Business Logistics 420 Public Transportation Spring 2001

1
Business Logistics 420Public TransportationSprin
g 2001

• Lecture 11 State and Local Funding Programs for
  Transit

2
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

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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 -- 1970s

4
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

5
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

6
Pennsylvanias State Transit Program

• The Commonwealth of Pennsylvania is a major
  funding agency for all forms of public transit
• first transit funding legislation -- 1967
• in fiscal 1999 PennDOT provided more than 720
  million capital and operating assistance to urban
  areas

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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

8
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

9
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 1990-91 (as base funding)
• federal funds
• vehicle miles
• vehicle hours
• passengers

10
Transit Funding Is ComplexNote CAOE is Capital
Assistance for Operating Expenses
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Pennsylvania Transportation Assistance Fund (PTAF)

• First dedicated transit funding in Pennsylvania
  -- 1991
• 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)

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Study Questions

• Briefly describe PennDOTs 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?