For the first time in years, long-term federal funding for public transportation projects is available to states and local communities. However, this funding only covers a portion of public transit project costs. Cities, counties, and states must also contribute taxpayer dollars. Local governments can also partner with private-sector companies to offset the initial costs.
Many public transit projects now are funded through these public-private partnerships or P3s. Bringing the funding for a specific project together can often look like putting together a puzzle — trying to make all the pieces fit just right so that riders, taxpayers, and communities get the most out of their investment.
The Need Is Significant — and Growing
National Infrastructure Week (May 16-23) saw business, labor, and community leaders from around the country participating in some 150 events to bring attention to the need to invest in America’s infrastructure, including public transportation.
Heads of public transit systems of all sizes underscored the need to move forward with investments in America’s “crumbling” public transportation infrastructure. Valarie J. McCall, chair of the American Public Transportation Association (APTA) and a board member of the Greater Cleveland Regional Transit Authority (GCRTA), said this issue “demands attention at all levels of government so that public transit can continue to help grow communities and businesses.”
State and Local Governments Apply for FAST Act Grants
For the most part, the FAST Act funds public transportation projects by providing grants to states.
State and local governments must detail how they will provide matching funds. Some grants require states and municipalities to provide 50 percent or more of a project’s funding. In other instances, federal funding may cover the majority of a project’s costs.
Raising State and Local Money for Transportation Projects
State and local governments rely on a wide range of funding mechanisms to pay for local public transportation projects, including:
- Sales taxes
- Fuel taxes
- Property taxes
- Payroll taxes
- Vehicle fees
State legislatures may also tap dollars from general funds to pay for transportation projects.
Alternative and Innovative Funding Options
People are driving less and cars are more fuel-efficient, so the traditional gasoline tax is less reliable as a source of revenue for funding transportation projects. Congress included in the FAST Act a $95 million competitive grant program for states to develop alternative funding options for transportation. As we look ahead to the November elections, and beyond, we’ll be looking more closely at some of the ways state and local governments are experimenting with different funding sources.
Several states have already entered into P3 agreements to improve and expand public transportation. For example, Maryland recently contracted with several private companies to design, construct, operate, and maintain, as well as to help finance, a major new light rail line. P3s are not feasible for every public transportation project, but they do provide another option that brings funding and additional expertise to the table.
What You Can Do to Help Your Community Move Forward
Whether you ride public transit, we encourage you to participate in local discussions about public transportation projects and funding.
Regional and state departments of transportation often hold public sessions where plans are discussed, and the public has opportunities to weigh in. You can also communicate your views about public transportation to state legislators, city council members, and other officials involved in planning and allocating funds for public transportation.
Voices for Public Transit members can also directly support public transportation funding by voting in favor of local and state transportation ballot measures. In recent years, many cities and regions have passed measures to raise money for public transportation. In November, several other areas are expected to have transportation funding initiatives on their ballots.
According to our community poll, 68.5% of Voices for Public Transit members have seen local transportation-related ballot measures arise in their communities. Of those measures, bus systems, light rail/streetcar, and roads/bridges seem to be the most commonly addressed forms of transit.
As implementation of the FAST Act continues, we will see more public transit projects being proposed or breaking ground nationwide. Be on the lookout in your area!