Paying for Transit

Many transit systems in North America use gas tax, payroll deductions, and sales tax to pay for transit. Along the west coast, all major transit agencies are running into budget problems. As Portland's unemployment has soared TriMet, the region's transit agency, has had its revenue reduced due to the fact that a big chunk of it comes from payroll deductions. In San Fransisco, transit agencies are having a hard time making ends meet because they depend on parking fees, fines, and sales tax as major funding sources. Transit agencies are also having a hard time in the Seattle area as they rely on sales tax for their funding. Back in Vancouver, we rely on a gas tax to pay for a large part of our transit system. The irony of all these situations is that as people need transit the most, the service becomes less available. People who can no longer afford a car may also find that transit service is being reduce or, in the case of Vancouver, as the price of gas goes up more people take transit, but TransLink has less cash.

While there is no easy solution to this problem as every region is different, one of the key players that needs to step up to the plate is state and provincial government who over the years has downloaded the full cost of transit to local government. The Transport Politic has an interesting post on fixing transit funding.

Therefore, a funding system with a stable tax base that is not as likely to fluctuate with economic problems is a necessity. In addition, government entities at the local and state levels must make a financial commitment to ensure the continued funding of transit agencies, even when recessions hit.

The question is what tax base is stable?