It is also possible, as surmised in the highway section of this chapter, that recent investments have provided short-term maintenance fixes while larger, more expensive replacement needs have simply been deferred to the future. TEA-21 attempts to address this possibility by eliminating most operating costs from eligibility for Section 5307 Urbanized Area Formula funding in large cities (i.e., urbanized areas over 200,000 in population), while specifically allowing preventative maintenance costs as an eligible expense. It is hoped that this change may result in a more-optimal allocation of capital funds by transit agencies.

Another possibility for the perceived insensitivity of conditions to the funding gap is that capital funds have been sufficient to cover pure rehabilitation and replacement needs, while not allowing for capacity expansion to maintain current performance levels. However, this assumes that all capital funds are being used on rehab and replacement. In actuality, much of this funding has gone toward new vehicles for system expansion and new, performance-improving rail systems. The performance measures have also stayed relatively constant.

Two features of the data and modeling in TERM should also be noted. First, for many transit systems, increases in vehicle utilization may be a sign of improved system efficiency, rather than a stress on system capacity. If current vehicles are being underutilized (as may especially be the case for new rail systems in their start-up periods), then there will be excess capacity in the system, and travel growth can easily be handled by existing assets, so long as they are properly rehabilitated and replaced. Second, the Rehabilitation and Replacement module in TERM (see Appendix I) invests sufficient amounts to maintain conditions on the existing asset base. As new assets for system expansion are purchased, the average condition of all assets will increase, even if the condition of existing assets remains constant. Some of this may be reflected in the stability of bus vehicle conditions even as investment appears to be inadequate to do so.