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From 1970 to 1978, total government subsidization of transit in the United States increased almost tenfold, from only $540 million to $5264 million. This burgeoning aid program has prompted significant changes in the nature of government assistance. There has been a marked shift among government levels in the responsibility for transit financing, and new tax mechanisms have been adopted, particularly at the local and regional levels, to raise additional transit funds. This paper documents these transit financing trends in detail and explores briefly the potentially significant impact of these trends on the overall equity, efficiency, and political feasibility of transit financing. On the basis of operating subsidy data collected from transit agencies in each of the 26 largest U.S. metropolitan areas and capital subsidy data for all urban areas provided by the U.S. Department of Transportation, two main conclusions were reached. First, the responsibility for transit financing has shifted to higher levels of government so that, in 1978, the federal government contributed 52 percent of the total subsidy. Second, there has been a very strong trend toward the use of uniform-rate regional taxes specifically earmarked for transit subsidization. (Author)
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