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Can Mass Transit be funded without Tax Increases?

The latest article regarding Mass Transit in the Star plainly presents how difficult it must be to govern. The article sites a survey which finds that a majority of Hoosiers want better Mass Transit, but they don’t want to see taxes rise in order to pay for them. So, what are the other options? The only thing that immediately comes to my mind is to cut other government services. Is there something else that I’m missing?

6 Responses to “ “Can Mass Transit be funded without Tax Increases?”

  1. Graeme says:

    I guess it’s no surprise that Indiana said they didn’t want to pay for it, and it’s not surprising that most Hoosiers have never used public transit. But I have to admit, I was surprised that they want more transit options. It’s kind of a major breakthrough.

    The idea that public transit must be financially self-supporting just doesn’t make sense. Tell me why people hate toll-roads again? My opinion is to focus on how to make the public transit system useful and cost-effective rather than launching a marketing campaign to bolster popularity.

    The benefits to wider society are not always obvious, but it is the job of public officials to make hard decisions sometimes. Be ready to spend a helluva lot of money, hire the right people, and go ahead and make the investment.

  2. Kevin says:

    That’s very well said, and I agree with all of it.

  3. thundermutt says:

    And Graeme, what’s likely to happen is more studies to “prove” to people what we ought to be doing…so the “hard” decision becomes the obvious choice.

    Even in “transit friendly” cities with high ridership, transit does NOT pay for itself.

    But then again, neither does commuting 45 minutes each way by car…

  4. thundermutt says:

    One interesting possibility for funding is a TIF district around the transit lines. Capture the increased tax revenue from increased density that results from a train line or express bus/park & ride.

  5. Kevin says:

    That sounds pretty good thunder. Thanks.

  6. SpeedBlue47 says:

    If Indianapolis were to switch to Land Value taxation in place of its crazy mix of income, property, and sales taxation, developing municipal services that increase the value of land that stands underneath property that benefits from such services. This would actually be a great way to accurately test the theories that purport that transit always brings TOD sufficient to level the tax rolls.

    But that is superfluous. The idea that transit should NOT (or can not) be self-supporting doesn’t make sense. If there is a market for transit, and those that develop the transit system are able to choose the most reasonable approach to doing so, then of course transit can and should be self-supporting. The ideology supporting the opposite viewpoint states that it is the municipal government’s responsibility to ensure that transit is developed, no matter the demand for such a service.

    Of course, it is true that transit is playing on a non-level playing field. Automotive transport is heavily subsidized and American commuters pay very little to nothing directly for such services. Of course now, Americans have invested heavily into their vehicles. So, with them paying thousands for vehicles, and hundreds a year in gas taxes, why would they want to favor a system that is less convenient and does not cost very much less?

    The answer, to me at least, is to transition away from a subsidized auto culture to a open playing field. Repealing gas taxes, moving to land value taxation, and allowing development of whatever transit option actually makes the most sense and most increases land values would be one way to do this. Highways would have to fund themselves, and local roads would be funded by LVT. Expansion of such roads would have to compete for funds in real terms with transit options. The tax rolls would show the viability and demand for each by the relative increase in land values.

    This would require no tax increase, but would require major changes in legislation. Currently, the absolute biggest obstacle would be federal involvement in transportation. Making such a change at the local level would be one sort of challenge, rallying Senators and Representatives from many districts that directly gain from the legislative climate would be quite a different one.

    Maybe in the short term the best solution is to take the current transit system and evolve it in ways that are cost-effective yet answer the criticisms that residents have. Decrease headways, make more convenient payment options, improve transit facilities, improve quality of transit vehicles. Reducing the size of buses appropriately to route ridership could provide much needed cost savings in terms of fuel. Also, the marketing for transit in cities like Indianapolis is terrible. The only way to sell transit with the current commuter culture is to sell the experience of “stress free commuting”, and selling the ability to be productive during your commute(or to relax) instead of dealing personally with stop-and-go traffic. Sell the positives of the system, search for cost effective ways to improve the negatives, and then you might find that ridership increases to levels that allows for financial sustainability.

    The only city services that should not be “financially self-sustainable” are the true governmental services, law and order. But, in theory at least, these services could be improved in a fiscally intelligent manner by moving to a LVT system as well, as well-functioning and appropriately scaled offerings of these services also increase land values(but luckily have diminishing returns after a point).

    I apologize for the length of this comment.

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