To date, most U.S. BRT and rapid bus capital projects have been built through federal grants combined with state and local matching funds. A few cities have used state and local funding exclusively, or a very small level of federal funding. Private financing for BRT is not yet common, but may offer cities an innovative alternative to the traditional government grant process.
This "Funding BRT" section briefly reviews potential BRT funding sources and provides examples of projects that have used these sources.
(Last updated: September 2007)
New Starts
Small Starts
FY'08 Funding Updates
Other Federal Funding Options
State and Local Funding
Private Funding
The biggest federal funding source for major new "fixed guideway" transit projects is the Federal Transit Administration's New Starts program. New Starts is part of the FTA's Section 5309 Capital Investment Program, which also funds bus purchases, bus facilities, and rail system modernization.
Rail, bus rapid transit, streetcar, people movers and automated guideway projects can compete for New Starts grants (often called Sect. 5309 funding). To be eligible, a project must be a fixed guideway system, which FTA defines as one which "utilizes and occupies a separate right-of-way, or rail line, for the exclusive use of mass transportation and other high occupancy vehicles, or uses a fixed cantenary system and a right-of-way usable by other forms of transportation."
New Starts and BRT
In the last ten years, the New Starts program has allocated well over $10 billion for new transit construction. The vast majority have been rail projects. Principally, this is because BRT is still relatively new to the U.S. Until recently, few cities considered building BRT. Also, demand for New Starts has significantly outstripped available funds, and much of the annual appropriations are committed to existing grantees, further limiting funding available for new BRT projects.
Another issue has been the fixed guidway requirement, which can exclude high-performing BRT projects that operate on arterial roadways instead of a separate right-of-way. To address this problem, in 2003, FTA proposed that Congress expand eligibility to include corridor-based service not on a fixed guideway. Congress did not make this change. Instead, they created the Small Starts program to fund low-cost projects like BRT. However, Small Starts funding levels are low. See here for more on Small Starts.
Phase III of the Silver Line project, which will connect the first two lines, is in the FTA funding pipeline.
Despite these challenges, the number of BRT projects receiving New Starts funding is growing. Since 2001, six BRT projects have been built with New Starts funding, and three more are close to securing grants. Another four are set to receive Small Starts funding. Prior to 2001, only four BRT or busway projects were built with through New Starts.
Now, for the first time, there are more BRT projects than either light rail, commuter rail or heavy rail projects in the New Starts pipeline. According to a July 2007 General Accounting Office (GAO) analysis, about one-third of the 19 projects in the New Starts pipeline for FY'08 are BRT or rapid bus. (Projects in the New Starts pipeline are in the preliminary or final design stages of development, or are Small Starts projects approved into the single “project development” phase.) For more on FY'08 funding, see here.
Applying for Funding
Until recently, projects could apply for up to 80% of total project construction costs. Because of the high demand for New Starts funding, FTA now strongly discourages requests for more 50% of the project budget. FTA's current cost effectiveness criterion makes it extremely difficult to achieve a high rating with requests for more than 50% funding. (By contrast, Small Starts will provide up to 80% of project costs.)
New Starts has a lengthy and rigorous funding process. A project must conduct an alternatives analysis, preliminary engineering and final design studies to be considered for New Starts funding. Ultimately, to win an award, the project must be recommended in FTA's annual New Starts report to Congress. The actual New Starts budget is determined by Congress during its yearly appropriations process. FTA judges proposed projects on whether they are cost effective, improve mobility, and offer land use planning that supports transit.
In recent years, FTA has been revising its New Starts application and evaluation procedures in an effort to streamline and shorten the process. Visit the the FTA website for the latest policy and procedure changes and guidance documents.
BRT Projects Funded
New Starts has funded the following BRT, busway and rapid bus projects:
$ 330 million
$ 82.2 million
$ 13.3 million
$ 500 million
$ 2.3 million
$ 10.5 million
$ 107 million
$ 34 million
$ 618 million
$ 168 million
$ 37 million
Not available
$ 30.7 million
$ 21 million
$ 268 million
$ 68 million
Boston's Silver Line Phase II (Waterfront)
Cleveland Silver Line (Euclid Corridor)
Eugene EmX, Franklin Corridor
Houston Regional Bus Plan
Kansas City MAX
Orlando LYMMO
Pitttsburgh West Busway
Pittsburgh East Busway Extension