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TRANSIT TCRP REPORT 129 COOPERATIVE RESEARCH PROGRAM Sponsored by the Federal Transit Administration Local and Regional Funding Mechanisms for Public Transportation

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TCRP OVERSIGHT AND PROJECT TRANSPORTATION RESEARCH BOARD 2009 EXECUTIVE COMMITTEE* SELECTION COMMITTEE* CHAIR OFFICERS Robert I. Brownstein AECOM Consult, Inc. CHAIR: Debra L. Miller, Secretary, Kansas DOT, Topeka VICE CHAIR: Adib K. Kanafani, Cahill Professor of Civil Engineering, University of California, Berkeley MEMBERS EXECUTIVE DIRECTOR: Robert E. Skinner, Jr., Transportation Research Board Ann August Santee Wateree Regional Transportation Authority John Bartosiewicz MEMBERS McDonald Transit Associates J. Barry Barker, Executive Director, Transit Authority of River City, Louisville, KY Michael Blaylock Jacksonville Transportation Authority Allen D. Biehler, Secretary, Pennsylvania DOT, Harrisburg Linda J. Bohlinger John D. Bowe, President, Americas Region, APL Limited, Oakland, CA HNTB Corp. Larry L. Brown, Sr., Executive Director, Mississippi DOT, Jackson Raul Bravo Deborah H. Butler, Executive Vice President, Planning, and CIO, Norfolk Southern Corporation, Raul V. Bravo & Associates Gregory Cook Norfolk, VA Veolia Transportation William A.V. Clark, Professor, Department of Geography, University of California, Los Angeles Terry Garcia Crews David S. Ekern, Commissioner, Virginia DOT, Richmond StarTran Nicholas J. Garber, Henry L. Kinnier Professor, Department of Civil Engineering, University of Virginia, Nathaniel P. Ford, Jr. Charlottesville SF Municipal Transportation Agency Kim R. Green Jeffrey W. Hamiel, Executive Director, Metropolitan Airports Commission, Minneapolis, MN GFI GENFARE Edward A. (Ned) Helme, President, Center for Clean Air Policy, Washington, DC Jill A. Hough Will Kempton, Director, California DOT, Sacramento North Dakota State University Susan Martinovich, Director, Nevada DOT, Carson City Angela Iannuzziello ENTRA Consultants Michael D. Meyer, Professor, School of Civil and Environmental Engineering, Georgia Institute of John Inglish Technology, Atlanta Utah Transit Authority Michael R. Morris, Director of Transportation, North Central Texas Council of Governments, Arlington Jeanne W. Krieg Neil J. Pedersen, Administrator, Maryland State Highway Administration, Baltimore Eastern Contra Costa Transit Authority David A. Lee Pete K. Rahn, Director, Missouri DOT, Jefferson City Connecticut Transit Sandra Rosenbloom, Professor of Planning, University of Arizona, Tucson Clarence W. Marsella Tracy L. Rosser, Vice President, Corporate Traffic, Wal-Mart Stores, Inc., Bentonville, AR Denver Regional Transportation District Rosa Clausell Rountree, Consultant, Tyrone, Georgia Gary W. McNeil Henry G. (Gerry) Schwartz, Jr., Chairman (retired), Jacobs/Sverdrup Civil, Inc., St. Louis, MO GO Transit Michael P. Melaniphy C. Michael Walton, Ernest H. Cockrell Centennial Chair in Engineering, University of Motor Coach Industries Texas, Austin Frank Otero Linda S. Watson, CEO, LYNXCentral Florida Regional Transportation Authority, Orlando PACO Technologies Steve Williams, Chairman and CEO, Maverick Transportation, Inc., Little Rock, AR Keith Parker Charlotte Area Transit System Jeffrey Rosenberg EX OFFICIO MEMBERS Amalgamated Transit Union Thad Allen (Adm., U.S. Coast Guard), Commandant, U.S. Coast Guard, Washington, DC Michael Scanlon San Mateo County Transit District Rebecca M. Brewster, President and COO, American Transportation Research Institute, Smyrna, GA Beverly Scott Paul R. Brubaker, Research and Innovative Technology Administrator, U.S.DOT Metropolitan Atlanta Rapid Transit Authority George Bugliarello, President Emeritus and University Professor, Polytechnic Institute of New York James S. Simpson University, Brooklyn; Foreign Secretary, National Academy of Engineering, Washington, DC FTA James Stem Sean T. Connaughton, Maritime Administrator, U.S.DOT United Transportation Union Clifford C. Eby, Acting Administrator, Federal Railroad Administration, U.S.DOT Frank Tobey LeRoy Gishi, Chief, Division of Transportation, Bureau of Indian Affairs, U.S. Department of the First Transit Interior, Washington, DC EX OFFICIO MEMBERS Edward R. Hamberger, President and CEO, Association of American Railroads, Washington, DC William W. Millar John H. Hill, Federal Motor Carrier Safety Administrator, U.S.DOT APTA John C. Horsley, Executive Director, American Association of State Highway and Transportation Robert E. Skinner, Jr. Officials, Washington, DC TRB John C. Horsley Carl T. Johnson, Pipeline and Hazardous Materials Safety Administrator, U.S.DOT AASHTO David Kelly, Acting Administrator, National Highway Traffic Safety Administration, U.S.DOT Thomas J. Madison, Jr. Sherry E. Little, Acting Administrator, Federal Transit Administrator, U.S.DOT FHWA Thomas J. Madison, Jr., Administrator, Federal Highway Administration, U.S.DOT TDC EXECUTIVE DIRECTOR William W. Millar, President, American Public Transportation Association, Washington, DC Louis Sanders Robert A. Sturgell, Acting Administrator, Federal Aviation Administration, U.S.DOT APTA Robert L. Van Antwerp (Lt. Gen., U.S. Army), Chief of Engineers and Commanding General, SECRETARY U.S. Army Corps of Engineers, Washington, DC Christopher W. Jenks TRB *Membership as of November 2008. *Membership as of January 2009.

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TRANSIT COOPERATIVE RESEARCH PROGRAM TCRP REPORT 129 Local and Regional Funding Mechanisms for Public Transportation CAMBRIDGE SYSTEMATICS, INC. Bethesda, MD KFH GROUP, INC. Bethesda, MD MCCOLLOM MANAGEMENT CONSULTING, INC. Darnestown, MD BRENDON HEMILY Toronto, ON, Canada Subject Areas Public Transit Planning and Administration Research sponsored by the Federal Transit Administration in cooperation with the Transit Development Corporation TRANSPORTATION RESEARCH BOARD WASHINGTON, D.C. 2009 www.TRB.org

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TRANSIT COOPERATIVE RESEARCH PROGRAM TCRP REPORT 129 The nation's growth and the need to meet mobility, environmental, Project H-34 and energy objectives place demands on public transit systems. Current ISSN 1073-4872 systems, some of which are old and in need of upgrading, must expand ISBN: 978-0-309-11771-5 service area, increase service frequency, and improve efficiency to serve Library of Congress Control Number 2009900720 these demands. Research is necessary to solve operating problems, to 2009 Transportation Research Board adapt appropriate new technologies from other industries, and to intro- duce innovations into the transit industry. The Transit Cooperative Research Program (TCRP) serves as one of the principal means by which the transit industry can develop innovative near-term solutions COPYRIGHT PERMISSION to meet demands placed on it. Authors herein are responsible for the authenticity of their materials and for obtaining written permissions from publishers or persons who own the copyright to any previously The need for TCRP was originally identified in TRB Special Report published or copyrighted material used herein. 213--Research for Public Transit: New Directions, published in 1987 Cooperative Research Programs (CRP) grants permission to reproduce material in this and based on a study sponsored by the Urban Mass Transportation publication for classroom and not-for-profit purposes. Permission is given with the Administration--now the Federal Transit Administration (FTA). A understanding that none of the material will be used to imply TRB, AASHTO, FAA, FHWA, report by the American Public Transportation Association (APTA), FMCSA, FTA, or Transit Development Corporation endorsement of a particular product, Transportation 2000, also recognized the need for local, problem- method, or practice. It is expected that those reproducing the material in this document for educational and not-for-profit uses will give appropriate acknowledgment of the source of solving research. TCRP, modeled after the longstanding and success- any reprinted or reproduced material. For other uses of the material, request permission ful National Cooperative Highway Research Program, undertakes from CRP. research and other technical activities in response to the needs of tran- sit service providers. The scope of TCRP includes a variety of transit research fields including planning, service configuration, equipment, NOTICE facilities, operations, human resources, maintenance, policy, and The project that is the subject of this report was a part of the Transit Cooperative Research administrative practices. Program conducted by the Transportation Research Board with the approval of the TCRP was established under FTA sponsorship in July 1992. Pro- Governing Board of the National Research Council. Such approval reflects the Governing posed by the U.S. Department of Transportation, TCRP was autho- Board's judgment that the project concerned is appropriate with respect to both the rized as part of the Intermodal Surface Transportation Efficiency Act purposes and resources of the National Research Council. of 1991 (ISTEA). On May 13, 1992, a memorandum agreement out- The members of the technical advisory panel selected to monitor this project and to review lining TCRP operating procedures was executed by the three cooper- this report were chosen for recognized scholarly competence and with due consideration for the balance of disciplines appropriate to the project. The opinions and conclusions ating organizations: FTA, the National Academies, acting through the expressed or implied are those of the research agency that performed the research, and Transportation Research Board (TRB); and the Transit Development while they have been accepted as appropriate by the technical panel, they are not Corporation, Inc. (TDC), a nonprofit educational and research orga- necessarily those of the Transportation Research Board, the National Research Council, nization established by APTA. TDC is responsible for forming the the Transit Development Corporation, or the Federal Transit Administration of the U.S. Department of Transportation. independent governing board, designated as the TCRP Oversight and Project Selection (TOPS) Committee. Each report is reviewed and accepted for publication by the technical panel according to procedures established and monitored by the Transportation Research Board Executive Research problem statements for TCRP are solicited periodically but Committee and the Governing Board of the National Research Council. may be submitted to TRB by anyone at any time. It is the responsibility The Transportation Research Board of the National Academies, the National Research of the TOPS Committee to formulate the research program by identi- Council, the Transit Development Corporation, and the Federal Transit Administration fying the highest priority projects. As part of the evaluation, the TOPS (sponsor of the Transit Cooperative Research Program) do not endorse products or Committee defines funding levels and expected products. manufacturers. Trade or manufacturers' names appear herein solely because they are considered essential to the clarity and completeness of the project reporting. Once selected, each project is assigned to an expert panel, appointed by the Transportation Research Board. The panels prepare project state- ments (requests for proposals), select contractors, and provide techni- cal guidance and counsel throughout the life of the project. The process for developing research problem statements and selecting research agencies has been used by TRB in managing cooperative research pro- grams since 1962. As in other TRB activities, TCRP project panels serve voluntarily without compensation. Because research cannot have the desired impact if products fail to reach the intended audience, special emphasis is placed on dissemi- Published reports of the nating TCRP results to the intended end users of the research: tran- sit agencies, service providers, and suppliers. TRB provides a series TRANSIT COOPERATIVE RESEARCH PROGRAM of research reports, syntheses of transit practice, and other support- are available from: ing material developed by TCRP research. APTA will arrange for Transportation Research Board workshops, training aids, field visits, and other activities to ensure Business Office that results are implemented by urban and rural transit industry 500 Fifth Street, NW Washington, DC 20001 practitioners. The TCRP provides a forum where transit agencies can cooperatively and can be ordered through the Internet at address common operational problems. The TCRP results support and http://www.national-academies.org/trb/bookstore complement other ongoing transit research and training programs. Printed in the United States of America

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COOPERATIVE RESEARCH PROGRAMS CRP STAFF FOR TCRP REPORT 129 Christopher W. Jenks, Director, Cooperative Research Programs Crawford F. Jencks, Deputy Director, Cooperative Research Programs Dianne S. Schwager, Senior Program Officer Eileen P. Delaney, Director of Publications Ellen M. Chafee, Assistant Editor TCRP PROJECT H-34 PANEL Field of Policy and Planning Lynsonya Harris, Miami-Dade Transit Agency, North Miami, FL (Chair) John P. Bartosiewicz, McDonald Transit Associates, Inc., Fort Worth, TX Steven A. Billings, Missouri DOT, Jefferson City, MO Jeffrey Brown, Florida State University, Tallahassee, FL Jeanne J. Erickson, Erickson Consulting, LLC, Evergreen, CO Thomas D. Fox, Memphis Area Transit Authority, Memphis, TN Sharon Greene, Sharon Greene & Associates, Laguna Beach, CA Jason Lee, San Jose, CA Emeka Moneme, District of Columbia DOT, Washington, DC Rachel Weinberger, University of Pennsylvania, Philadelphia, PA Mokhtee Ahmad, FTA Liaison Darin Allan, FTA Liaison Elizabeth Day, FTA Liaison John Neff, APTA Liaison Richard Weaver, APTA Liaison Martine A. Micozzi, TRB Liaison AUTHOR ACKNOWLEDGMENTS The TCRP Project H-34 team wishes to acknowledge and thank the many respondents and inter- viewees who provided data and information about their respective local and regional funding sources and funding mechanics. In addition, thanks are due to the H-34 project panel and Dianne Schwager, the pro- gram officer for this project, who kept the project focused on its main objective--a comprehensive list- ing of local and regional funding sources--while pushing to provide useful background and contextual information to make the list of sources as meaningful as possible to potential readers.

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FOREWORD By Dianne S. Schwager Staff Officer Transportation Research Board TCRP Report 129: Local and Regional Funding Mechanisms for Public Transportation and the Local and Regional Funding Database, which is posted on the TRB website at http://trb.org/news/blurb_detail.asp?id=9599, will be of interest to public transportation sys- tems, local and regional governments, and others interested in funding for public transporta- tion services. The Local and Regional Funding Database is intended to serve as an interactive repository of information gathered from transit systems about their local and regional funding mechanisms. This database can be updated in the future as additional information becomes available. The report and the database provide an extensive list of funding sources that are in use or have the prospect of being used at the local and regional level to support public trans- portation. The research identified and defined six major categories of local and regional funding for public transportation, including the following: (1) traditional tax- and fee- based funding sources; (2) common business, activity, and related funding sources; (3) reve- nue streams from projects; (4) new "user" or "market-based" funding sources; (5) fi- nancing mechanisms; and (6) fare policy and strategy. The report focuses on the first two categories. In addition to identifying and describing local and regional funding sources for public transportation, TCRP Report 129 includes the following: Guidance on evaluating local and regional funding mechanisms, including guidance on the advantages and disadvantages of various sources, criteria that should be considered in selecting local or regional funding sources, and consideration of key contextual issues that are important in establishing a practical base of understanding to support local and regional funding alternatives; A list of steps--emerging from the experiences of transit systems around the country that have successfully sought and enacted new or increased sources of funding--that should be taken by transit systems trying to enact new local and regional transit funding mech- anisms; A very brief description of the Local and Regional Funding Database and how to use it (for a more in-depth description of how to use the database, please refer to the Local and Regional Funding Database User Manual); and A brief description of international experiences with local and regional funding for pub- lic transportation.

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CONTENTS 1 Summary 1 S.1 Purpose and Approach 1 S.2 A Typology of Local and Regional Funding Sources for Public Transportation 3 S.3 Overview of Current Local and Regional Public Transportation Funding 4 S.4 Local and Regional Public Transportation Funding by System Size 4 S.5 Local and Regional Public Transportation Funding by Type of Agency 5 S.6 Criteria in Selecting and Evaluating Funding Sources 5 S.7 Steps in Enacting New Funding Sources for Public Transportation 7 Section 1.0 Introduction 7 1.1 Project Description 7 1.2 Project Purpose 7 1.3 Approach 7 1.4 Organization of the Report 9 Section 2.0 Overview of Local and Regional Public Transportation Funding 9 2.1 Profile of Overall Public Transportation Funding 9 2.2 Defining Local and Regional Funding Sources for Public Transportation 10 2.3 Profile of Local and Regional Public Transportation Funding Sources--2005 14 Section 3.0 Current and Potential Sources of Local and Regional Funding for Public Transportation 14 3.1 Local and Regional Public Transportation Funding Typology and Definitions 16 3.2 Traditional Local and Regional Tax- and Fee-Based Funding Sources for Public Transportation 18 3.3 Common Business, Activity, and Related Funding Sources for Public Transportation 20 3.4 Current Examples of Traditional or Common Local and Regional Funding Sources 27 3.5 Other Categories of Local and Regional Public Transportation Funding 27 3.6 Revenue Streams from Projects 34 3.7 Public Transportation Funding Mechanisms Not in Widespread Use 39 Section 4.0 Guidance in Considering New Local and Regional Funding Sources for Public Transportation 39 4.1 General Process for Taxing and Revenue-Raising and Mechanics at the Local and Regional Level 39 4.2 Contextual Issues in Local and Regional Funding for Public Transportation 42 4.3 Basic Advantages and Disadvantages of Local and Regional Funding Sources 42 4.4 Criteria for Evaluating Potential Local and Regional Funding Sources 47 4.5 Performance of Tax and Fee Mechanisms

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50 Section 5.0 Enacting New Funding Mechanisms for Public Transportation 50 5.1 Steps for Successful Implementation of New or Enhanced Funding Mechanisms 52 5.2 Arguments for Increased Funding for Public Transportation 53 Section 6.0 Local and Regional Funding Database and Its Use 53 6.1 Access to the Resource Information 53 6.2 Updating Local and Regional Public Transportation Funding Resource Material 55 Appendix A Public Transportation Systems Interviewed 59 Appendix B Transit Agency Interview Guide 60 Appendix C Observations from the National Transit Database 62 Appendix D International Experiences with Local and Regional Public Transportation Funding 64 Appendix E Selected Bibliography 69 Appendix F Local Funding Measures Supporting Transit (20002006)