FTA Funds Rural and Tribal Transit Programs Largely Through Formula Grants and Oversees and Provides Assistance to Grantees

		For Most Selected Providers, FTA’s Rural Transit Program is a Key Source of Funding

The rural transit program is FTA’s only dedicated funding program for  rural and tribal transit. Enacted in 2012, MAP-21 increased funding for the rural transit program,  from about $500 million to about $600 million annually, made planning  activities an eligible activity for the first time, and added low income  population as a factor in the formula that allocates grant funds to states. MAP-21 also doubled the funding level for the Tribal Transit Program  from about $15 million to about $30 million annually. Officials frequently indicated that without rural transit  program funds, transit service in their area would be reduced or, in some  cases, eliminated. Officials in two states  indicated that the consolidation should provide greater flexibility in  service provision and reduce the number of federal grants they  administer.New York explained that the consolidation could leave some rural  transportation programs that provided service to low income people  funded with JARC grants, without a federal funding source in the rural  transit program because these programs do not offer transit services  to the general public, as required by the rural transit program. Additionally, in fiscal  year 2013, FTA also awarded discretionary grants totaling $5  million. Additionally, FTA conducts formal  reviews on specific areas, such as procurement systems. Because tribes  can be either direct grantees of FTA or sub-grantees of the states, or  both, some tribes report directly to FTA while other tribes report their data  through their state transportation agency. According to nearly all state transportation  agency officials and tribal transit officials we spoke with, FTA training has  been helpful. Since 2009, Rural and Tribal Transit Providers’ Services Have Remained Generally the Same and Have Experienced Increased Ridership and Costs

		Rural and Tribal Transit Providers Continue to Provide a Range of Transportation Services for Transit Dependent Groups

From 2009 through 2012, to meet the transportation needs of their  communities, rural and tribal transit providers offered similar types of  services based on their passenger demographics, population density, and  budget, among other factors. This official also said that fixed route trips  accounted for the bulk of the system’s ridership. Nationally, according to data from the rural NTD, ridership increased  about 4 percent from 2009 through 2012. Selected Providers Face Operational and Funding Challenges and Tribal Transit Funding Changes Have Created Some Uncertainty

		Providers Identified Operational and Funding Challenges and Suggested Solutions

In providing transit services in rural and tribal areas, rural and tribal transit  providers face an array of challenges. While these challenges were  consistently identified in our interviews, the results of our interviews are  not generalizable to all rural and tribal transit providers. Several providers indicated that the match requirement helped  encourage local investments in transit, but noted that it was still  difficult to secure local funds. The Consequences of Different Funding Levels under MAP-21 for Tribal Transit Program Grantees Are Unclear, but May Include Some Disruptions in Transit Services

The Tribal Transit Program was changed to a largely formula-based  allocation of funds, and FTA expected this change to increase the stability  and reliability of funding for tribal transit providers and thereby to provide  better support for public transportation in tribal areas, the goal of the  program. We  analyzed FTA discretionary grant awards from fiscal year 2009 through  2012 and formula grant awards in fiscal year 2013 and 2014. Two tribes  received increases of over 1,000 percent.award reductions of 50 percent or more in average annual funding  compared with what they had received previously in discretionary awards. According to FTA officials, tribal transit systems that received increased  grant awards generally tended to be larger tribal transit systems, while  those that received decreased grant awards generally were smaller tribal  transit systems. In fiscal year 2014, it was awarded  approximately $1.2 million by formula. Agency Comments

We provided a draft of this report to the Secretary of Transportation for  review and comment. The Department of Transportation did not have any  comments on the report. 3. To identify the challenges that rural transit providers face and any actions  that could address these challenges, we reviewed relevant academic  literature pertaining to rural and tribal transit in the U.S. and interviewed  two national stakeholder groups—the Community Transportation  Association of America (CTAA) and the American Association of State  Highway and Transportation Officials (AASHTO)—that, respectively, work  closely with rural and transit providers and state transportation agencies.
Why GAO Did This Study

Public transportation in rural areas can be critical to connecting people to jobs, shopping, and health services. FTA awarded approximately $600 million in grants in both fiscal year 2013 and 2014 to support rural transit, including tribal transit. The current surface transportation authorization, enacted in 2012, increased funding for tribal transit from about $15 to $30 million per year and changed how these funds are allocated.
The committee asked GAO to review FTA's rural transit program. This report examines (1) FTA's funding, oversight, and other support for the rural transit program; (2) changes in services, ridership, and costs since 2009; and (3) challenges that rural and tribal transit providers face and possible actions to address them. To address these topics, GAO reviewed program documentation and conducted about 50 interviews with FTA officials, national groups that have a relationship with rural transit providers, state transportation officials, and officials from rural and tribal transit providers. GAO selected state officials and providers based on grant amounts, the types of services offered, the size of transit systems, and geography, among other factors. Results are not generalizable to all states and providers. Additionally, GAO analyzed FTA data on transit services, ridership, and costs from 2009 through 2012, the latest year data were available. This report contains no recommendations. GAO provided a draft of this report to the Secretary of Transportation for review and comment. The Department of Transportation did not have any comments on the report.

What GAO Found

The Federal Transit Administration's (FTA) Formula Grants for Rural Areas Program (rural transit program) is FTA's only dedicated grant program for rural and tribal transit. FTA apportions nearly all program funds to states. State transportation agencies then allocate funding to rural and tribal transit providers as sub-grantees. The remainder of program funds—$30 million annually—supports the Tribal Transit Program through direct apportionments to tribes based on a new statutory formula ($25 million) used for the first time in fiscal year 2013, or through discretionary grants ($5 million). Twenty-two of the 30 selected rural and tribal transit providers GAO spoke with indicated that rural transit program funds are essential to sustaining transit in their communities, noting that without these funds, transit service in their area would be reduced or, in some cases, eliminated. FTA's oversight activities focus on state transportation agencies that oversee providers. FTA also offers support to providers, such as for training on safety, and providers generally agreed that this support is useful.
From 2009 through 2012, the types of services offered by rural and tribal transit providers have remained about the same. Demand-response service, in which riders call in advance to schedule their trips, and fixed- or deviated-fixed-route service, in which a bus will deviate from an established route, are most typical in rural areas (see fig.). In this period, ridership increased 4 percent, and operating costs increased 19 percent, according to FTA national data.
Selected rural and tribal transit providers identified an array of operational and funding challenges. For example, 24 of the 30 providers GAO interviewed said that it was difficult to hire and retain qualified drivers, and 16 said that it was hard to secure local or state funds to meet the rural transit program's funding-match requirements. Some providers GAO interviewed addressed these respective challenges by offering training and through dedicated local tax funding. GAO also found that the new Tribal Transit Program's statutory formula—which emphasizes miles driven in providing transit services—resulted in some tribes receiving grant amounts that varied significantly from previous levels, with increases and decreases of 50 percent or more common. According to FTA officials, larger tribal transit systems tended to receive increased awards, while smaller systems tended to receive reduced awards. FTA officials also indicated they anticipated that when implementing the formula for the first time that it would result in very different funding levels for some tribal transit providers. Accordingly, FTA conducted outreach and meetings with providers to educate them about these likely changes. Selected tribal transit providers and FTA have considered strategies to mitigate declines in Tribal Transit Program funding and are still in the process of adjusting to new funding levels.