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18 Lease Revenues thousands of dollars to millions of dollars a year, depending on system size.6 Transit systems often generate income through leasing (at market rates) portions of physical facilities, typically terminal, Concessions station, transfer, or parking facilities. Transit agencies with rail or other fixed rights-of-way also can lease these to private inter- Larger transit agencies with significant space in terminal and ests, like telecommunications companies (typically for fiber- station facilities may enter into concession agreements (an optic networks), and sometimes negotiate for free use for the income-generating strategy similar to leasing) with a variety of agency for command and control. Leases can be annual, with commercial and retail enterprises. These enterprises include rate adjustments, or multiyear. newsstands, food stands, ATMs, gift shops, vending machine operations, music stores, florists, photo-processing stores, shoe repair and sales shops, and so forth. Concession agree- Vehicle Fees ments are typically multiyear and are bid on competitively, with payments received as revenue or in the form of direct con- A variety of fees are charged to vehicle owners and oper- tributions to capital improvements. As a measure of the poten- ators by state governments. These fees are based on vehicle tial for concessions as a source of revenue, the New York value, weight, and/or age. The fees are charged for issuance Metropolitan Transit Authority (MTA) estimates that the min- of titles, licenses, registration, and/or inspection. The author- imum threshold to support a single store is 5,000 passengers a ity to collect vehicle fees is sometimes provided to local gov- day.7 Market analyses in settings outside New York may yield a ernments in the form of a local option. Revenues from these different threshold. fees are typically dedicated to covering the cost of adminis- tering these activities, to enforcement, to transportation generally, or to general revenues. It is very seldom that rev- 3.3 Common Business, Activity, enues from vehicle fees are dedicated directly to public and Related Funding Sources transportation. for Public Transportation A wide range of additional local and regional revenue sources are being used to support public transportation, Advertising although their use may not be as widespread as the traditional Most transit agencies solicit and accept advertising on sources noted above. their vehicles, facilities (such as stations and shelters), and materials (such as tickets, schedules, and maps). Advertising serves as a source of earned income and provides a means Employer/Payroll Taxes to establish broader community partnerships as well as a Employer taxes enacted to support transit are typically means to capture and maintain interest and support for imposed directly on the employer for the amount of gross transit and other public services. Print and electronic media payroll paid for services performed within the transit district. are in use, as are "sponsorship" programs that fund partic- Employer taxes are usually administered by the state revenue ular vehicles, services, or events. The majority of transit agency on behalf of the transit agencies or jurisdictions agencies contract advertising programs and their manage- authorized to raise and expend the revenue and typically are ment to private media and advertising companies, although collected quarterly. Authorizing legislation along with asso- many advertising programs are managed by in-house staff in medium and smaller systems. Revenues from advertising 6 flow directly or indirectly to the operating agencies from Schaller, B. TCRP Synthesis 51: Transit Advertising Sales Agreements. Transportation Research Board of the National Academies, Washington, single or multiyear advertising contracts and agreements as DC, 2004. Silverberg, B. R. TCRP Synthesis 32: Transit Advertising Revenue: well as from time-limited and event-based arrangements. Traditional and New Sources and Structures. Transportation Research Board, Limitations are often placed on advertising content as well National Research Council, Washington, DC, 1998. "Practical Measures to Increase Transit Industry Advertising Revenues." Research in Progress (data- as on the types of organizations from which advertising base), Transportation Research Board of the National Academies. Available is accepted. Revenue from advertising is typically modest, at http://rip.trb.org/browse/dproject.asp?n=11725. 7 from 0.1 percent to over 3.0 percent of operating revenue. Price Waterhouse, LLP; Multisystems, Inc.; and Mundle & Associates, Inc. TCRP Report 31: Funding Strategies for Public Transportation, Volumes 1 and In dollar terms, however, advertising revenues are produc- 2. Transportation Research Board, National Research Council, Washington, ing $500 million for transit agencies annually, ranging from DC, 1998.
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19 ciated regulations and guidelines define the specific types of charged on a per-space and duration basis and sometimes wages and payments to which the tax is applied as well as the through areawide surcharges.10 organizations that may be declared exempt from the tax, In addition to revenues associated with parking facilities such as federal agencies, school districts, and tax-exempt owned and/or managed by transit systems, municipally owned organizations. parking facilities have become a source of transit revenue in some regions. Some examples are the following: Rental Car Fees · San Francisco. Parking revenues from city-managed, on- Rental car taxes are paid by the consumer on the rental of street parking spaces and garages, as well as parking fines, a passenger car for a specified period of time, e.g., rentals last- currently help support Muni operations. In 2007, U.S. DOT ing less than 30 days. Rental companies typically report and awarded the San Francisco Municipal Transportation remit the tax to state revenue departments along with appli- Agency (SFMTA) $18.4 million to implement a new park- cable retail sales tax receipts. Rental car revenues may be real- ing management program known as SFpark. Beginning in located back to authorized local governments or agencies summer 2008, SFMTA launched pilot projects to test new with funds often dedicated to specific projects or purposes, strategies and technology to manage the city's parking sup- including public transportation. Rates typically range from ply more efficiently. According to Proposition A, approved 1 to 2 percent.8 In 2007, Allegheny County in Pennsylvania by San Francisco voters in fall 2007, 80 percent of city park- (Pittsburgh) enacted a $2 rental car fee to support Port ing revenues--including potential new revenues generated Authority Transit Services. under SFpark--must be used to support transportation programs, including Muni operations. · Chicago. In 2008, U.S. DOT awarded Chicago $153.1 mil- Vehicle Lease Taxes and Fees lion, a portion of which will be used to implement parking When vehicles are leased or purchased, there are taxes and surcharges to fund transit through two initiatives: fees applied to the transactions. Fees can differ by dealer, leas- "Peak Period Pricing," which would apply parking sur- ing company, and the state in which the lease occurs. Lease charges to peak period users of on-street metered park- taxes typically take the form of a sales tax on the amount of the ing and loading zones and to off-street parking facilities monthly lease payment, but there are variations from state to in the central business district; and state and region to region.9 Establishment of a fee system to help manage on-street loading zones downtown. Parking Fees Realty Transfer Taxes/Mortgage Parking fees are established to achieve multiple goals. These Recording Fees include revenue generation; traffic management; shifts in mode choice; and balance in accommodating residents', shop- A "real estate transfer tax" is a tax levied on the sale of certain pers', and employees' access needs. Parking fee structures and classes of property--residential, commercial, or industrial-- revenue use are almost always a local matter, managed either that increases with the size of the property being sold or trans- by local jurisdictions or, in the case of some locales, a separate ferred. Sometimes sellers (who have typically seen the value of parking authority. Revenues typically go to parking and vehi- their homes rise over the years) foot the bill. Other times, the cle enforcement, roads, and general funds. Transit agencies cost is imposed on buyers--who, it is argued, are making an also receive parking revenues from surface lots and structured investment in the future of a community. parking facilities that they own. In the case of larger systems, "Tax rates and dispositions vary from state to state: some operation of parking is often contracted out to a parking man- states have no real estate transfer tax enabling legislation; some agement firm. Parking demand is thought to be largely "inelas- direct the revenues to the state general fund (although collec- tic" with respect to price, providing an opportunity to increase tion remains a county responsibility); and still others give local revenues directly through price increases. Fees typically are governments the authority to collect and keep tax revenues" for such programs as land conservation, parks and open space, 8 Atkinson, C. "On the Front Lines of the Tax Battle: Industry Partners Rally 10 to the Cause." Auto Rental News, September/October 2006. www.autorental Vaca, E. and Kuzmyak, J. R. TCRP Report 95: Traveler Response to Trans- news.com/t_inside.cfm?action=article_pick&storyID=987. portation System Changes--Chapter 13: Parking Pricing and Fees. Trans- 9 "The Guide to Leasing." "Lease Fees and Taxes." Available at www. portation Research Board of the National Academies, Washington, DC, leaseguide.com/lease09.htm. 2006.