State and Local Policy Database

Transit Funding

A state’s investment in public transit is a key indicator of its interest in promoting energy-efficient modes of transportation. Faced with increasingly uncertain federal funding streams and federal transportation policies that remain highway-focused, many states are taking the lead when it comes to finding dedicated funding sources for long-term public transit expenditures. To generate a sustainable stream of capital and operating funds, a number have adopted legislation that identifies specific sources of funding for public transit and other alternatives to highway modes of transportation.

No policy in place or proposed.

Last Reviewed: May 2020

No policy in place or proposed.

Last Reviewed: July 2020

No policy in place or proposed.

Last Reviewed: July 2019

Passed in 2001, Arkansas Act 949 established the Arkansas Public Transit Fund, which directs monies from rental vehicle taxes toward public transit expenditures.

Last Reviewed: July 2019

California has several legislatively created sources of funding for public transit. 

  • The Transportation Development Act (TDA), originally created by SB 325 (1971) provides on an ongoing basis, two sources of funding for public transit: the Location Transportation Fund (LTF) derived from general sales tax and the State Transit Assistance (STA) Fund derived from the sales tax on diesel fuel.
  • Proposition 1A (2008): High-speed rail connectivity program identified $760 million for connections to the then proposed High-Speed Train. The Transit and Intercity Rail Capital Program (TIRCP) created by SB 862 (2014) and later modified by SB 9 (2015) provides funding from the Greenhouse Gas Reduction Fund for transformative capital improvements to modernize California’s intercity, commuter, and urban rail systems, and bus and ferry transit systems to reduce emissions of greenhouse gases by reducing congestion and vehicle miles traveled throughout California.  Approximately $2.4 billion is allocated for the five year-program.
  • SB 1 (2017) provided $105 million annually to transit operators in California for eligible transit maintenance, rehabilitation and capital projects.
  • The Public Transportation Modernization, Improvement, and Service Enhancement Account Program (PTMISEA) created by Proposition 1B (2006) allocated the last cycle of funding on April 9, 2019, with approximately 300 open projects.
  • SB 862 (2014): Low Carbon Transit Operations Program (LCTOP) is a noncompetitive, formulaic program, with 5% of annual auction proceeds being continually appropriated at the beginning of 2015 - to provide operating and capital assistance to transit agencies with the goal of reducing GHG emissions and improving mobility; with an emphasis on serving Disadvantaged Communities.

Last Reviewed: July 2020

Colorado adopted the FASTER legislation in 2009, which created a State Transit and Rail fund that accumulates $5 million annually. The legislation also allocated $10 million a year from the Highway Users Tax Fund to the maintenance and creation of transit facilities.

The state subsequently passed SB 48 in 2013, which allowed for the entire local share of the Highway Users Trust Fund (derived from state gas tax and registration fees) to be used for public transit and bicycle or pedestrian investments.

Additionally, in 2018 the state passed SB 1, which created a new multimodal transportation fund allocated to bicycle, pedestrian, and transit funding. The bill as written allocated approximately $75 million in the current fiscal year; $22.5 million the following year; and $7.5 million/yr for 20 years. In addition, state law requires that a minimum of 10% of any general fund transfer to the DOT must go to public transit. This applies to debt funding authorized by SB 17-267, and is anticipated to result in approximately $92 million of debt financed transit dollars in the next few year.

Last Reviewed: May 2020

No policy in place or proposed.

Last Updated: July 2018

Delaware Code Title 2 § 2101 Complete Community Enterprise Districts defines criteria for any local government to promote economic development by entering into an agreement with the Department of Transportation to create transit-oriented development districts, called "Complete Community Enterprise Districts". They are characterized by their mix of land uses, efficient use of public infrastructure, efficient use of public services, and multiple modes of public transportation combined with environmentally friendly private transportation. The legislation does not provide a specific funding source for public transit and other alternatives to highway transportation but does give priority to Complete Communities when evaluating projects for funding. 

Last Reviewed: July 2020

No policy in place or proposed.

Last Reviewed: July 2019

The state recently adopted transit finance legislation. House Bill 1271 allows municipalities in Florida with a regional transportation system to levy a tax, subject to voter approval, that can be used as a funding stream for transit development and maintenance.

Last Reviewed: July 2020

The Transportation Investment Act, enacted in 2010, allows municipalities to pass a sales tax for the express purpose of financing transit development and expansion. Georgia has started to provide more funding for public transit. The governor included $100 million in bonds for transit this year. Georgia also this year passed HB 930, which creates a new 13 county public transit board and allows metro Atlanta counties to vote to increase transit funding. This has the potential to pave the way for a major transit expansion in metro Atlanta.

Last Reviewed: July 2019

Section HRS 46-16.8 of the Hawaiian Statutes allows municipalities to add a county surcharge on state tax that is then funneled towards mass transit projects.

Last Reviewed: July 2020

No policy in place or proposed.

Last Reviewed: July 2020

House Bill 289 allocates $2.5 billion for the creation and maintenance of mass transit facilities from the issuance of state bonds. 

Last Reviewed: July 2019

House Bill 1101 specifies that a county or city council may elect to provide revenue to a public transportation corporation from the distributive share of county adjusted gross income taxes, county option income taxes, or county economic development income taxes. An additional county economic development income tax no higher than 0.3% may also be imposed to pay the county's contribution to the funding of the metropolitan transit district. Only six counties within the state may take advantage of this legislation.

Last Reviewed: July 2019

The Iowa State Transit Assistance Program devotes 4% of the fees for new registration collected on sales of motor vehicle and accessory equipment to support public transportation.

The legislature typically appropriates funding annually for the following programs that support alternatives to highway transportation:
• State Recreational Trails Program (FY 2020 appropriation: $1.5 million)
• Railroad Revolving Loan and Grant Program (FY 2020 appropriation: $1 million)
• Public Transit Infrastructure Grant Program (FY 2020 appropriation: $1.5 million)
 
Finally, while not state funding, Iowa utilizes flexibility of federal funds to support alternatives to highway transportation. Each year, $3 million of Iowa’s share of federal Congestion Mitigation and Air Quality improvement (CMAQ) funds are allocated for bus replacement and a varying portion of remaining CMAQ funds are used to support new public transit service through an annual application-based program. Iowa also utilizes the maximum 10 percent of federal National Highway Freight Program funding for freight intermodal and freight rail projects.
 

Last Reviewed: July 2020

The Transportation Works for Kansas legislation was adopted in 2010 and provides financing for a multimodal development program in communities with sensitive transportation needs. This program includes annual funding to develop, improve, or maintain a coordinated public transportation system throughout Kansas. This dedicated funding stream increased from $6 million to $11 million in 2013 (see KSA 75-5035).

Last Reviewed: July 2019

No policy in place or proposed.

Last Reviewed: July 2019

No policy in place or proposed.

Last Reviewed: July 2019

The Maine Legislature created a dedicated revenue stream for multimodal transportation in 2012 (M.R.S.A Title 23, §4210-B). Through sales tax revenues derived from taxes on vehicle rentals, Maine’s Multimodal Transportation Fund must be used for the purposes of purchasing, operating, maintaining, improving, repairing, constructing and managing the assets of multimodal forms of transportation.

Last Reviewed: July 2019

In 2018, Maryland passed the Maryland Metro/Transit Funding Act. Through this legislation, at least $167,000,000 in revenues from Maryland's Transportation Trust Fund must be provided to the Washington Suburban Transit District through an annual grant to be used to pay the capital costs of the Washington Metropolitan Area Transit Authority, assuming certain requirements, such as system operation reports, outlined in the legislation are met. In addition, the legislation requires at least $29,100,000 from the revenues available from the Transportation Trust Fund be provided for the capital needs of the Maryland Transit Administration in fiscal years 2020, 2021, and 2022. The legislation further requires the appropriation for the operation of the Maryland Transit Administration in fiscal years 2020, 2021, and 2022 to be increased by at least 4.4% over the previous year, starting with the fiscal year 2019 budget (Source).

Last Reviewed: July 2020

Massachusetts has also passed legislation to create a dedicated funding stream for the Massachusetts Bay Transportation Authority (MBTA). The MBTA State and Local Contribution Fund is financed by a 1% sales tax implemented in the state. 

Last Reviewed: June 2020

The Comprehensive Transportation Fund for Public Transit Programs is funded by 10% of the total Michigan Transportation Fund, however, after deductions, that number was roughly 8.63% for Fiscal Year 2019. These dollars are sourced from fuel tax revenue, vehicle registration revenue, and sales tax on automotive related items.

Last Reviewed: May 2020

 

In order to finance continued transit development in the state, Minnesota adopted House File 2700 in 2010. The bill is an omnibus bonding and capital improvement bill which provides $43.5 million for transit maintenance and construction.  The bill also prioritizes bonding authorization so that appropriations for transit construction for fiscal years 2011 and 2012 amount to $200 million. 

Last Reviewed: July 2019

No policy in place or proposed.

Last Reviewed: July 2019

Missouri statutes (Section 226.225) provides dedicated funding for non-highway modes of transportation. A portion of motor vehicle sales taxes are deposited into the State Transportation Fund for non-highway purposes. 

Last Reviewed: June 2020

No policy in place or proposed.

Last Reviewed: June 2020

No policy in place or proposed.

Last Reviewed: July 2020

No policy in place or proposed.

Last Reviewed: May 2020

NHDOT continues to fund capital and operating costs under FTA 5310 Enhanced Mobility of Seniors & Individuals With Disabilities program.  Under this program, the federal share of capital/mobility management and operating costs may not exceed 80 percent.

Under RSA 261.135 VI - "...the legislative body of a municipality may vote to collect an additional fee for the purpose of supporting a municipal and transportation improvement fund, which shall be a capital reserve fund established for this purpose and governed by the provisions of RSA 34 and RSA 35 for cities and towns, respectively."  

Last Reviewed: May 2020

No policy in place or proposed.

Last Reviewed: July 2020

No policy in place or proposed.

Last Reviewed: July 2019

New York State provides nearly $7 billion annually from a variety of sources to support transit systems statewide.  In 2010 New York adopted  Assembly Bill 8180, which increases certain registration and renewal fees to fund public transit.  It also created the MTA (Metropolitan Transportation Authority) Financial Assistance fund to support New York City area subway, bus and rail.

In April 2019, the New York State Legislature approved a plan to charge vehicles traveling into or within a pre-determined area in the central business district of New York City starting in 2021.  The Congestion Pricing Plan is meant to discourage drivers from entering NYC’s most congested roadways and encourage more transit use.  The goal is to reduce congestion and emissions, but the plan will also raise funds for the MTA to maintain and improve NYC's subway system, bus line and commuter rail.

Last Reviewed: November 2020

In 2009 North Carolina passed House Bill 148, which calls for the establishment of a congestion relief and intermodal transportation fund. Criteria for the allocation of funds can be found in the legislation.

Last Reviewed: July 2020

No policy in place or proposed.

Last Updated: July 2017

No policy in place or proposed.

Last Reviewed: July 2019

HB 1365 adopted in 2019 created the Office of Mobility and Public Transit within the Department of Transportation. This new office works to ensure that Oklahoma has a network of public transit systems that receive adequate funding to ensure the mobility needs of all Oklahomans are met in a safe, affordable, reliable, consistent and coordinated fashion (Link). 

Last Reviewed: May 2020

In 2009, the state passed legislation that directed a “reasonable” amount of money from the State Highway Fund towards the provision of footpaths and bicycle trails whenever a highway, road or street is constructed. The state also has a Lieu of State Payroll Tax Program that provides a direct ongoing revenue stream for transit districts that can demonstrate equal local matching revenues from state agency employers in their service areas.

The state of Oregon passed HB 2017 in the 2017 Legislative session that included an employee-wage statewide transit tax. Employers must start withholding a one-tenth of 1% or .001 from wages in Oregon beginning July 1, 2018. Funds will be transferred into the Statewide Transportation Improvement Fund (STIF) to fund public transit, not rail. The funds will be distributed by the following: 90% to qualifying entities (transportation service providers), 5% to competitive grants, 4% for intercity services, and 1% for ODOT to establish a technical resource center. Program operative date is January 1, 2019. It is estimated the tax will generate about $115 million a year to start.

The state also has a Lieu of State Payroll Tax Program that provides a direct ongoing revenue stream for transit districts that can demonstrate equal local matching revenues from state agency employers in their service areas.

Last Reviewed: June 2020

In 2007, the Pennsylvania legislature passed Act 44 that created a Public Transportation Trust Fund which is funded from sales tax, PA Turnpike funding, other use taxes and fees that are not constitutionally protected for highway funding.   

Additionally, in 2013, Act 89 was passed that changed the funding allocations.   The legislation can be found here.

Last Reviewed: June 2020

The State Transportation Improvement Plan outlines the funding for RI transit projects, including public transportation opportunities (Source). In this budget, both federal and state dollars are allocated to RI public transit agency, RIPTA, and their funding in total for FY 2019 is $169.71 million, which supports the operation, maintenance, expansion, and development of public transportation across RI.

Last Reviewed: June 2020

No policy in place or proposed.

Last Reviewed: July 2019

No policy in place or proposed.

Last Reviewed: July 2019

Tenn. Code Ann. § 67-4-3205 grants local governments the ability to use revenue from a surcharge for costs associated with the planning, engineering, development, construction, implementation, administration, management, operation, and maintenance of public transit system projects that are part of a transit improvement program. Additionally, Tenn. Code Ann. § 64-8-207 outlines the powers granted to regional transportation authorities to finance mass transit and transportation plans.

Multimodal Access Grants: Beginning in FY 2014, TDOT established and managed a grant program to fund multimodal transportation improvement projects along the state highway network. TDOT’s Multimodal Access Grant Program improves access to all modes of transportation at key locations along or near state routes by filling gaps in the existing system. Infrastructure projects improve safety, encourage economic development, and support the transportation needs of all users on the state routes by improving facilities for pedestrians, bicyclists, and transit users. Multimodal Access projects are funded at 95% by the state with a 5% local match. The State match for a project must not exceed $950,000. Eligible projects include sidewalks, bus shelters and other transit stop amenities, pedestrian crossing improvements, and bike facilities on state routes. To date, this grant program has funded 75 projects totaling $58,000,000 in grant funding. The application window for the 2020-21 round of funding opened in June 2020, and will make $18,000,000 available for eligible projects.

IMPROVE Act: On April 26, 2017, Governor Haslam signed the “Improving Manufacturing, Public Roads and Opportunities for a Vibrant Economy Act,” or the IMPROVE Act into law. The legislation, House Bill 534 and Senate Bill 1221, passed with huge margins in both chambers of the Tennessee General Assembly. The law provides a stable, reliable source of funding for transportation infrastructure improvements and creates the capability for local voters, through a referendum, to impose a capped surcharge on existing taxes as a dedicated funding source for transit projects. 

The Tennessee state legislature allocates $21 million annually to the Division of Multimodal Transportation Resources within TDOT through the IMPROVE Act Public Transit Capital Grant program. These funds are distributed through an annual, competitive call for projects. Projects are evaluated on their (1) project readiness, (2) improvements to jobs access/economic development, (3) reduction of congestion, (4) improvements to safety, and (5) alignment with strategic priorities/strong MPO support. Previously awarded project types include (1) rolling stock, (2) transit facilities, (3) Intelligent Transportation System (ITS) projects, (4) safety & security improvements, and more. 

Last Reviewed: July 2020

No policy in place or proposed.

Last Reviewed: May 2020

Utah’s comprehensive transportation funding bill, passed in 2015, allows counties to implement a 0.25 percent local sales tax to fund locally identified transportation needs. 40% of all revenues collected using this mechanism must be awarded to the county transit agency.

In 2020, additional legislation was passed that enhances the coordination of transportation, housing, and land use at transit-oriented development sites and modifies transportation funding; Utah Department of Transportation’s Road Usage Charge program; local option transportation sales taxes; class B&C road funds; transportation network companies; and tollways. (Link).

Last Reviewed: June 2020

Funding for public transit and for the Transportation Alternatives Program is specified in the annual transportation bill using a mix of state and federal sources. The Fiscal Year 2020 (Act 59 of 2019) included funding for 23 bicycle and pedestrian projects and $36.8 million in total for public transit operations and capital investments, including the purchase of four all-electric buses.  
 

Last Reviewed: June 2020

House Bill 1539, adopted in 2018, allocates $154 million for Metro funding as was needed and $15 million for VRE but the revenue primarily comes from existing sources of funding – much of it from the Northern Virginia Transportation Authority that funds regional transportation.

House Bill 2313, adopted in 2018 - the legislature passed a floor for the regional gas taxes in Northern Virginia and Hampton Roads. The floor will generate an additional $27.2M for NVTC and $18 million for HRTC including $18.2 million for Metro and $8.6 million for VRE. It will also generate $21.9 million for Hampton Roads. While the Hampton Roads revenue cannot be used directly for transit, it can be applied to other transit projects like facilities and BRT lanes that can benefit transit. The Virginia General Assembly adopted legislation (HB 1414/SB 890) in 2020 that will increase funding for transit and for passenger rail.  It does not devote a specific source solely for these alternative modes, but rather gives them a share of overall new funding. 

SB 1038, adopted in 2020, creates the Hampton Roads Regional Transit Program to develop, maintain, and improve a regional network of transit routes and related infrastructure.  The Program is funded through a regional grantor’s tax and a regional transient occupancy tax, along with $20 million of revenues from existing recordation taxes.

Last Reviewed: June 2020

In 2012, Washington adopted House Bill 2660, which created a transit service mitigation program account to provide grants to transit agencies in the state.

Multiple grant and funding opportunities were extended or created in the most recent legislative session. These funds include:

1. A green capital grant program for transit operators (ESSHB 2042)

2. Funding for hybrid-electric state ferries (SHB 1160)

3. A mobility sharing pilot for underserved communities (ESSH 2042)

4. A series of incentives for charging infrastructure and vehicle acquisitions (ESSHB 2042)

This list is not exhaustive and both bills should be reviewed extensively for program funding.

Last Reviewed: May 2020

On April 13, 2013, West Virginia Legislature passed Senate Bill No. 103. This bill is known as the WV Commuter Rail Access Act. It establishes a special fund in the State Treasury to pay track access fees accrued by commuter rail services operating within West Virginia borders. The funds have the ability to rollover from year-to-year and are administered by the West Virginia State Rail Authority.

Last Reviewed: July 2019

No policy in place or proposed.

Last Reviewed: July 2019

No policy in place or proposed.

Last Reviewed: July 2019