Transportation funding structures and policies

The transportation enterprise in the United States relies heavily on federal funding of highways, transit, and airports. Consideration of changes in federal funding policies over the past decade or so, and the effects of those policies, suggests that the way programs are financially structured can be critically important. The present analysis leads to recommendations concerning the selection of the federal matching ratio, tradeoffs between categorical and block programs, and the use of formula or discretionary allocations. It highlights the importance of ascertaining programmatic intent in establishing funding policies, as well as the need for sensitivity to the fiscal climate.     

Changing relationships in the financing of elderly and handicapped transportation services

This paper reports the results of a national survey of providers of specialized transportation services who are recipients of UMTA Section 5 or Section 9 funding and report owning demand responsive vehicles (Section 15 report). The study reports a variety of service measures, financial data, cost containment activities and related information for fiscal years 1980 and 1982. For a limited number of systems, financial data for fiscal year 1984 are also reported. Analysis of the data indicates a general but as yet uncertain trend towards declining UMTA participation in funding these systems, increased fares and increased usage of cost containment and cost reduction techniques by the responding systems. Should the reported trends continue, then the responding systems could be expected to have financial difficulty in complying with the currently proposed regulations for the enforcement of Section 504 of the Rehabilitation Act of 1973.     

An integer goal programming model for solving the capital allocation problem of metropolitan mass transportation agencies

In order to maintain an efficient public mass transportation system in an urban area large capital expenditures are generally required. However, due to changing attitudes and priorities on the part of local, state and federal governments, funding for such public transportation systems is being curtailed. As such, it is imperative that the funding that local transportation agencies do receive be allocated for capital expenditure items in the most efficient and satisfactory manner possible. In this paper, integer goal programming is demonstrated via a case example as a means for achieving a satisfactory allocation of funds for capital expenditures.     

The redistributive effects of reduced transit fares for the elderly

Redistributive effects concern which socioeconomic groups pay for a particular program and which socioeconomic groups benefit from it. Considering the off-peak reduced farefor senior citizens required by UMTA Section 5 funding, an analysis of the resulting financial implication is the first step in examining any redistribution. Knowledge of the number of rides switched from peak to off-peak times, the number of new off-peak rides generated and any cost changes are necessary. It appears that such a policy will likely lower net revenue. If the loss is not reimbursed, a redistribution from non-elderly and peak riders to the elderly users will result; if reimbursement is available, a different result will be obtained. A survey of the literature fails to establish whether reducing fares is preferable to directly transferred income as a means of redistribution. It is concluded that off-peak reduced fare is more efficient than reduced fare at all hours. Finally, the redistribution due to the reduced fare funding mechanism used in Illinois appears to favor the poor.     

Mobility evaluation for urban public transportation

Summary

This paper has reported on a study of relative opportunity—not absolute opportunity. Minimum absolute standards for mobility or accessibility are difficult to justify. Some additional study into the development and application of absolute mobility standards may be warranted.

The application of the mobility evaluation model has primarily focused upon a corridor line‐haul system. Conclusions suggest that such a system will not markedly improve existing transit mobility levels in either the peak hour or the off‐peak. The experimental work has verified this conclusion, and more importantly, it has detailed quantitatively the exact levels and spatial distribution of mobility improvements. However, this study does not include a comprehensive analysis of all methods of mobility enhancement, nor does it undertake a comparison of alternative means of mobility improvement. Certainly other methods to improve access to opportunities should be explored before policy considerations are finalized. These methods include other transit solutions, land use alternatives, socio‐economic policies, and other‐mode transportation alternatives. The accessibility technique and mobility indices approach appears to have general applicability in the analysis of optimal strategies for system evaluation.

Of interest is an examination of alternative feeder transit systems to the corridor line. Additional research with the model might point out the maximum mobility effects expected through improved collector service in the suburbs, with corridor line‐haul to the CBD.

The indices are also readily available for a comparison of mobility patterns for different urban areas. Application of the program to transit and socio‐economic data for a set of cities would yield an indication of the relative mobility levels provided. Such data might be considered as an evaluation criterion for future transit funding by federal officials.

In addition, the model is currently being considered by UMTA as a tool to aid in the evaluation of the equitable distribution of transit system benefits as defined in Title VI of the Civil Rights Act of 1964.²⁵ The mobility output would serve as an indicator of the levels‐of‐service provided to certain disadvantaged urban groups. For this application the computer model is being altered to achieve compatability with the Transportation Planning System (UTPS) computer model package developed by UMTA.     

Financing congressional earmarks: Implications for transport policy and planning

This research documents the primary strategies used by the US Congress to fund transportation earmarks from the early 1990s to the mid-2000s. It draws on careful analysis of funding bills and primary and secondary sources including government reports, industry and policy newsletters, scholarly articles, and publicly available data on earmarks. It is also informed by interviews with transportation stakeholders involved with earmarks at federal, state, and regional levels. By detailing how Congress pays for earmarks, I show that earmarks do more to redistribute than add to existing transportation resources, and that the intricacy of Congressional funding maneuvers can make earmarks’ fiscal impacts hard to discern. Several implications follow for transportation policy and practice. First, critiques that earmarks increase federal transportation spending are misplaced. While such claims make it easy to discredit national investment in transportation, skepticism is in order when earmarks are invoked to throw out the baby with the bathwater. Second, earmarks’ true costs are related not to increased deficits but rather to opportunity costs incurred when unplanned earmarks replace other investments, particularly projects identified through regional and state planning or competitive selection by an executive agency. Finally, this work suggests productive directions for future earmark reform, such as limiting earmarks to projects in regional or state plans and making explicit for any earmarks in a bill the funding mechanisms that support them. Such steps could lessen the opportunity costs (and administrative inefficiencies) of earmarks, increase transparency in earmarking, and potentially make the practice less objectionable if used to facilitate passage of the long overdue surface transportation authorization bill.     

The effects of federal transit subsidy policy on investment decisions: The case of San Francisco's Geary Corridor

In the United States, federal funding for public transit often accounts for a large proportion of a local agency's budget, especially for capital investments. For this reason, local governments can be expected to plan a portfolio of projects that maximize federal contributions. This study examines the financial effects of federal transit subsidy policy on local transit investment decisions. Data from a System Planning Study for the Geary Corridor in San Francisco are used as an illustration. It is found that federal transit subsidy policy provides financial incentives for local decision-makers to select capital-intensive investment options that may not be efficient or effective. While federal financial incentives are not the only factor influencing local investment decisions, some reform of the current subsidy policy may be necessary to reduce the incentive for ineffective use of public resources.     

Evaluation of Rail Freight Facilities Grant Funding in Britain

Abstract

Rail freight has been generally in decline in many European Union countries in recent years, contrary to European transport policy. State support for railway operations is commonplace in most countries, and this paper establishes the background to targeted rail freight grant funding in Britain. Through desk‐based analysis of Freight Facilities Grant (FFG) awards, together with a survey of recipient companies, the paper assesses the extent to which the planned flows expected from these awards have materialized and it evaluates the role of the grants in influencing rail freight volumes. The evidence suggests that FFG funding has been largely successful, attracting considerable private sector investment. Overall, FFGs have played an important role in developing or retaining rail freight flows, although the processes could be made more transparent and consistent. As other European countries liberalize their rail freight markets as a result of European Union legislation, such targeted funding may be an appropriate alternative to more general government subsidy of freight operations.     

Energy savings in transport

A decade of increasing Federal attention to urban transportation needs has culminated in the 1970 Urban Mass Transportation Assistance Act. This Act is intended to provide 10 thousand million dollars over the next 12 years in Federal assistance money to urban public transportation systems. This paper examines the needs of selected U.S. cities as a basis for (1) understanding the vast, various and complex transportation needs of urban areas throughout the country, and (2) assessing the sufficiency of these funds. The sample cities have been placed into three broad categories based on the state of development of their transportation systems. In Category I cities, the essential need is to ensure the survival of bus systems for the use of non‐drivers, or to provide some other viable alternative to the automobile; in Category II cities, the primary needs are to relieve auto congestion and to improve public transportation components, while in Category III cities, the primary need is massive investment to improve and to extend public transportation facilities. It is concluded that the presently intended Federal funding level for transportation will not meet the financial requirements of the Category III cities.     

Donor states and donee states: investigating geographic redistribution of the US federal-aid highway program 1974–2008

In 2009, the US government spent more than $42 billion on the federal-aid highway program. Most of this money was raised from motor vehicle taxes, whose proceeds are deposited in the highway trust fund. Federal motor vehicle user taxes flow into the fund and aid expenditures flow out from it to build and maintain highways and other transportation infrastructure. With so much money at stake it should be no surprise that expenditure decisions are the subject of intense political debate. Chief among these debates is the conflict between donor states, whose residents pay more in highway user taxes than the state receives in federal highway aid and donee states, whose residents pay less in highway user taxes than the state receives in highway aid. While this geographic redistribution has been masked recently by infusions of general fund revenue into the trust fund, the debate nevertheless continues. This paper attempts to understand why some states are donors and others are donees by simultaneously testing four hypotheses about the geographic redistribution of federal highway dollars that relate to a state’s highway need, economic condition, level of urbanization, and representation on the key Congressional oversight committees. The analyses show that redistribution does not favor states with larger highway systems, more highway use, or lower median incomes, all of which are different indicators of need. Instead, states that are less urban and better represented on the four key Congressional committees generally benefit from redistribution. These findings indicate that the user tax revenues are not used in places where they are most needed. Thus they provide little empirical support for any compelling policy argument for continued geographic redistribution of federal highway user tax dollars.     

Transportation survey and rideshare matching model for rural communities

A simple and flexible low technology rideshare matching model was developed for a rural area. A brief survey form provided information on distance to work, fuel consumption and currently used transportation mode in conj unction with information on employment location and work schedule. The model developed used a computerized system for proximity matching of potential ride sharers. An existing computer program with detailed modifications was used for data analysis. Unlike other rideshare matching programs, this model relies on grouping by community names to match riders.     

Highway finance and the private sector: Issues and alternatives

Private participation in all aspects of transportation has been prevalent throughout the history of the United States. The U.S. approach to transportation finance evolved from European influence. Particularly, the English economist Adam Smith described the role of public works in facilitating national commerce. The notion of user charges or tolls as opposed to general revenue as the source of financial support was offered as a means for constructing and maintaining roads. Highway and transportation development has undergone significant changes in the last few decades. The 1970s ushered in an era of escalating costs of highway development and maintenance. Dependency on imports of foreign oil, global economics, and related events affecting the supply and demand of motor vehicle fuel have had dramatic effects on contemporary means of funding highway programs in the U.S. In responses to this funding dilemma states highway officials began exploring various alternatives for funding transportation improvements. The role of transportation agencies has changed in emphasis since the 1950s. A variety of financial, legal, and logistical issues have forced governments to closely evaluate options for transportation development and finance. State responses to these issues vary. However, there remain a variety of funding alternatives including financing districts, impact fees, tax increment financing, toll financing, and private sector funding.     

Joint development at transit stations in the United States

Joint development, as the term is generally used in connection with transit systems in the United States, is real estate development that is closely linked to public transportation services and station facilities, and takes advantage of the market and locational advantages provided by them. Research conducted by LEK Associates for the Urban Mass Transportation Administration (UMTA) suggests that, in addition to helping shape urban growth and land development, joint development is also a surprisingly effective means of increasing transit system ridership and farebox revenues, as well as a source of increasingly significant revenues from the sale or lease of air rights.The completion of nine joint development projects in as many different cities, started under the former Urban Initiatives Program, for example, net additional annual ridership might reach 12000000 one-way trips. Net additional annual farebox revenues might reach over $9000000. This added revenue would be sufficient to repay the $62 million combined UMTA/transit operator investment in the nine projects, exclusive of the costs of the basic transit system improvements around which the projects are planned, in less than six years.Among transit authority-administered joint development programs examined in a separate study, the Washington Metropolitan Area Transit Authority (WMATA) has had the most success in generating significant value capture income. For example, the cumulative revenue realized by WMATA from just six joint development projects in the Washington, DC region, through September 1983 exceeded $ 6.9 million. Projections through fiscal year 1986 indicate cumulative revenues approximating $ 28 million will be received from developer leases.     

Decision making processes governing federal expenditures within the transportation sector of the United States

The current process for allocating federal funds within the transportation sector of the U. S. is dominated by concerns for territorial equity, administrative feasibility, technical feasibility, and national defense. Economic efficiency as a long range objective is conspicuous by its absence except insofar as it is embodied in the desire to promote the commerce of the nation.Federal allocations for highways, waterways, and maritime subsidies are declining relative to urban public transit, and Coast Guard navigation related expenditures. Environmental considerations and obvious failure in the case of maritime subsidies appear to be the major reasons. Airport and airway allocations will be subject to the same negative forces.The next massive transportation program to appear in the federal budget other than urban public transit is likely to involve the national railway system. The big question here is how the money will be handed out. Economists and planners so far appear to have had little interest or impact in this difficult and crucial area of public decision making.Former Senior Economist, Policy and Plans Development, Office of the Assistant Secretary for Policy and International Affairs, U. S. Department of Transportation. Presently Advisor to the Government of Ethiopia with the Harvard University Development Advisory Service.     

Evaluating the public investment mix in US freight transportation infrastructure

This research empirically evaluates the public sector investment in the US freight transportation infrastructure. In particular, the infrastructures to support the two most comparable modes of freight transportation – highway and intermodal rail – are examined as alternatives for public fund allocation. Indicators for public sector transportation infrastructure investment mix are established based on financial analysis of both private and social costs and benefits, as well as the propensity of freight shippers to utilize such infrastructures. The research results in recommendations for the aggregate allocation of public funds in the US based on these indicators. We find that approximately a quarter of truck freight could be handled at a 25% lower cost if rail infrastructure to support it existed. Because an additional 80% reduction in social costs could be achieved through this modal conversion, the public sector is a critical participant in creating a more efficient transportation infrastructure.     

An optimization framework for workplace charging strategies

The workplace charging (WPC) has been recently recognized as the most important secondary charging point next to residential charging for plug-in electric vehicles (PEVs). The current WPC practice is spontaneous and grants every PEV a designated charger, which may not be practical or economic when there are a large number of PEVs present at workplace. This study is the first research undertaken that develops an optimization framework for WPC strategies to satisfy all charging demand while explicitly addressing different eligible levels of charging technology and employees’ demographic distributions. The optimization model is to minimize the lifetime cost of equipment, installations, and operations, and is formulated as an integer program. We demonstrate the applicability of the model using numerical examples based on national average data. The results indicate that the proposed optimization model can reduce the total cost of running a WPC system by up to 70% compared to the current practice. The WPC strategies are sensitive to the time windows and installation costs, and dominated by the PEV population size. The WPC has also been identified as an alternative sustainable transportation program to the public transit subsidy programs for both economic and environmental advantages.     

Mass transportation needs and financing in the United States

The U.S. Department of Transportation (1974) recently completed a comprehensive study of mass transportation needs and methods for financing these needs. Using information from the 1974 National Transportation Study, the study determined the level of capital and operating funds that would be required to implement the 1972–90 long-range plans and 1972–80 short-range programs of the states and urbanized areas. It then analyzed various funding mechanisms at state and local levels for financing their portions of these plans and programs.It was found that urban areas, in general, not only plan to stabilize transit fares in the face of rising costs, but also intend to put $ 23.6 billion into capital investments through 1980 and an additional $ 34.6 billion through 1990. Of the total $ 58.2 billion in capital expenditures by 1990, 63% would be expended by the nine largest urbanized areas; 27.8% by the New York area alone. Rail transit and commuter railroad costs would account for 90% of the nine largest urbanized areas.States and localities would be able to carry the financial burden of mass transportation improvements, even if the proposed 1980 programs were implemented in their entirety, given current levels of Federal assistance. However, there would have to be a substantial financial commitment from the states and localities and some hard decisions made by them about public expenditure priorities, fare policies, and taxation levels, and policies to discourage automobile usage. This underscores the need for careful review of their overall plans and programs by state and local officials before making financial commitments.     

Cost-effectiveness of reductions in greenhouse gas emissions from High-Speed Rail and urban transportation projects in California

A rising trend in state and federal transportation finance is to invest capital dollars into projects which reduce greenhouse gas (GHG) emissions. However, a key metric for comparing projects, the cost-effectiveness of GHG emissions reductions, is highly dependent on the cost-benefit methodology employed in the analysis. Our analysis comparing California High-Speed Rail and three urban transportation projects shows how four different accounting framings bring wide variations in cost per metric tonne of GHG emissions reduced. In our analysis, life-cycle GHG emissions are joined with full cost accounting to better understand the benefits of cap-and-trade investments. Considering only public subsidy for capital, none of the projects appear to be a cost-effective means to reduce GHG emissions (i.e., relative to the current price of GHG emissions in California’s cap-and-trade program at $12.21 per tonne). However, after adjusting for the change in private costs users incur when switching from the counterfactual mode (automobile or aircraft) to the mode enabled by the project, all investments appear to reduce GHG emissions at a net savings to the public. Policy and decision-makers who consider only the capital cost of new transportation projects can be expected to incorrectly assess alternatives and indirect benefits (i.e., how travelers adapt to the new mass transit alternative) should be included in decision-making processes.     

The influence of employer ridesharing programs on employee mode choice

Employer ridesharing programs and employee mode choice were analyzed using Southern California data. Problems in estimating the costs and benefits of employer ridesharing programs were identified. Surveyed firms used a wide variety of information to estimate employee mode split internally. Virtually all surveyed firms offered free or subsidized parking to some or all of their employees. Few responding firms estimated the cost of providing employee parking accurately, if at all. Despite these significant data limitations, factors influencing firm choice of employer ridesharing program components were identified. The influence of employer ridesharing programs on employee mode choice was modeled using weighted least squares logit regression analysis. Firm size was foung to be the single most important variable identified in the analysis. Larger firms were more likely to offer ridesharing incentives to their empolyees, and to report direct employer benefits from ridesharing. Alternative work hours hindered the formation of ridesharing arrangements in some cases. Relatively few firms promoted ridesharing on a purely voluntary basis. A private market for employer ridesharing services was found to exist, however. Personalized matching assistance may be a critical factor in developing more effective employer ridesharing programs. Parking pricing and supply control measures probably would have a larger impact on employee mode split overall. Parking management faces severe obstacles in implementation, some of which might be overcome through the more extensive provision of ridesharing services, such as personalized matching assistance. to employees at specific employment sites by their employers.     

Performance indicators for public transit connectivity in multi-modal transportation networks

Connectivity plays a crucial role as agencies at the federal and state level focus on expanding the public transit system to meet the demands of a multimodal transportation system. Transit agencies have a need to explore mechanisms to improve connectivity by improving transit service. This requires a systemic approach to develop measures that can prioritize the allocation of funding to locations that provide greater connectivity, or in some cases direct funding towards underperforming areas. The concept of connectivity is well documented in social network literature and to some extent, transportation engineering literature. However, connectivity measures have limited capability to analyze multi-modal public transportation systems which are much more complex in nature than highway networks.In this paper, we propose measures to determine connectivity from a graph theoretical approach for all levels of transit service coverage integrating routes, schedules, socio-economic, demographic and spatial activity patterns. The objective of using connectivity as an indicator is to quantify and evaluate transit service in terms of prioritizing transit locations for funding; providing service delivery strategies, especially for areas with large multi-jurisdictional, multi-modal transit networks; providing an indicator of multi-level transit capacity for planning purposes; assessing the effectiveness and efficiency for node/stop prioritization; and making a user friendly tool to determine locations with highest connectivity while choosing transit as a mode of travel. An example problem shows how the graph theoretical approach can be used as a tool to incorporate transit specific variables in the indicator formulations and compares the advantage of the proposed approach compared to its previous counterparts. Then the proposed framework is applied to the comprehensive transit network in the Washington–Baltimore region. The proposed analysis offers reliable indicators that can be used as tools for determining the transit connectivity of a multimodal transportation network.