New Starts, Growing Inequities: Federal and Local Public Transit Funding

Abstract

Equity concerns regarding local revenue sources are increasingly important in the United States, as local sales taxes for transportation increase amid perceived federal funding shortfalls. This study examines shifts in the federal role and local funding sources for public transit projects supported by the New Starts program. The analysis finds that total federal New Starts spending grew over this period, but was distributed across more costly projects, with a resulting decrease in the average federal share per project. As expected, there was increased sales tax use at the local level. The increase in local spending on transit should be met with concern. Prior research has established that sales taxes fail along both the beneficiary to pay and ability to pay equity principles. Thus, the recent massive commitment to expanding public transit infrastructure relies on concerning funding mechanisms and may also fail to prioritize the needs of those with limited accessibility.