Transportation for America has recently published the most comprehensive document on transit project funding I’ve ever read (warning, large PDF file). It’s extremely wonky, with explanations for a myriad of different financial instruments and federal grants, information on the pros and cons of different local revenue sources (sales taxes, user fees, property taxes, etc.), and data for how ballot measures pass with each combination. There’s also a few really interesting examples from projects whose funding has been secured over the past few years.
I won’t try to sum up an 80 page report like this in a short blog post, but I would like to point to a few things that really jumped out at me. For one, the funding sources that are least popular with voters are car license fees and sales taxes, which happen to be precisely the funding sources that have been available to transit projects around the Puget Sound area. On the other, the most popular mechanisms – fuel taxes and income taxes – are completely disallowed here. Also, Denver is paying for a remodel to their Union Station partially with tax-increment financing and the DC area is paying for part of its Dulles Metro line with roads tolls and a special tax district, so creative financing really is possible: you don’t have to build a whole bus and rail system on sales tax alone.
With the federal government in an austerity mood, it’s going to be ever more important for local agencies to come up with creative ways to fund transit projects. It’s an interesting report, and this is good background for those eventual conversations.