From Rob Fellows:
I've been thinking lately that the federal role in transit (in a rational world) would focus on the reliability of money, rather than just the quantity. There are things the federal government can do because of its scale and ability to borrow in hard times that local and state governments can't do as well.
For example, I used to work at King County Metro Transit in Seattle. Over the past decade, Metro has been beset by economic ups and downs, worsened by reliance on sales tax revenues among other things. Metro ha a large budget, but whenever the economy hiccups, waves of service and staff reductions are needed, and urgent calls for new revenues are raised. Voters have approved new funding, but then the next economic hiccup makes the promised new services unaffordable. All of this could be avoided if federal funding was aimed in part at filling in the funding valleys during recessions. That would allow local agencies to raise new funds and be credible that the benefits would be sustainable.
Or another example on the capital side: One of the biggest costs facing many agencies is the cost to borrow money for capital projects -- generally doubling the cost of big projects since finance costs often exceed the raw cost of the project. If the federal share of capital projects could be delivered on a schedule that meets cash flow needs for those projects, borrowing costs could be reduced dramatically, for sometimes dramatic cost savings. The scale of the federal program ought to give FTA more flexibility to fill those cash flow gaps than state or local governments can.
I agree that federal funding now is inscrutable; I just wish it could be refocused on those areas where the scale of the federal program could add the greatest value and reduce local costs.