Knowledge CentreTechnical Resources SearchConference PapersAn Examination of the Theory and Practicality of Alternative and Realistic Funding Sources for Transportation, with an Emphasis on Transit and Other Sustainable Modes

An Examination of the Theory and Practicality of Alternative and Realistic Funding Sources for Transportation, with an Emphasis on Transit and Other Sustainable Modes


: Municipalities across North America are struggling to find immediate and longer term mechanisms to fund the growing operational and capital costs of transportation infrastructure and programs. This is especially true for sustainable transportation modes such as public transit, cycling and walking. This is happening at the same time that provincial/state and federal governments are implementing reductions to transportation funding programs due to pressures to increase funding for other programs and to reduce overall government spending. In addition, North America transit systems are experiencing the following changes that are impacting their financial situations: • Negative customer reactions to continually raising transit fares; • The increasing use of more fuel efficient automobiles, resulting in reduced revenues from sources such as gasoline taxes; • An increasing resistance to raising more revenues from local property taxes ; and • A weakening economy that lowers revenue from sources such as retail sales taxes. As well, there is a significant growth in demand for increased and alternative funding sources for transit and other sustainable transportation modes to: -Reduce greenhouse gas emissions by enhancing the quality, reliability and inter-connectedness of active transportation modes that in turn increase their use; – Minimize the impact on low-income households of increasing transportation funding from existing sources, as many of them are regressive; – Address the increasing need to reduce congestion for improved goods movement; -Enhance the liveability of urban areas in terms of the quality of the overall transportation system, as this is a key factor in the economic competiveness of urban areas; – Address the increasing costs of operating, maintaining and constructing transportation systems such as Bus Rapid Transit (BRT), Light Rail Transit (LRT), commuter rail, and high frequency bus systems with good walking and cycling connections and facilities, which are being introduced and expanded to attract a greater number of users, especially “choice travelers” who own an automobile; and – Meet the growing needs and costs to maintain and replace aging transportation infrastructure, and improve its security. This paper will examine the economic theory and other key reasons supporting taxes, user fees and other funding sources to support the enhancement and expansion of transportation infrastructure and also meet capital and operating costs, with an emphasis on the funding of sustainable modes including transit, walking and cycling. It will consider such evaluation factors as revenue generating potential, financial stability, and income and geographical equity, along with the externalities of the funding mechanisms. Negative externalities include air and noise pollution, congestion, traffic accidents and property damage, while increased land values, greater economic competitiveness and more free time are examples of positive externalities. The paper will also consider the appropriateness of the funding sources in terms of the added benefits transportation demand management (TDM) measures, and the practicality/ease and costs of collecting/administering the transportation funding sources. The focus will be on examining packages of funding sources that are efficient, offer some degree of equity, are financially sustainable, and in themselves may have a TDM impact. The paper will examine some of the key political, social, administrative and other barriers to implementing these transportation-related and sustainable funding sources, along with strategies to obtain support for implementing these funding sources. The methodology includes a review of documents and case studies pertaining to the analysis of and implementation of alternative transportation funding sources in North America and globally. In addition, some interviews have been conducted with key personnel in regional transportation authorities that have researched, developed, implemented and/or monitored these transportation funding sources. 

Conference Paper Details

Session title:
Bill Lambert
Transportation planning