Rural bus funding on track to increase through 2020

WASHINGTON – If a proposed increase in federal funding for rural bus service remains intact, hundreds of thousands of rural residents and dozens of bus and motorcoach carriers will be quite pleased.

Currently the federal funding is budgeted to increase annually through fiscal year 2020.

“It is a hugely important program,” said Mark Szyperski of On Your Mark Transportation in Nashville. “It has been growing and more states are using it. I have not heard any rumblings about budget cuts.”

Szyperski is a consultant who assists local and state governments and private transportation companies in navigating the process to receive rural transportation grants from the Federal Transit Administration.

A key to the program’s future may be its popularity in areas that lean politically conservative and typically endorse government tax and spending cuts in general.

“The number one benefit is getting transportation service to rural areas where people have no other way to get to jobs and travel,” Szyperski said. “You would not believe the number of cities that I have been to where mayors and the chamber of commerce are so thankful for this opportunity. I once had a chamber director get teary-eyed when I told him bus service was coming.”

Stephen Abernathy, senior manager of intermodal alliances for Greyhound Lines, formerly was program manager for the intercity bus program at the Washington State Department of Transportation.

His office was the guinea pig for the first rural bus route funded under a new federal provision that allowed communities to cover the local grant match with in-kind services rather than dollars. That modification allowed use of the program to expand.

“In the last 10 years the program has grown across the country,” Abernathy said. “It has become embedded in a lot of communities.”

The fiscal year 2017 federal budget allocates $564.8 million in grants for rural bus service under Section 5311(f) of federal transportation law. The 5311(f) program was budgeted at $543.9 million in fiscal 2015 and $552.6 million in 2016.

Future budgets call for $577.7 million in 2018, $591.1 million in 2019 and $604.8 million in 2020.

Small towns that lost passenger rail transportation decades ago depended upon bus connections until recent years.

“Greyhound and the other intercity lines started cutting service where it wasn’t making sense for them,” said Michael E. Timlin, bus operations manager for the Colorado Department of Transportation. “In states that aren’t blessed with large populations, that took a lot of routes and services out. The intermountain states were affected the most negatively.”

Section 5311 was enacted in 1982 and has been largely unchanged through subsequent federal transportation acts. Fixed funding amounts are apportioned to states following a formula that considers land area and population of rural areas, revenue-vehicle miles and the low-income population.

The program funds 80 percent of eligible capital projects and 50 percent of necessary operating assistance. Eligible recipients are state or local government authorities, nonprofit organizations and operators of public transportation or intercity bus service.

“The regulations say the service has to go from a rural area to a meaningful connection with an intercity carrier,” Szyperski said. “They are not supposed to be commuter routes and cannot be advertised as commuter routes, but a lot of times the buses do run at commuter times. If they happen to do that, it is fine.”

Many 5311(f) routes connect with Burlington Trailways and Jefferson Lines, he said. “Most of the time it is Greyhound, which helps the system because of the national coverage.”

Burlington Trailways, based in West Burlington, Iowa, serves six Midwestern states. From its headquarters in Minneapolis, Jefferson Lines operates scheduled service stretching across 13 states from Montana to Wisconsin and Minnesota to Texas.        Greyhound buses stop at 3,800 destinations in 48 states and 10 Canadian provinces and territories.

Contraction of commercial bus service to rural areas increased in the 1990s.

“The Western states have been trying to refill those needs so people can get to regional centers to see their doctors, get to jobs and do their shopping,” Timlin said.

Colorado fields a fleet of MCI D4500 motorcoaches on three federally supported routes, branded as “Bustang,” that converge in Denver. One route travels west on Interstate 70 as far as Glenwood Springs. The others travel on Interstate 25 north to Loveland and Ft. Collins and south through Colorado Springs.

The buses are leased to Ace Express Coaches, the contractor that operates the service.

While making connections with intercity buses, Bustang serves other needs, Timlin said.

“It has been a lifesaver for a lot of people,” he said. “Colorado is blessed with a lot of transit agencies, but there was no way to connect them.”

“We connect population centers with job centers along the I-70 and I-25 corridors. A lot of people along the Front Range don’t want to deal with the traffic, which is getting worse. Surveys have found that the ridership on our north and south lines is predominately commuters with $75,000 to $150,000 annual incomes,” Timlin said.

“We have much more diversity on the west line. We have workers from the resorts who are paid in cash and use the cash to ride the bus. Some fairly rich people from Pitkin County ride Bustang to Denver for business. They own airplanes but would rather ride the bus.”

Bustang connects with light rail trains, operated by the Denver Regional Transportation District, that serve Denver International Airport every 20 minutes.

Last year Bustang carried 155,864 riders. Many potential riders are not yet “transit savvy,” Timlin said, but the comfort factor of the modern motorcoach will help attract them. “We have the comfortable seats, Wi-Fi, power plugs and USB plugs.”

FTA allows a portion of 5311(f) funds to be used for marketing.

The 5311(f) program permits carriers to initiate routes that could be too risky to attempt as unsubsidized business ventures, Szyperski said.

“It is tough to get them started. Ridership may be minimal to start with, which is why the grant exists,” he said. “Once they hit five to 10 people, the route starts paying for itself and then ridership starts bumping into the teens and 20s very quickly.”

A 5311(f) grant covers 50 percent of the losses a route incurs after ticket revenues. The remainder of operating costs must be covered with a local match.

“In many areas there was demand for bus service but they couldn’t raise enough money to meet the match requirements,” Abernathy said. “Now the federal program allows an in-kind match of any similar service that is provided without subsidy.”

A number of inter-city commercial carriers operate 5311(f) rural services through in-kind matches, he said, with Greyhound operating such routes in a dozen states.

The value of unsubsidized mileage traveled to a city by a private carrier, such as Greyhound, also may be counted as the in-kind match for a different route operated by another subsidized carrier serving that city.

Connections with larger carriers and bigger route systems enhance a regional line — or make them possible, Szyperski said.

“I have seen routes fail, usually because they try to do it on their own,” he said. “Either they don’t want to or don’t think about working with another carrier like Greyhound.”

Abernathy said it isn’t only the connections with carriers like Greyhound these smaller companies get with a 5311(f) grant.

“They are part of the NBTA (National Bus Traffic Association) so when passengers buy a ticket it can take them all over the country or all over the continent,” he said.

Abernathy organized the ribbon cutting for the first in-kind-match route launched in Washington State.

“Three passengers bought tickets,” he said. “The first two were an elderly couple who couldn’t drive anymore. They were making connections with Greyhound to visit their grandchildren for the holidays. The third passenger was an exchange student taking the bus on his way to the airport to fly home to Japan.

“That is what this program is all about. People can stay in their rural communities but have access to larger urban centers or travel around the world and come home. It is all about accessibility and mobility for rural people and rural economies.”

While 5311(f) grant dollars are allocated for all states, as of 2016 only 26 states were taking advantage of them.

“Hopefully they will see the light of day,” Szyperski said. “Under the last FAST (Fixing America’s Surface Transportation) Act, the states have to prove they have talked to intercity carriers and done some research to determine whether they have the need to use the funds. Every state needs to use them.”

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