Metro Magazine

FACT 2014

Magazine serving the bus and rail transit & motorcoach operations since 1904

Issue link: https://metromag.epubxp.com/i/420063

Contents of this Issue

Navigation

Page 121 of 123

118 < m ETRO m AGAZINE FACT BOOK 2015 metro-magazine.com Market is based on available funding That's because of what the budgets that the public agencies have been proposing to their boards this year, which of course is dependent on available funding passed by Congress, state and local governments, and voters through referenda. Most of this is determined by the previous year's tax revenues and grant awards, but also by an ed- ucated guess at what these governments and the voters will decide later in the same year. This is due to the overlapping calendar cycles of the several levels of government will partly contribute to more than one budget year and grant money is spent out over several years. Market demand for the supply side is mainly a function of capital spending. The ex- ception is for the 13% or so of operating expenditures that is "purchased transporta- tion"— contracted services. About 29% of total spending in the industry is for capi- tal programs, and the federal government contributed 44% of that amount in 2012, the most recent year we have data available, according to the APTA Fact Book. States con- tributed 8.9%, and the rest was kicked in by local and regional sources. The 2012 capital spending level of $17.8 billion was only slightly above what the in- dustry spent in 2010, which itself was a drop from the peak spending of 2009 thanks to the Recovery Act passed in that year to help get the economy out of the Great Reces- sion. But, much of that simply filled in the holes in state and local budgets, when sales and property tax revenues nosedived across the country. State and local spending has now begun to recover as the economy has recovered, and more local referenda continue to pass at strong rates. All of this, though, is only getting us back to the level we saw in 2008 and 2009 at the market's peak. But if Con- gress passes a long-term authorization, we might see the 2008 record broken. Watch to see if, after the election, they can come together around a small tax reform bill, which both sides have wanted and which also might include something for the Highway Trust Fund and Mass Transit Account. If it does, it could provide the stability that busi- ness planners have long craved: predictable market demand. It could be better — but also worse But it also could be much worse — depending on the outcome of the election and the decisions that policy makers of both parties will have to make together. This is why many of the industry's supply side leaders are coming to D.C. in December. Their de- cisions will have consequences. You can get a pretty good handle on how the market for public transportation equipment, systems and services will look each year by looking at what each level of government has passed for public transpor- tation during the past two years. Tat's because the public transit agencies usually order their goods and services based on the grants they received in the past couple of years, which are assumed in the budgets they put together during each summer. And, going by these budgets, look for next year to be about the same size as it was in 2014. publisher's perspective 2015 market outlook remains the same, more or less Frank Di Giacomo, Publisher frank.digiacomo@ metro-magazine.com "Watch to see if, after the election, they can come together around a small tax reform bill, which both sides have wanted and which also might include something for the Highway Trust Fund and Mass Transit Account."

Articles in this issue

Links on this page

Archives of this issue

view archives of Metro Magazine - FACT 2014