Public Transit

The 1930's, 1940's, and 1950's

In the 1930s, with the Great Depression reducing the market for personal automobiles, General Motors Corp. made a push to convert all U.S. transit systems to rubber-tired diesel buses. This effort was supported by Congress, which, in 1935, passed the Public Utility Holding Company Act, requiring most power companies to divest themselves of public transit operations. General Motors purchased transit systems across the nation through its subsidiary, National City Lines. They quickly turned around and bought diesel buses from the parent company and discontinued rail service. The rails were abandoned, often paved over in the city streets, although many ended up being salvaged for their steel once World War II began.

After the war everyone's first goal was a house of their own. More and more far-flung subdivisions and even new suburbs were built, and because auto ownership was not keeping pace, transit ridership hit a peak. Transit systems in Iowa's ten largest cities carried 105 million riders in 1946. But it was not sustainable. As communities expanded, transit had difficulty meeting all the travel needs efficiently. General Motors was not reinvesting in the bus fleets it owned, it was gearing up to provide massive numbers of automobiles. Suddenly the population was turning to a second goal, which was owning a personal automobile to get around the sprawling communities. Through the 1950s and early 1960s, auto ownership surged and transit ridership plunged. By 1954 ridership for Iowa's top 10 cities was down to 42 million and still falling.

General Motors and other owners of local bus companies cut services and maintenance as ridership and revenues fell. This convinced even more people they could not rely on buses and needed a car. But there were those who, because of economic situation or age or infirmity, still needed public transit to get around.

The 1960's and 1970's

In 1964, Congress declared, "The welfare and vitality of urban areas, the satisfactory movement of people and goods within such areas, and the effectiveness of housing, urban renewal, highway, and other federally aided programs were being jeopardized by the deterioration or inadequate provision of mass transportation facilities and services." They responded by passing the Urban Mass Transportation Act of 1964. That act created the Urban Mass Transportation Administration (UMTA) within the U.S. Department of Housing and Urban Development and also provided a program of capital assistance grants to help local communities buy out the failing private companies and purchase new equipment.

In 1966, the federal UMTA was moved to the newly formed U.S. Department of Transportation.

Around the country and across Iowa, the private owners of the transit companies turned to government to bail them out, either through operating subsidies or through public buyout.

Many Iowa cities utilized these federal capital grants through UMTA to buy out their private transit operators and to begin public operation of the transit system in order to maintain the benefits of public transit in their communities. Through the 1970s, most Iowa communities acquired the local bus system and began public operation. Several communities initially formed semiautonomous "transit authorities" that had their own boards, but were still dependent on the city for funding. Over time, most of the single city transit authorities were pulled back into the structure of city government to be a city department.

The Arab oil embargo in 1972 gave major impetus to the move to public ownership of transit. It made the American public, and particularly policy-makers, realize that transit had value beyond just getting persons who cannot drive around town. America's enormous dependence on private automobiles had resulted in a dependence on foreign oil that gave other nations strategic leverage against the United States. Suddenly the nation's leaders saw that maintaining/rebuilding public transit could possibly reduce that dependence in some small way since, even if it did not greatly change what most people chose to do day-to-day, it would provide an alternative way of getting folks around if there was to be another cut-off of petroleum supplies.

The Federal Aid Highway Act of 1973 increased the federal share for transit capital grants for urbanized areas and for the first time allowed highway funds to be used for transit capital purchases. Section 147 of that Act created a rural public transportation demonstration program that assisted in the start-up of several rural transit programs in Iowa.

In 1974, the National Mass Transportation Assistance Act created a program of formula grants to urbanized areas (more than 50,000 population) that could be used for purchase of transit equipment or facilities or to assist in financing the operation of transit services. It also established a program of capital grants to support specialized transit services for elderly and handicapped persons.

In 1975, the Iowa General Assembly adopted Senate File 573, which authorized three pilot projects to demonstrate the benefits of consolidating and coordinating the provision of human services transportation funded under various federal programs under a single administrative agency.

In 1975, the newly formed Iowa DOT processed applications granting federal capital funding to 17 private, non-profit corporations to assist in the provision of specialized transportation for elderly or handicapped clients. These were mostly social service agencies seeking transportation for their own clientele.

In 1976, the Iowa DOT issued its "TransPlan 76" that advocated the establishment of regional transit systems, which would provide services to all parts of the state.

Also in 1976, the Iowa General Assembly added to Chapter 601J of the Iowa Code, provisions requiring all public funds spent on transit to be expended in conformance with the state transit plan. The Iowa General Assembly also appropriated $2 million for support of public transit in Iowa for the 1977 (beginning July 1, 1976). Annual appropriations continued in subsequent years, though the amount of funding gradually declined because of a series of "across-the-board" budget cuts. The first round of State Transit Assistance grants funded both urban transit systems and multicounty regional transit systems. The grants were provided on a discretionary basis for projects that Iowa DOT staff believed would improve transit in Iowa.

In 1977, the Iowa DOT issued "TransPlan 77" that further defined the concept of regional transit systems as being multicounty regions based on the governor's substate planning regions. The planning agency in each region was funded to prepare a regional transit development program, which inventoried existing transportation services and needs, and could serve as the basis for applications for state and federal transit assistance funding.

The Federal Public Transportation Act of 1978 (Section III of the Surface Transportation Act of 1978) established a formula program providing funding to states for support of planning, capital and operating needs of transit programs in small towns and rural areas.

The 1980's

In 1981, the Iowa DOT established a performance-based formula for the distribution of the federal rural transit assistance funds among Iowa's rural transit systems for use as operating assistance. This provided much greater predictability than a discretionary program, which helped in planning for future services. It also rewarded those agencies that were actually services, whereas a population-based distribution formula provides the same amount of money no matter how much service is being provided.

In 1982, the Iowa DOT converted the bulk of the STA Program over to a performance-based formula as well. Funding was determined not only by the amount of rides and miles of service each transit systems was providing, but also by the amount of funding from other than Iowa DOT sources each transit system was raising to support its operation.

The Federal Public Transportation Act of 1982 (Section III of the Surface Transportation Act of 1982) for the first time dedicated a penny of the federal motor fuel tax to public transit capital support. These funds were held in a new Mass Transit Account within the federal Highway Trust Fund.

In 1984, the General Assembly also amended Chapter 601J of the Iowa Code to require that any entity spending public funds to provide passenger transportation within the state must consolidate or coordinate such services with the designated urban or regional transit system in the area. Chapter 601J was changed to Chapter 324A in 1993.

In 1985, the Iowa General Assembly dedicated 1/40 of the "use tax" sales taxes collected on sale of motor vehicles and accessory equipment to supplement the annual general fund appropriation for support of public transit. The General Assembly also appropriated petroleum overcharge funds to accelerate transit capital projects by creating a revolving loan fund that allows Iowa transit systems to match federal capital grants with loan proceeds, and then pay back the loan over a multiyear period.

In 1986, the Iowa General Assembly discontinued the annual General Fund appropriations to public transit, and instead appropriated funds from the petroleum overcharge court settlements from Exxon to supplement the use tax funding for transit in FY 1987.

In 1987, the General Assembly did the same thing, except that the funds for FY1988 were drawn from the "Stripper Well" settle of petroleum overcharge cases.

In 1988, the General Assembly, instead of providing a supplemental appropriation, increased the amount of use tax dedicated to transit support to 1/20.

Also in 1988, the Iowa DOT pioneered the concept of a statewide consolidated application for the discretionary federal transit capital assistance funding, thereby giving the Iowa's smaller transit systems access to these funds, which had largely to this point gone to large transit properties around the nation.

The 1990's to the present

In 1990, Congress passed the Americans with Disabilities Act requiring all fixed-route transit systems to offer complimentary paratransit services and all transit systems to purchase wheelchair-accessible vehicles and provide equal services to persons with disabilities.

In 1991, Congress passed the Intermodal Surface Transportation Efficiency Act (ISTEA) that increased federal funding for public transit and also created new "flexible funding" programs, which could fund highway, transit or trails projects.

Also in 1991, Congress passed the Omnibus Transportation Employee Testing Act requiring drug and alcohol testing of safety-sensitive public transit employees, along with truck and over-the-road bus drivers, pilots, railroad and pipeline workers, etc.

In 1992, Iowa was among the first states to receive an earmark of federal transit discretionary funding to be used to address statewide capital needs. Included within the statewide project were five maintenance facilities to support five of Iowa's regional rural transit operations. The grant also included vehicles for nearly all of Iowa's transit operators.

In 1993, the Iowa General Assembly raised the use tax on sale of motor vehicles from 4 cents on the dollar to 5 cents on the dollar. They left the portion going to transit at 1/20 of 4 cents. In the same year, the General Assembly abolished the separate dedicated fund established for state transit assistance, and instead provided that the use tax funds for transit would go through the state's General Fund, although they established a standing appropriation from that fund in the amount of use tax funds transferred for transit.

Also in 1993, the Iowa DOT converted from an organizational structure based on modal units to a structure based on functional units. The Office of Public Transportation and the Air and Transit divisions were eliminated, and the staff positions were split among the Planning and Programming Division, Project Development Division, and Operations and Finance Division.

In 1995, the Iowa DOT and the Iowa Public Transit Association began using their public transit equipment and facilities management system (PTMS) to provide an objective prioritization of statewide requests for replacement buses, based on their age and accumulated mileage. Since that time, the PTMS tool has been expanded to provide a structure for decision-making on other types of equipment and facility projects.

In 1998, Congress passed the Transportation Equity Act for the 21st Century, which for the first time guaranteed multiyear funding levels for public transit. It also eliminated operating subsidies for transit systems serving communities with more than 200,000 population. (The effect was offset by definitional changes allowing preventive maintenance costs to be funded as a capital rather than operating expense.)

In 2000, the Iowa DOT returned to an organizational structure partly based on transportation modes. A new Office of Public Transit was created within a new Modal Division.

In 2001, the Iowa General Assembly diverted approximately $660,000 of use tax funds from public transit to other program needs within the state's General Fund.