Business Logistics 420 Public Transportation Spring 2001 Lecture 11: State and Local Funding Programs for Transit

Lecture Objectives Illustrate that state and local responses to transit funding issues vary greatly from community to community Provide example of comprehensive state funding program -- Pennsylvania

Overview of State and Local Funding Public financial support for transit started at the local level, then at the state, and finally the federal level. Public support for transit dates back to the early 1900s with local government support for subway construction in large cities Seattle Transit has been public since the 1920s Chicago Transit Authority formed in 1947 Widespread state and local support started in late 1960s s

Features of State and Local Funding Programs State and local programs generally mirror the federal programs and are designed to provide needed match For example, federal government provides 80 percent of capital costs, many states have programs to split the other 20% with local governments Source of state/local funds varies significantly among states/localities and is a function of state law, history, politics

State Roles in Addition to Funding State enabling legislation determines – how transit agencies are organized, governed –what taxes can be used to support transit States often provide in-kind benefits such as free vehicle registration, exemption from fuel taxes States provide technical assistance and planning funds

Pennsylvania’s State Transit Program The Commonwealth of Pennsylvania is a major funding agency for all forms of public transit –first transit funding legislation –in fiscal 1999 PennDOT provided more than $720 million capital and operating assistance to urban areas

Types of Organizations Funded in Pennsylvania 22 Urban Transit Systems 22 Rural Transit Systems 60 Community Transit-- shared-ride systems About 6 intercity bus operators AMTRAK Non-profit agencies serving disabled persons

Pennsylvania Transit Funding Programs Capital Assistance -- 1/6th total cost Operating Assistance -- formula based on historical needs -- about $250 million in 1999 Free Rides for Senior Citizens on Fixed-Route systems -- Pays transit fare Reduced fare on shared-ride systems -- pays 85 percent of fare Planning and technical assistance grants

Formulas Used to Distribute Operating Funds Political deal (based on historical trends) –SEPTA gets 70.3% of the appropriation –PAT gets 25.4% of the appropriation –Other urban areas share depends on % funding in (as base funding) % federal funds % vehicle miles % vehicle hours % passengers

Transit Funding Is Complex Note: CAOE is Capital Assistance for Operating Expenses

Pennsylvania Transportation Assistance Fund (PTAF) First dedicated transit funding in Pennsylvania Distributes income from these sources to transit systems based on formula –$1 per tire sold in Pennsylvania –$2/day tax on motor vehicle rentals –6% sales tax on periodicals –3% sales tax on lease of vehicles –12 mill tax on the Public Utility Reality (PURTA)

Study Questions Briefly describe PennDOT’s funding programs for local transit agencies What are the pros and cons of a dedicated funding program like PTAF How are state and local shares of transit capital and operating assistance determined?