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9 SECTION 2.0 Overview of Local and Regional Public Transportation Funding 2.1 Profile of Overall Public share of total transit investment, with a slight trend upward Transportation Funding in state support. On the local level, over time, there has been a modest shift The current intergovernmental partnership in transit fund- away from local government general fund assistance toward ing is summarized in Table 2.1. For urbanized areas with pop- (1) "directly generated" funds (i.e., fares and revenues from ulations over 200,000, local sources (including regional sources) taxing authority authorized to transit agencies as indepen- account for the largest single share of total transit investment-- dent local and regional political entities) and (2) various 33 percent. If the combination of fares (25 percent), local rev- forms of earned income from transportation and nontrans- enues (33 percent), and "other" sources (9 percent) are viewed portation activities such as lease revenues or joint develop- together as complementary or interrelated means of gather- ment income. ing local resources in support of transit, over two-thirds of all investment (67 percent) is derived locally, including 60 per- cent of capital investment and nearly 69 percent of operating 2.2 Defining Local and Regional expenses. Funding Sources for Public Over the last decade or so, several trends indicate why con- Transportation sideration of new sources of local and regional funding for The definition of a local or regional source is not always public transportation is of mounting importance: clear. For instance, as a matter of administrative convenience, states may collect sales and other taxes authorized and levied Investment in public transportation from all sources has in a particular local jurisdiction and return the full revenues nearly doubled in nominal dollars, indicating a continued to the source jurisdiction for budgeting and expenditure. Are interest in meeting transit system needs, according to the such revenues a state or a local revenue source? Local human American Public Transportation Association 2006 "Public service agencies may purchase transit services for local clients Transportation Fact Book." on a contractual basis using funds received from state or fed- Despite these increases, both public transportation indus- eral programs. Are these funds a state, local, or federal revenue try and U.S. DOT estimates confirm a substantial and grow- source? ing shortfall. The level of transit investment is not keeping This study defines local or regional revenues as those rev- pace with the investment needed to maintain transit equip- enues one step removed from use by the transit agency, e.g., ment and facilities in acceptable condition, sustain current where local general funds are used to support transit, levels of performance, and expand systems and services to researchers did not attempt to examine the individual taxes serve growing travel demand. The additional transit invest- that contributed to local general fund revenues. This defini- ment required from all sources exceeds $10 billion annu- tion of local and regional revenues is meant to maintain the ally from all sources. focus of this study on the actions required by local decision- Despite consistent success in enacting new local funding makers and advocates to increase revenues from local govern- for transit in recent years, resistance to increasing taxes and ments, residents, businesses, and organizations. For the public spending persists. purposes of the project, local and regional transit revenue State and federal assistance, as well as funds raised locally sources are those that are raised from local and/or and regionally for transit, have provided a fairly constant regional residents/organizations only and made available