Finding Solutions to Fund Transit: Combining Accountability And New Resources For World Class Public Transportation

8/6/2007

Executive Summary

State legislators face a difficult task in providing funding for future transportation needs. The recent collapse of the Minneapolis Bridge, underscores the need to prioritize maintenance above new road building, and the importance of public transit as a way to reduce the need for both maintenance and new roads over the long term.

The public need and demand for transit will grow sharply in the future and transportation funding must become better targeted to future needs. America has done a great job building a complete road network, but a really insufficient job developing transit networks and investing in maintenance. It’s time to put the same effort we put into building new roads to work with a new emphasis.

Transit will be crucial because it helps solve multiple threats to our quality of life such as oil dependence, traffic congestion, and global warming. Enhanced transit will also make America healthier and more competitive. The current U.S. population of 300 million is projected to reach 400 million by 2040.[1]  Many of the metropolitan areas with the fastest projected growth have underdeveloped or under-funded transit systems that need substantial resources to contend with growing challenges such as traffic congestion, oil dependency, and global warming.

This paper explains why lawmakers should turn to new dedicated revenues to provide long-term solutions while increasing market efficiency and reducing social costs. Legislators should avoid short-term band aids from the general budget or one-time gimmicks such as road privatization.

Transportation funding should also be better targeted. The federal government should shift toward “Fix It First” policies that prioritize highway maintenance and reform current rules that are skewed against transit. States should address backlogs of deferred repairs and aggressively expand transit for the 80 percent of Americans that live in urban areas that cover less than 3 percent of America’s land area.[2] Transit agencies themselves will need to step up performance and become more accountable by benchmarking and publicly disclosing route ridership, on-time performance, and average speed.

The good news is that Americans are already turning to rail and other public transportation. Public transportation ridership reached 10.1 billion trips in 2006, a growth of 30 percent since 1995. This impressive rate outpaces the 12 percent growth of our population as well as the 24 percent growth in highway travel during this period.[3] In fact 2006 was the first time in 26 years that drivers cut back on the number of miles they drove on average. Motivated by worsening traffic congestion, high prices at the pump, a desire to cut global warming pollution, or just the pleasure of reading the newspaper on the way to work, Americans have proven ready to use transit when they have the option.