An interesting post on how transit funding works and how it may be treated in this new economic environment in how it relates to proposed stimulus funds. The privatization plans being discussed in
The funding mechanisms for transit are perverse--IL funds its transit systems' operating budget through sales taxes and a small amount through real estate transfer taxes. The feds stopped providing operating support to transit systems in 1998. Roads are funded (again, generally speaking) w/gas tax. There have been attempts to realign this crazy situation with congestion pricing and other more equitable arrangements but nothing has come of it. And to recover federal capital dollars a state usually has to provide a state match (and sometimes a local match). IL, unable to pass a capital program since 1999, has recently forfeited much of the federal transit dollars it was to receive in the last transp. law.
Transit is a money losing venture if you look at money put in v. revenues generated. And it SHOULD be. If we asked our riders to pay the actual cost of a ride, we're talking about $6 per ride. That is not only untenable, but exactly the opposite of how we should ask our customers to support us given the benefits we provide. We should find progressive funding mechansisms (congestion pricing) because the actual transaction for taxpayers and metropolitan regions continues to be one that greatly favors transit investment.