Municipal Transit Funds

Municipal Transit Funds

Municipalities fund transit systems in a variety of ways, depending on their culture, size and state enabling legislation. The three most common forms of transit are bus (the backbone of most systems), demand-response or paratransit, and rail transit. New hybrid modes like Bus Rapid Transit combine elements of fixed rail and bus systems, with buses using dedicated right-of-way, pre-payment prior to boarding and other tactics to speed travel. Strategies for funding transit types differ, Federal funding categories differ by mode (see Federal Transit Funds) and local funding strategies differ also differ. Federal funding covers capital costs; operating costs must be fully funded by state and local dollars. This policy creates difficulty for bus operations, since the capital investment is much smaller per unit, but every unit requires an operator, unlike rail transit, which has a high capital cost and lower operating (labor) cost.

There are several local revenue-genrating options that municipalities can utilize.  The first is the farebox, the portion paid by the rider. Municipalities also support transit through local income tax, property tax and special fee arrangements (like business improvement districts), depending on local customs. Other revenue possibilities include ancillary services like advertising revenues, station concessions, property rental or sale, foundation grants, charter sales, fare surcharges, subsidies from tolls where the transit authority is also the owner of bridges and tunnels, and parking fees. Parking fees provide the greatest opportunity for significant, sustained revenue generation, especially if the parking fees are applied to all parking spaces, not just those near transit (many transit agencies desire low-cost parking near transit to encourage ridership). Public support for local funding of transit has proven to be fairly high, with transit referenda passing in many municipalities in recent years despite a general anti-tax climate.

Municipalities struggle to fund transit and do so under adverse conditions. Federal policy requires local funding of all operating costs and generally requires a 50% match for transit capital projects, compared to a 20% match for highway projects. Some states limit the type or amount of funds that can be raised locally through tax caps or other policies. Municipalities have had to become more innovative to maintain, let alone expand, their transit systems. In spite of these impediments, some cities have made large strides in building or expanding transit systems because the need, and public demand, is great. Transit has several beneficial effects for small and large cities, including reducing household travel costs, consolidating land uses, increasing economic development around transit nodes, reducing congestion and decreasing emissions. The demand for housing near transit is expected to increase exponentially in the next few years, as "transit-oriented development" becomes an important segment of the commercial and residential market.

Transportation comprises one third of the greenhouse gas emissions that cause climate change. Every trip that can be converted from a single-occupant vehicle to a high-occupancy vehicle reduces emissions. Policies that create incentives for single-occupancy travel (increasing roadway capacity, free or subsidized parking) reduce the demand for low-emission, high occupancy mode choices. Municipalities that adequately fund transit and promote high density development encourage low-emission practices by households. Even where a commuter must drive to work, the other 80% of daily household trips can be accomplished by foot, bike or transit when travel options and nearby destinations are available. In addition, transit can carry more travelers on less impervious surface, reducing watershed and water quality problems. Transit also provides more equitable service to residents at all income levels.

An area of land which contributes overland flow of rainfall to a particular body of water. For example the Mississippi watershed stretches from the Rocky to the Appalachian Mountains.A term used for significant changes over an extended period of time in the Earth's natural environments. Climate change can be produced by natural processes (e.g. changes in the Earth's orbit) or by the impact of human behavior (e.g. deforestation). See GLOBAL CLIMATE CHANGE.Greenhouse gases are a part of the Earth's atmosphere and are both naturally occurring and the result of human chemical processes. The most common greenhouse gases are carbon dioxide, water vapor, methane, nitrous oxide, ozone, and chlorofluourocarbons. These gases trap heat and thus contribute to the warming of the planet. See also CFCS and GREENHOUSE EFFECT.

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