Paying for Transit in an Era of Federal Policy Change

Abstract

Public transit agencies rely on a combination of local, state, and federal subsidies to provide their services. However, federal policy changes have introduced uncertainty into the public subsidy picture. In 1998, Congress passed TEA-21, which eliminated federal operating assistance to agencies in U.S. urbanized areas with populations of 200,000 or more persons. This policy change came at the end of a more than decadelong decline in the share of federal operating support for agencies in larger urban areas. This article examines how agencies in different parts of the country and in different- sized urban areas have responded to federal policy changes by posing a simple question: Where have agencies turned to make up the operating fund shortfall? The investigation reveals that agencies in different parts of the country have followed different financial paths.

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