President Barack Obama’s stimulus money is about to be distributed, but will it be spent in the way it is intended?

One alarming example: Mass transit. Cities and states, strapped for money, are cutting back on mass transit even as it becomes more popular with Americans. At the same time, President Obama is calling for increased mass transit as a necessary step toward energy independence.

Blueprint America — with NOW on PBS — reports from North Carolina to see what the future holds for the country’s mass transit systems in these financial times.

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[Transcript]

BRANCACCIO: More people around America are using mass transit than ever before—and that’s good, says President Obama, because it points us toward energy independence. But there’s a problem—cities and states, strapped for money are cutting back on mass transit. The elephant in the room is the president’s big stimulus package. But are states ready to take the money and ring in a golden era of mass transit? Senior Correspondent Maria Hinojosa and Producer Dan Logan have our report from North Carolina, part of a PBS-wide series on the country’s infrastructure that we call “Blueprint America.”

HINOJOSA: Pat McCrory is the seven-term mayor of Charlotte, North Carolina. He’s a Republican… one of the most prominent conservative politicians in a very conservative state. He’s pro-life and a proud fiscal hawk. But two years ago, he put his entire political career on the line to build this light rail line in Charlotte. It was the one of the most expensive public works projects in North Carolina’s history, costing almost a half-a-billion dollars. And it almost cost McCrory his job.

You’re a Republican. You’re a conservative Republican. Most people don’t think of conservative Republicans as being big supporters of mass transit.

MCCRORY: I caught a lotta heat from my political right when I became a very strong advocate for mass transit in Charlotte. It was though I had lost the label of you’re no longer a conservative if you support mass transit.

HINOJOSA: The mayor was vilified by fellow conservatives over the light rail, who called him a tax-and-spend liberal. The project became known as the “McCrory Line” and that wasn’t a compliment.

MCCRORY: My opponents said McCrory’s lost his mind. And this is going to be a boondoggle and no one is going to ride it. I was scared to death.

HINOJOSA: Opponents tried to pull the plug on the project by repealing the sales tax that was paying for the line. The referendum on the tax repeal—and the mayor’s own re-election bid—came just three weeks before the line was supposed to open.

MCCRORY: I was afraid I was gonna have to leave town for fear that, you know, five people would arrive and three of them would be homeless and the other two would be criminals.

HINOJOSA: But much to everyone’s surprise, voters backed the transit tax overwhelmingly, the mayor was re-elected and the light rail, now a year old, has turned out to be hugely popular. Thousands more people are riding the line every week than were expected, and big cities like Orlando are sending delegations to see what all the fuss is about. In the heart of the south, where people love their cars, McCrory’s light rail line is winning hearts and minds.

FEMALE RIDER: This is the best thing that’s happened to us.

HINOJOSA: Why?

FEMALE RIDER: Why? Because, I don’t have to worry about the traffic. One night I sat for three hours on 77 to get home. I don’t now.

HINOJOSA: Mayor McCrory would like nothing better than to expand mass transit in Charlotte. In fact, he says he has a $300 million plan to build a new commuter rail that he says is “shovel-ready”. He’s hoping that means he’ll get a share of the $789 billion stimulus package that President Obama was pushing this week.

PRESIDENT OBAMA: There’s a lot of work that needs to be done on our nation’s congested roads and highways, crumbling bridges and levees, and crowded trains and transit systems.

HINOJOSA: But when it comes to stimulus projects, McCrory is not very optimistic about how the dollars will get spent.

What are you worried about here in North Carolina?

MCCRORY: My fear is money being spent based upon politics and not common sense, and power and not sustainability.

HINOJOSA: And what does that look like?

MCCRORY: It looks like—checks bein’ written with no qualitative sustainable analysis being complete before the check is spent.

HINOJOSA: Are you saying that you’re concerned that there might be a road to nowhere, a bridge to nowhere in North Carolina?

MCCRORY: In every city and county and state in the United States.

HINOJOSA: There’s a catch with the stimulus package. While President Obama urged Congress to keep the bill free of pet projects, most of the $50 billion for transportation will go directly to the state governments to fund whatever shovel-ready projects they want. When it comes to pet projects, state politicians can be just as irresponsible as their colleagues in Congress. Here in North Carolina, many believe that stimulus spending will have little to do with common sense… and a lot more to do with politics.

MCCRORY: First of all, there’s big money in transportation. I mean, there’s a huge infrastructure investment. And there’s a lotta political involvement of big money in transportation.

HINOJOSA: When you think about transportation in North Carolina, is it always intimately tied into extraordinary politics?

MCCRORY: North Carolina—transportation and politics have been intermingled for decades. North Carolina’s Department of Transportation oversees the state’s roads, bridges, and railways. It’s been criticized over the years for being nothing more than a bankroll for projects favored by its board members. The 19 member board that has approved funding for projects has been mostly made up of politicians and political fundraisers not transportation experts.

HARTGEN: The state does not use objective criteria in evaluating projects. We don’t compare projects head to head. Even within district, but let alone between districts.

HINOJOSA: Professor David Hartgen studies transportation at the University of North Carolina at Charlotte. He says that each board member represents a different part of the state… so traditionally, to get projects funded in their own region, they agree to vote “yes” for each others’ projects.

HARTGEN: As far as I know, the transportation board has never had a no vote on any single project in the last 15 years.

HINOJOSA: That shotgun approach to funding projects is a problem that seems to extend far beyond North Carolina. Phineas Baxandall and his colleagues at the U.S. Public Interest Research Group have been pouring over the states’ wish lists for the stimulus money and he says that in many states, there are projects seem almost arbitrary.

BAXANDALL: What we know from looking at these wish lists is—that the states sometimes have abysmal, terrible plans on these wish lists.

HINOJOSA: Take a look at Missouri, for example. In the initial list that the state department of transportation drew up for the stimulus, there were no projects listed for the entire city of St. Louis.

BAXANDALL: St. Louis was missing in the Missouri wish list. And that’s kind of amazing to talk about transportation without St. Louis and Missouri.

HINOJOSA: And in North Carolina, the state Department of Transportation’s own employees are on the record saying that historically, funding decisions have been influenced by petty politics. In a recent report commissioned by the state, one employee said, “What we work on depends on who’s screaming the loudest.” Another asked, “…why are we doing random political projects?”

It wasn’t always this way with transportation policy… our country used to have a clear, national vision for how we spent money. In the 1950s, President Dwight D. Eisenhower created the Interstate Highway System, which connected the entire country and boosted the economy for decades. But now that America’s cities have been connected, there’s no national vision that addresses our current needs.

BAXANDALL: If we’re being serious about transportation now, we’d be focusing on, you know, what are our needs. We need to be reducing our consumption of oil. We need to be reducing our congestion. We need to be reducing the amount of global warming poll—pollution that we create. These are the kind of, you know, screaming national priorities that we should be focused on.

HINOJOSA: President Obama talked about creating a national infrastructure bank that would boost funding for smart projects…but that’s still on the drawing board. Mayor McCrory would like to push the President think bigger.

MCCRORY: I would recommend that the president develop a plan, a vision of how our infrastructure will look for the next 50 to 100 years in the United States. Whatever we spend the money should be part of our 25 to 50 year plan. That you’ll know the impact not just next year, but you’ll know the real impact 50 years from now. And the people 50 years from now would go, “You know what, they were pretty smart to build this thing.”

HINOJOSA: And the smart vision for an infrastructure of tomorrow, McCrory argues, starts with mass transportation. Transit advocates say that we need to take a moment to consider our future population growth. In the next forty years, America will add over a hundred million people our roads simply won’t be able to handle all of those cars. They say mass transit allows us to shape that growth. Instead of continuing to sprawl out beyond our cities, Americans would have the option to live in a walk-able urban environment. Charlotte will add the equivalent population of the city of Pittsburgh in the next twenty years so they’re trying to get ahead of the curve. So far, the results are promising.

MCCRORY: Downtown Charlotte was basically an 8:00 to 5:00 office park. People came in at 8:00, went inside, got in their cars and went out into the suburbs.

HINOJOSA: And now?

MCCRORY: And now, it’s an area of incredible—vitality, entertainment, and work environment.

HINOJOSA: The light rail makes it easier to get around Charlotte without a car… rolling right by the basketball arena… the football stadium… and the children’s museum.
The mayor is especially excited about a new building near the line.

MCCRORY: This is the NASCAR hall-of-fame.

HINOJOSA: In case you forgot, we are in NASCAR country.

MCCRORY: You gotta understand NASCAR around here. It’s serious stuff.

HINOJOSA: But the most interesting area that’s developing around the light rail is a ten-minute ride from the center of town. The South End is at the heart of Charlotte’s hopes for urban renewal around transit… after a history of blight and decay.

So when people in Charlotte used to talk about the south end like, you know, 10-20 years ago—

MCCRORY: The term south end didn’t even exist.

HINOJOSA: It was a neighborhood you didn’t go to.

MCCRORY: This was a neighborhood with no name.

HINOJOSA: In the early 1900s, the area was home to Charlotte’s industrial mills. But in the years that followed, businesses abandoned the area and it became one of the worst neighborhoods in Charlotte. Now, there are restaurants… apartment buildings… and new construction everywhere. The city has worked hand-in-hand with the real estate developers to build up the area.
It hasn’t always been easy.

FINCH: I think one of my—greatest memories is trying to sell transit and talking to a bunch of real estate brokers who use their car all the time, and, you know, run around and say, “Eh, that’s not gonna work. I need my car.”

HINOJOSA: Tracy Finch works for Harris Development Group, a real estate firm wooing suburbanites to live near the light rail. It’s taken some time and effort…but people are coming around.

FINCH: When people ride it and they’re amazed at, you know, the diversity—people are riding it. How clean it is, how easy it is. They start to become believers really quick. I read in the paper all the time somebody saying, you know, “I can read the paper on the way in.” That has value to people.

HINOJOSA: The economic downturn has had an impact on the South End real estate market. But unlike other areas of the country, construction here still continues.
A firm from Texas is building the area’s first multi-storied luxury apartment building. They think they’re going to make a lot of money.

FINCH: They wanted to put the—11 stories, 310 units on there, and some of the highest rents that we’ve seen in Charlotte. Because they think that the district with the line in it, and the proximity to uptown, everything that’s going on here, it was—it was the place to be.

HINOJOSA: And there are many other developments in the works.

MCCRORY: Mass transit’s not just about transportation, it’s also about economic development, creating jobs and making money. And that’s why a conservative like me supports it.

HINOJOSA: But the light rail is not only lifting up high-end real estate developers. It’s also revitalizing low-income neighborhoods.

PARKER: We’ve had relatively struggling communities be transformed by it.

HINOJOSA: Keith Parker is the head of the Charlotte Area Transit System, or, “CATS”, which runs the light rail. He points to the Wilmore neighborhood in the south end…one of the most distressed areas of the city, with high crime and not much in the way of desirable real estate as late as 2006. Now, in 2009…

PARKER: Property values went from about $92,000 to $195,000 in this economy. And just overall, you’ve seen a neighborhood absolutely transformed. And this—these are not millionaires, and so on. These are blue collar, working class people.

HINOJOSA: But transit alone doesn’t transform neighborhoods. The key is the way you connect those neighborhoods to the train stations with well-planned sidewalks that create a walk-able community.

MCCRORY: That’s part of the total package of land use design. It’s not just the rail or the train it’s what you do off the rail and train so the customer gets the fulfillment of, I can walk to a place to get a sandwich, I can walk to go shopping, I can walk to go live. Many cities you get off and the ’70s and ’80s development there’s no sidewalk so their not going to ride the train.

HINOJOSA: When it is successful, transit can even foster social change. You’ll see a diverse mix riding the rails… and many credit the popularity of the light rail with connecting the inner city and the suburbs like never before. Ultimately, the mass transit experiment in Charlotte is about redefining a city… while retaining its original character.

There are some people that are gonna say, Mr. Mayor, you want to turn Charlotte into New York City, with all this mass transit? We don’t want that.

MCCRORY: No, I’ll tell ya, what we want in Charlotte is we want big city opportunity, but we want to keep a small town environment and quality of life. So we’re still seeking the best of both worlds.

HINOJOSA: But with the economy in freefall, Charlotte’s successful urban experiment is facing serious challenges. Remember, its revenue comes from the sales tax… so with consumer spending at a standstill, Charlotte transit will have a quarter of a billion dollars less to work with than they had expected over the next ten years. Next month, they’ll be cutting back on service… and Charlotte is not alone. Over sixty communities nationwide are reducing seeing fare hikes and less service, even as more Americans are riding transit than in the last fifty years.

PARKER: What we’re struggling with is an economy that’s really screaming for us to have low-cost transportation. While—revenues are in a place where we can’t give them all the things that we would like to.

HINOJOSA: And despite its huge price tag, there are no guarantees that the stimulus dollars will solve Charlotte’s problems. For one thing, the money can’t be used to cover operating costs. So the fare hikes, layoffs and service cuts will continue. But more importantly, these new stimulus dollars won’t change the old-school way of delivering transportation money to the states. That’s not the wholesale change transit advocates had hoped for.

BAXANDALL: Epical change is epical for a reason. It doesn’t—it doesn’t happen easily. All the stars have to be aligned and—and the stimulus here, there may be half-aligned.

HINOJOSA: Why? Because, says Baxandall, the federal rules work like this: the more roads a state builds and the more gas people guzzle, the more federal money a state receives.

BAXANDALL: What that means, in effect, is that if you are a state that is trying to do the right thing in terms of reducing our dependence on oil, you’re gonna be getting less money. So we have the incentives which are punishing people for doing the right thing. And that’s exactly the opposite of what we should be doing.

HINOJOSA: And there are lots of other obstacles to funding mass transit projects, says Baxandall. They have to pass more rigorous environmental reviews than roads and are forced to compete against projects from other states—not the case for road money.

BAXANDALL: If you’re a governor, if you’re, you know, a mayor, you wanna have certainty about—I’ve invested these resources, I’ve invested this time, I’ve invested maybe my political career on something and if you can’t have that certainty, that is—I mean that is just a huge disincentive.

HINOJOSA: And transit planners say there’s another roadblock to mass transportation projects… this one stemming from the policies of the Bush administration.

KING: I do not believe the Bush administration believed in the growth-shaping characteristics of transit, so they were not looking forward, they were looking back.

HINOJOSA: David King heads regional transit service in Raleigh, Durham, and Chapel Hill, North Carolina… known as the research triangle. He says that policies under Bush’s U.S. Department of transportation discouraging transit have made less “shovel-ready” projects available for the stimulus.
King has personal experience dealing with the administration. Four years ago, he tried to bring light rail to the triangle to anticipate the population boom expected in the region over the next twenty years. But his proposal was rejected by Bush’s Department of Transportation… because, they were told, not enough people lived there.

KING: They were looking at, “You don’t have the density today,” when in fact what you’re trying to do is shape the growth so that the—the density and the development opportunity comes to the transit.

HINOJOSA: Now, with shovel-ready projects in demand for the stimulus, transit advocates are upset because they say the federal pipeline for projects has dried up over the last eight years.

KING: The conflict is between ready to go projects and the need to spend money quickly. And there’re not many because we’ve had eight years of those projects being systematically discouraged.

HINOJOSA: Are you frustrated with that? Are you just saying, “Gosh, if only the past eight years we had known what to prepare for, that we would have a different administration with a different perspective on mass transit”…

KING: Oh, surely. Surely it’s frustrating.

HINOJOSA: King has also been frustrated with how little North Carolina spends on mass transit… last year, only 3% of its transportation budget.
But times might be changing at the department.

CONTI: Transportation in North Carolina has been very road-focused, highway-focused. We need to continue to maintain that system and expand it, where appropriate. But we also need to look at these other modes in a much more serious way.

HINOJOSA: Gene Conti is North Carolina’s new Secretary of Transportation. He was hired by Governor Bev Perdue, who narrowly defeated Pat McCrory last fall. With the department getting so much bad press, she made transportation reform one of her big campaign issues.

You want your governor to be reelected in four years, so how do you measure the politics then of a huge stimulus package?

CONTI: This may sound naïve, I don’t think it is. But good policies are good politics. So, we’re concerned about good policies.

HINOJOSA: On the governor’s first day in office, she issued an executive order taking power away from the Board of Transportation to de-politicize the funding process. Much of that authority now resides with Conti, who has thirty years experience as a transportation administrator.

Transportation has been controversial in the state of North Carolina. Are you convinced that the governor’s reforms—will actually make a difference this time?

CONTI: I absolutely believe they will make a difference. But we’re gonna have to prove that to people. I think there’s a lot of justified skepticism and a lot of concern among the public. So, we’re gonna have to do our jobs well and we’re gonna have to do them openly and transparently so people understand what we’re doing, why we’re doing it and they can judge the results.

HINOJOSA: Is your understanding that the transportation board, with the governor’s reforms will now be more fact-based, what they decide to support?

CONTI: I think they will be. It won’t be people getting in a dark room somewhere and making decisions at the last minute.

HINOJOSA: But Mayor McCrory will believe it when he sees it.

MCCRORY: I hope. I hope he’s right. But, based upon past history—politicians will get involved.

HINOJOSA: With his transit budget in shambles and the city clamoring for more service, the mayor is still waiting to hear from the Department of Transportation about getting money for a new commuter rail in Charlotte.

The time has come, says McCrory, for our country to make smarter choices about transportation… or else, he says, our economy will be choked with congestion in the future.

MCCRORY: You can wait until the pain arrives and implement change then. It will be an easy sell, but mostly likely you’ve waited too long and it’ll be too expensive. Or you can anticipate the pain and change now. And most likely, the change will work and it’ll be less expensive. But it’s gonna be one hell of a sale.

BRANCACCIO: After this story you may want to consult a crystal ball about the state of public transit where you live. Well, we’ve got one- use an interactive map to see if fare hikes and service reductions are being planned in your state. It’s all on our website.

And that’s it for NOW. From New York, I’m David Brancaccio. We’ll see you next week.