” Corless said. “To get funded the projects have to be far along in the planning, so it is not some speculative thing.”

Corless said being named as a grant recipient is an important step, placing Indianapolis ahead of many other cities that are also seeking funding.

But he said nothing is guaranteed when Congress holds the key to the bank.

“This being election year with an outgoing president, it doesn’t mean you will get all the money," said Corless, whose organization is an alliance of city and town officials, businesses and civic groups that lobbies for transit improvements. "You might get some of it, but eventually you’ll get all of it.”

Rob Healy, vice president for the American Passenger Transportation Association, noted that even without the oil tax, Congress last year authorized $2.2 million for 2017 in the Transportation Department's capital finance grant program.

"There is a discrepancy (in the president's budget and what Congress is likely to approve), but the grants are not fully contingent on the oil taxes," Healy said.

He said Indianapolis was in a good position because the project "is more modest than some of these mega-proposals and might be looked on more favorably."

He added that if Indianapolis were not funded next year it would be first in line to get the grant in 2018.

Sen. Dan Coats of Indiana was critical of the president's overall budget at a Senate Finance Committee last week, criticizing Treasury Secretary Jacob Lew for submitting a budget that he contends spends too much.

"You guys are spending on stuff we no longer accept," Coats said. "We can't go on with this shell game."

When IndyStar asked Coats' office in an e-mail if the senator supported the Red Line, his press secretary wrote back that  "Senator Coats believes that Indiana deserves its fair share of federal funding and hopes that all Hoosier funding requests will receive full and fair consideration.”

U.S. Rep. Andre Carson, D-Ind., a member of the House Transportation Committee, said he would send a formal request to the Appropriations Committee to approve the Red Line funding.

“Proposals like the bus rapid transit project transform communities, improve mobility and access to jobs, education and other important opportunities for millions of people,” Carson said in a written statement. “Public transit is an important tool in the effort to ensure that hard-working Hoosiers are offered a chance to succeed.”

Call IndyStar reporter John Tuohy at (317) 444-6418. Follow on Twitter: @john_tuohy.

Cities in line

Indianapolis was one of 31 cities that are in line for federal funding for bus rapid transit (BRT), light rail or trolley projects. Here are some of the other cities that would get BRT construction funding under President Obama's budget proposal:

Columbus, Ohio

The Central Ohio Transit Authority plans a 15.8-mile BRT line connecting downtown with the OhioHealth Medical Center in Westerville along Cleveland Avenue. The route would have 32 stations, traffic signal priority and would cost $46.8 million with a $37.5 million federal grant

Chicago

The Chicago Transit Authority wants to make a 5.4-mile section of Ashland Avenue a BRT route. The project includes 14 bus stops on median stations, a dedicated center lane and the purchase of 50 specialized buses. The estimated cost is $116.9 million, with a $58.3 million grant.

Jacksonville, Fla.

The Jacksonville Transportation Authority proposes a 12.9-mile BRT line from the Convention Center downtown to Orange Park Mall in Clayton County. The route would have 13 new stations and traffic signal priority at 24 intersections. The cost is $19 million, with a $9.5 million grant.

Albuquerque, N.M.

The BRT line would be 8.8 miles along historic Route 66 (Central Avenue) with 20 raised platform stations, dedicated bus lanes and signal priority. It would cost $126.2 million, with a $69 million grant.

Lansing, Mich.

The Capital Area Transportation Authority wants to build an 8.5-mile BRT line from the State Capitol downtown linking Michigan State University and downtown East Lansing to the Meridian Mall in Meridian Township. The route would  have 27 stations, 200 park-and-ride spaces and transit signal priority. The cost is $163.92 million, with a $75 million grant.