This one is for transit and tax-policy wonks. It’s a piece from Yonah Freemark, in The Transport Politic, about the problems many transit systems are facing with sinking revenues. “When the recession strikes, little maneuvering room for transit” He points out that one reason for the problem is over-reliance on a very volatile revenue stream: sales taxes.
Most cities have been especially affected by the recession because of their reliance on the sales tax to provide revenue. Of the recent referendums on transit expansion programs, almost all have involved a 1/2 cent or one cent increase in that tax; few cities have looked to other forms of revenue, like an income tax or a payroll tax. The consequences of this decision, however, have been devastating because sales tax revenues have fallen considerably as a result of the recession and the reduced standard of living experienced by the majority of Americans over the past few years. A more stable financing program for transit, using other forms of taxation, would ensure that planned projects actually get built.
If you want to get deep in the weeds of transit finance, follow the link on “financing program for transit,” above. I haven’t read it all the way through yet, but it looks at the New York and Paris transit systems and how they get and spend their money.
In other transit-related news, here’s a piece about Charlotte that ran Sunday in Tampa, Fla., where voters next month will decide on – you guessed it, a sales tax – to pay for transit as well as roads and other transportation needs.
And here’s a fun contrarian piece from the Market Urbanism blog, “The Great American Streetcar Myth,” by Stephen Smith, who contends it wasn’t General Motors and Standard Oil who killed off streetcars as much as the Progressive Era and New Deal planners and politicians. Fare-increase restrictions, labor union requirements, publicly paid street-paving and road-building all combined to finish off streetcars, he writes. It’s an interesting perspective. Smith also points out:
“While the status quo’s more libertarian-minded backers will point to the gas tax as a user fee, the highway funds are hardly adequate to cover the true costs. Though state and federal governments do now cover most of the capital and operating costs of the highways, local roads are still paid for almost entirely out of general revenues. And when you consider the forgone taxes and opportunity costs, roads start to look severely underpriced – to say nothing of the last hundred years of subsidized road building (the mainstay of FDR’s WPA), eminent domain, anti-urban federal home tax breaks and lending programs, positive feedback loops, and density-limiting zoning and parking policies.”