Dedicated Transit Funding Is Crucial for Reliable Transit
Dedicated funding from local government is essential to a community’s ability to construct, operate, and maintain reliable, high-quality public transportation services. Recurring, reliable funding from a dedicated source independent from general revenue and normal appropriations processes can help support bond financing and access to bond markets, generate necessary matching local dollars for state and federal grants, facilitate long-term transit planning, and offer greater flexibility in spending decisions.
ThinkTennessee analyzed the transit funding sources for the top 50 major metropolitan regions by collecting data from fiscal year 2019 transit agency budgets and annual financial statements. Some metro areas have adopted dedicated funding referendums since 2019 and are included in the overall analysis but not as part of revenue estimations.
- 46 of the 50 largest metro areas nationwide have secured some form of dedicated funding for their transit agencies; Two of the four that do not are located in Tennessee (Nashville and Memphis).
- 39 of the 46 major metro areas with dedicated funding utilize some form of sales tax ranging from 0.375% to 2%, which generates an average of almost $394 million in annual revenue and represents the most common form of revenue.
- Other common sources of revenue include various forms of property tax, such as property title transfer fees or mortgage recording fees, and vehicle registration or sale fees.
Use our interactive map and downloadable dataset below to see how major cities in the U.S. fund transit agencies through dedicated revenue sources.
Transit Funding Profiles
We identified only four major metro areas that do not have dedicated funding for transit: Orlando, Nashville, Memphis, and Hartford. Orlando, Florida is the largest city nationwide lacking dedicated funding. In November 2022, Orlando attempted a 1% sales tax referendum to support bus, light rail, road, and multimodal improvements, but it failed. The smallest major metro area lacking dedicated funding is Hartford, Connecticut, in part because their bus services are owned by the state transportation department.
To date, no local jurisdiction of any level in Tennessee has successfully adopted dedicated funding for transit by referendum. The first and only attempt to do so was Nashville’s 2018 transit referendum.
In 2022, Memphis redirected property tax revenues from expired PILOT programs to a special revenue fund for transit and mobility. Since this occurred after FY2019, it is not included in the financial analysis included in the interactive map above. This funding source contributed about $4.49 million to MATA’s operating revenue in FY2023, but it is not predicted to be a stable, consistent funding source until 2030. While these revenues contribute to MATA’s ability to maintain current service and maintenance costs, the slow, long-term revenue growth will likely be unable to realize the vision and public demand for better transit in Memphis. A meaningful dedicated funding source, similar in scale to the revenue generated by the 2019 public safety half-cent sales tax referendum, is needed for MATA’s ability to meet residents’ expectations for high-quality transit.
If you have suggestions or comments on the map and information provided above or have additional information to share about local funding sources that are not yet included, please connect with us at info@thinktn.org.
