This report addresses the current state of funding for public transportation in the United States, the various circumstances that have contributed to today's funding environment, and specific strategies that transit agencies are pursuing to identify new sources of funding. The report is presented in two parts—a final report and a casebook. The former provides a national perspective on public transportation funding while the latter presents case-level information on innovative methods for generating revenue for public transportation capital and operating costs. The report will be of interest to federal, state, and local transportation officials, policy makers, and professionals concerned with funding for local public transportation services during the past decade and in the near future. This report is the culmination of the work performed under TCRP Project H-7, Funding Strategies for Public Transportation. The project was initiated to examine and summarise trends in public transportation revenue, expenditures, and funding. The objectives of this project were to (1) define and assess the current state of funding, in particular operating funding, for public transportation in the United States; (2) examine the performance of public transportation systems in the United States in light of expanding goals, expressed through recent federal mandates (e.g., the Americans with Disabilities Act of 1990, the Clean Air Act Amendments of 1990, Buy America requirements, and welfare to work legislation) coupled with declining federal assistance for transit operations; and (3) identify strategies transit agencies have been pursuing that address the need to identify new sources of funding for operating and capital expenses. The findings of this project indicate that, between 1989 and 1994, total operating and capital funding levels for public transportation kept pace with inflation and overall service levels increased. This occurred despite a virtual freeze in federal operating assistance at about $800 million during a period with 18.8 percent inflation. Many transit agencies in the United States have found alternatives to federal operating funding and have reduced costs. Agencies have turned largely to the farebox and to dedicated funding sources at the state, local, and jurisdictional levels. It is unclear what effect the most recent decreases in federal operating assistance (which are not reflected in the data used for this analysis) will have and whether or not alternative funding sources can continue to make up for a declining federal share. Transit agencies that have increased service levels during the past decade have generally expanded mandated or newer services (e.g., demand response and light rail) at the expense of more traditional modes (e.g., commuter rail, heavy rail, and bus). The casebook presents 17 case studies of financing techniques used successfully by U.S. transit systems to improve their financial conditions. The cases, which address both capital and operating needs, are presented in two main categories: funds generated through external funding sources and transit-agency-generated funds. The case studies of funds generated through external sources include examples of dedicated local taxes, transit impact fees, creative use of federal funds, state infrastructure banks, and revolving loan funds. The case studies on transit-agency-generated funds address capital expenditures, fare revenue enhancement, and creative use of transit assets and describe successful experiences with 12 different strategies (e.g., advance construction authority, cross border leasing, partnerships with the community, and leasing right-of-way). (A)
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