FINANCING PUBLIC TRANSPORTATION

The maintenance and improvement of already existing transit system is identified as the issue facing the industry to-day. State and local government efforts which currently subsidize public transportation fall short of the total revenue needed to maintain good service. The federal government in recognition of its responsibility to assume a major role in transit in urban areas, has made capital outlays for purchase and improvement of public transport systems. The need is emphasized for an administratively workable program in which federal funds will be distributed through state and local agencies on the basis of number of passengers carried. The most desirable mechanism for implementing an operating expanse subsidy is one that recognizes the subsidy effort that is already being made by state and local governments. A matching share ratio in federal-aid programs for urban transit may be mandated in the program as an integral part of the financing mechanism. Critical questions concerning the operating subsidy are discussed. The interrelation of service cost and the quantity and quality of service is outlined as well as the role of local, state and federal governments in setting standards, funding and administration. The most effective supervision would be at the state and local levels. The federal role should be limited to that of distributing funds to public agencies on the equitable and adjustable basis of the number of passengers carried. The subsidy is not forseen to cause a change in the basic ground rules of the collective bargaining process. The fare-box revenues are seen to be of continued importance in the financing of transit operations. The paper also briefly reviews the history of public transportation in the U.S. and describes the experience of New York City with transit financing.