How Many Local Public Transportation Finance Options?

I have had legislators, advocates and public transportation officials ask me on many occasions over the past few months: What are the five or six revenue sources for public transportation at the local level? It is not a straightforward question.

On my reckoning, there are more than five or six. Some are general revenue sources that may be used for public transportation at the local government’s discretion, others are dedicated revenue sources that can only be used for public transportation, still others are sources that may be used for certain purposes, of which public transportation or public transportation facilities are two.

I count at least nine that are either widely available now to either counties, municipalities or both, are available following a successful local referendum, or are being discussed as potentially being made more widely available. The list includes:

- Property taxes
- Sales taxes (local for any purpose, 1/4 cent local option and Charlotte’s dedicated 1/2 cent local option)
- Rental car taxes (Triangle, Triad and Charlotte)
- Local vehicle registration fees (A mixture of general revenue provisions state-wide; some specified municipalities in the Triangle and Triad can levy a higher fee for any lawful expenditure purpose; some must use some of the higher fee for transportation; there is also a dedicated $5 possible for cities or towns with public transportation systems; the Triad and Triangle have a tax dedicated to regional transit authorities)
- Municipal Taxi Tax ($15 per vehicle for any lawful purpose)
- Land transfer tax (I was reminded this morning that the land transfer tax is a potential source for local governments to use to fund public transportation. I had forgotten about it given that no county has yet voted for the 0.4% tax.)
- Tax increment financing
- Special Assessments
- Municipal Service Districts (Properties within one-quarter mile radius around transit stops may be taxed at a higher property tax rate to build or maintain rail stations and stops and parking facilities associated with those stops, or to fund downtown re-vitalization, including public transportation facilities as part of the re-vitalization.)

Then there are bonds, of course, which can be potentially re-paid with some or all of the above.

How local governments use these revenue sources and the degree to which they rely on some rather than others will affect the amount of money generated, the stability of that revenue over time and, in relative and absolute terms, the contribution of individuals, individuals of various incomes and business to the provision of public transportation.