1. Funding Models for Public Transit Authorities Paul Larrousse
Module 2 – Lesson 2
Funding Models for Public R Transit Authorities
Funding Models for Public Transit Authorities
Paul Larrousse
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2. Multiple Funding Sources
Federal Funds primarily from the Federal Transit Administration but also from Federal Highway Administration
State Funds
Local Funds
FTA provides in excess of $11 billion per year in transit funding in multiple category. Some funds are based on formulas while others are discretionary in nature.
Many states provide funding of operations and/or capital purchases. The number of states that do so in not a majority and largely representative of the more urban states.
Local funds are derived from many different sources. The authorization for levying these funds is generally a function of state legislation.

3. Bay Area Rapid Transit Sales tax and property tax
The Bay Area Rapid Transit System is the heavy rail system that serves the San Francisco bay region. It is funding by a combination of sales taxes and property tax. The property tax was the main source of revenue that built the original system.

4. Golden Gate Bridge, Highway, and Transportation District
50% of bus and ferry expenses from surplus bridge tolls
This district is a multi-modal operation. While the most famous asset is the Golden Gate Bridge, the district operates buses and ferries from counties north of San Francisco to San Francisco. The transit operations are funded by surplus bridge tolls.
Bridge and tunnel tolls are also used to fund transit services by the NYMTA.

5. SamTrans 0.5% sales tax Also administers Caltrain
SamTrans is the San Mateo County Transit District immediately south of San Francisco. They have a sales tax. They are also the administrative entity for Caltrain, the 3 county commuter rail service that operates on the San Francisco peninsula. The sale tax funding is used to pay San Mateo’s share of the Caltrain operation.

6. Colorado Regional Transportation District
Sales tax of 0.6% increased to 1% for FasTracks construction
3% discount for timely payment of sales tax revenue
The RTD originally had a sales tax that was set by voter referendum of 0.6%. The RTD asked the voters to raise the tax to a full 1% to fund the FasTracks program which is the major expansion of rail services in the Denver area. The voters approved this increase.
The note on the 3% discount for timely payment is interesting. This probably was done since tax collections lagged in some cases. This serves as an incentive for those collecting the tax to receive a benefit from timely transmission of the receipts.

7. Illinois Citilink Voter approval of tax
Citilink is the Peoria area bus system. Voter approval of any tax to support transit operations is required.

8. Indiana
CityBus
Taxing district that is larger than service area and includes suburban areas in Tippecanoe County
CityBus is the Lafayette bus system. This illustration shows that the taxing district is larger than the service area. This is sometimes the case where there is a perceived benefit for having transit services in the broader region even if service is not provided in every part of the service area.

9. Massachusetts Worchester Regional Transit Authority
Commonwealth provides large share of operating expense
Cities served pay assessment
Except MBTA, all operators and maintainers must be private employees
Massachusetts is a state that provides a large share of the operating and capital expenses for its transit agencies. While there is a local share, it is very small compared to most other states.
An interesting note is that outside of the MBTA in Boston, all Massachusetts transit agencies operators and maintainers must be employees of private entities and not public sector employees. This is done with the belief that this would be a cost savings and efficiency move.

10. Michigan Capital Area Transportation Authority
Combined with MSU system, which funds services
Renewable millage
CATA has 2 primary local sources of revenue. The first is a local property tax millage that is periodically renewable by the voters. This means that CATA has to convince the voters on a regular basis that they are operating efficiently and cost effectively and provide a service that is essential in the community. This can be both a carrot and a stick. A carrot since the transit agency has to be well managed and operated (witnessed by CATA winning America’s Best from APTA). A stick because voters and politicians can use the millage renewal as a way to get CATA to fulfill an agenda that is not consistent with good operation.
Michigan State University is the second funding source. They pay CATA to operate the campus bus network as part of the CATA system and for access to the CATA system at large.

11. Nebraska Metro Area Transit
Tax levy on all tangible and real personal property in the City of Omaha
Service contracts outside of Omaha and cannot use Omaha levy
Omaha levies this tax within its corporate limits. In this particular case, the levy cannot be used for any services outside the city limits. This means, even if the service outside the city limits is of great benefit to Omaha residents, it must be paid for by another public or private entity.

12. New York Capital District Transportation Authority
Gross receipts tax on oil and gas companies levied by NYS
Mortgage recording fee
These 2 funding sources are used to fund the Albany transit system and others in NY state. The issue with these funds are that they are affected by circumstances that the transit agency has no control over. This can have a major impact on the service level that the agency can provide.

13. North Carolina Charlotte Area Transit System Sales tax
The system is funded by a sales tax.

14. Ohio Southwest Ohio Regional Transit Authority
3/10 of 1% of earnings tax collected by City of Cincinnati on everyone who lives and works in the city
The earnings tax is levied only in the City of Cincinnati. The service is provide to a much broader area in Hamilton County. Hamilton County also has the final appointment authority for board members even those nominated by the City of Cincinnati. Cincinnati can veto fare increases. The issue here is how the revenue is provided but the oversight of the transit agency is set up. The two are not in sync which can and does lead to friction and conflicts.

15. Oregon Lane Transit District
.0064% ($6.40 per $1,000) of wage paid by an employer and the net earnings from self-employment
This is a wage based tax paid by employers and the self-employed. This tax is highly impacted by the economy. In periods of recession, the level of transit service can be greatly affected.

16. Cherriots – Salem-Keizer Transit
Property tax levy approved by voters

17. Texas Capital Metropolitan Transportation Authority 1% sales tax
Each major transit agency in Texas has its own enabling legislation passed by the Texas legislature. The legislature has changed transit authority make up and responsibilities from time to time which can lead to uncertainty and unpredictability in planning for the future.

18. Dallas Area Rapid Transit
1% sales tax

19. Metropolitan Transit Authority of Harris County, Texas
1% sales tax
Has major role for arterial streets and freeways
Houston Metro has plays a major role in the road network making a true multimodal operation.

20. Washington
Spokane Transit Authority
Sales tax

21. Key Observations

22. Funding Multiple funding sources exist
Funding can be unpredictable based on the economy
Renewal can be both a carrot and a stick