National Academies Press: OpenBook
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Suggested Citation:"Front Matter." National Academies of Sciences, Engineering, and Medicine. 2009. Local and Regional Funding Mechanisms for Public Transportation. Washington, DC: The National Academies Press. doi: 10.17226/14187.
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Suggested Citation:"Front Matter." National Academies of Sciences, Engineering, and Medicine. 2009. Local and Regional Funding Mechanisms for Public Transportation. Washington, DC: The National Academies Press. doi: 10.17226/14187.
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Suggested Citation:"Front Matter." National Academies of Sciences, Engineering, and Medicine. 2009. Local and Regional Funding Mechanisms for Public Transportation. Washington, DC: The National Academies Press. doi: 10.17226/14187.
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Suggested Citation:"Front Matter." National Academies of Sciences, Engineering, and Medicine. 2009. Local and Regional Funding Mechanisms for Public Transportation. Washington, DC: The National Academies Press. doi: 10.17226/14187.
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Suggested Citation:"Front Matter." National Academies of Sciences, Engineering, and Medicine. 2009. Local and Regional Funding Mechanisms for Public Transportation. Washington, DC: The National Academies Press. doi: 10.17226/14187.
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Suggested Citation:"Front Matter." National Academies of Sciences, Engineering, and Medicine. 2009. Local and Regional Funding Mechanisms for Public Transportation. Washington, DC: The National Academies Press. doi: 10.17226/14187.
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Suggested Citation:"Front Matter." National Academies of Sciences, Engineering, and Medicine. 2009. Local and Regional Funding Mechanisms for Public Transportation. Washington, DC: The National Academies Press. doi: 10.17226/14187.
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TRANSPORTAT ION RESEARCH BOARD WASHINGTON, D.C. 2009 www.TRB.org T R A N S I T C O O P E R A T I V E R E S E A R C H P R O G R A M TCRP REPORT 129 Research sponsored by the Federal Transit Administration in cooperation with the Transit Development Corporation Subject Areas Public Transit • Planning and Administration 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

TCRP REPORT 129 Project H-34 ISSN 1073-4872 ISBN: 978-0-309-11771-5 Library of Congress Control Number 2009900720 © 2009 Transportation Research Board COPYRIGHT PERMISSION 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 published or copyrighted material used herein. Cooperative Research Programs (CRP) grants permission to reproduce material in this publication for classroom and not-for-profit purposes. Permission is given with the understanding that none of the material will be used to imply TRB, AASHTO, FAA, FHWA, FMCSA, FTA, or Transit Development Corporation endorsement of a particular product, 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 any reprinted or reproduced material. For other uses of the material, request permission from CRP. NOTICE The project that is the subject of this report was a part of the Transit Cooperative Research Program conducted by the Transportation Research Board with the approval of the Governing Board of the National Research Council. Such approval reflects the Governing Board’s judgment that the project concerned is appropriate with respect to both the purposes and resources of the National Research Council. The members of the technical advisory panel selected to monitor this project and to review 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 expressed or implied are those of the research agency that performed the research, and while they have been accepted as appropriate by the technical panel, they are not necessarily those of the Transportation Research Board, the National Research Council, the Transit Development Corporation, or the Federal Transit Administration of the U.S. Department of Transportation. Each report is reviewed and accepted for publication by the technical panel according to procedures established and monitored by the Transportation Research Board Executive Committee and the Governing Board of the National Research Council. The Transportation Research Board of the National Academies, the National Research Council, the Transit Development Corporation, and the Federal Transit Administration (sponsor of the Transit Cooperative Research Program) do not endorse products or manufacturers. Trade or manufacturers’ names appear herein solely because they are considered essential to the clarity and completeness of the project reporting. TRANSIT COOPERATIVE RESEARCH PROGRAM The nation’s growth and the need to meet mobility, environmental, and energy objectives place demands on public transit systems. Current systems, some of which are old and in need of upgrading, must expand service area, increase service frequency, and improve efficiency to serve these demands. Research is necessary to solve operating problems, to 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 to meet demands placed on it. The need for TCRP was originally identified in TRB Special Report 213—Research for Public Transit: New Directions, published in 1987 and based on a study sponsored by the Urban Mass Transportation Administration—now the Federal Transit Administration (FTA). A report by the American Public Transportation Association (APTA), Transportation 2000, also recognized the need for local, problem- solving research. TCRP, modeled after the longstanding and success- ful National Cooperative Highway Research Program, undertakes 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, facilities, operations, human resources, maintenance, policy, and administrative practices. TCRP was established under FTA sponsorship in July 1992. Pro- posed by the U.S. Department of Transportation, TCRP was autho- rized as part of the Intermodal Surface Transportation Efficiency Act of 1991 (ISTEA). On May 13, 1992, a memorandum agreement out- lining TCRP operating procedures was executed by the three cooper- ating organizations: FTA, the National Academies, acting through the Transportation Research Board (TRB); and the Transit Development Corporation, Inc. (TDC), a nonprofit educational and research orga- nization established by APTA. TDC is responsible for forming the independent governing board, designated as the TCRP Oversight and Project Selection (TOPS) Committee. Research problem statements for TCRP are solicited periodically but may be submitted to TRB by anyone at any time. It is the responsibility of the TOPS Committee to formulate the research program by identi- fying the highest priority projects. As part of the evaluation, the TOPS Committee defines funding levels and expected products. 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- nating TCRP results to the intended end users of the research: tran- sit agencies, service providers, and suppliers. TRB provides a series of research reports, syntheses of transit practice, and other support- ing material developed by TCRP research. APTA will arrange for workshops, training aids, field visits, and other activities to ensure that results are implemented by urban and rural transit industry practitioners. The TCRP provides a forum where transit agencies can cooperatively address common operational problems. The TCRP results support and complement other ongoing transit research and training programs. Published reports of the TRANSIT COOPERATIVE RESEARCH PROGRAM are available from: Transportation Research Board Business Office 500 Fifth Street, NW Washington, DC 20001 and can be ordered through the Internet at http://www.national-academies.org/trb/bookstore Printed in the United States of America

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. C O O P E R A T I V E R E S E A R C H P R O G R A M S

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. F O R E W O R D By Dianne S. Schwager Staff Officer Transportation Research Board

C O N T E N T S 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

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 (2000–2006)

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TRB’s Transit Cooperative Research Program (TCRP) Report 129: Local and Regional Funding Mechanisms for Public Transportation explores a series of transit funding mechanisms with a primary focus on traditional tax- and fee-based funding; and common business, activity, and related funding sources. The report includes an online regional funding database that provides 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 transportation. A user manual for the database is also available online.

Note: The database is a very large file and may take some time to download.

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