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Transit Subsidy Allocation Techniques: A Review - Final Report
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1983-04-01
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Edition:Final Report
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Abstract:Almost every transit system today operates at a deficit. As these deficits have grown in recent years, transit systems have become increasingly dependent on local governments for funding. This dependence along with growing demands from other public services has placed strains on resources. Such circumstances have made local governments more watchful that their local resources are well invested. The local funding of the deficit arising from transit services is often a particular problem in areas where the transit system provides service to more than one political jurisdiction. In these situations, local governments must determine the portion of the total deficit that each jurisdiction will pay. In some local areas, no attempt is made to match the subsidy a jurisdiction pays with the benefits it receives. Instead, the deficit is funded from regional taxes or general revenues and then allocated. In other local areas, the deficit is allocated among jurisdictions. An attempt is made in these areas to allocate the deficit in proportion to the benefits that each jurisdiction receives and the costs of providing the service to each jurisdiction. The major problem is the choice of a "fair" allocation method. This choice is difficult because of the inherent problems of defining "fair. " The purpose of this report is to describe the different approaches that have been used to address the subsidy allocation problem. The report is primarily descriptive because it is recognized that local funding decisions are political decisions and cannot be made solely on technical grounds. To guide the study and provide input, a review panel of persons active in the transit industry was assembled to critique the report at its various stages of development. A list of panel members is shown in Exhibit 1.
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[PDF-1.73 MB]
