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Financing Public Transit in Metro Detroit Supervised Research Project Submitted in Partial Fulfillment of the Masters of Urban Planning Degree

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Financing Public Transit in Metro Detroit Supervised Research Project Submitted in Partial Fulfillment of the Masters of Urban Planning Degree Financing Public Transit in Metro Detroit Supervised Research Project submitted in partial fulfillment of the Masters of Urban Planning degree Prepared by: Christina Peltier Supervised by: Professor Ahmed El-Geneidy School of Urban Planning McGill University Montréal, Quebec September 2012 FINANCING PUBLIC TRANSIT IN METRO DETROIT Peltier ACKNOWLEDGEMENTS First, I would like to thank Professor El-Geneidy for his patience and support as I explored the complexity of public transit funding. Special thanks to my second reader, Professor Naveen Eluru. I would also like to thank Megan Owens, Executive Director of Transportation Riders United, for her helpful insight into local transportation politics. I am grateful to the public transit leaders and policy experts who took time out of their busy schedules to meet with me and discuss public transit financing. My gratitude to all my friends, especially Amelia Bishop, Rachel Fulton and Desmond Bostick-Kispert, who let me talk through problematic sections of the paper. I would like to thank Brendan Azim, Kathleen Day, Stina Hanson, Elaine Higden, Laura Pfeifer, Karen Uchic and Kevin Zajac for their help with editing page after page of public transit finance policy. Also, thanks to George Boukas, Chris Jaszczak, Daniel Martinez, Jane Orr and Crystal Starr for the coffee and hours they let me spend in their businesses, typing away. Finally, special acknowledgment to my grandfather, Al Peltier, who, even in his last days, kept telling me to stop talking to him and start working on my paper. His support, the stories of his own challenges in life, and his memory helped carry me to the completion of my studies at McGill University. Special thanks to my family, who provided me with love and support throughout all my struggles. i FINANCING PUBLIC TRANSIT IN METRO DETROIT Peltier ABSTRACT The Governor of Michigan and several state legislators are proposing the creation of a Regional Transit Authority, which would be authorized to collect new revenue for public transit in Metro Detroit, possibly from a fuel tax or from a vehicle registration fee. This study reviews 5 primary and 18 secondary sources of public transit funding, as well as analyzes 5 case studies. To determine the feasibility of the funding sources in Metro Detroit, each funding source is evaluated based on five indicators, drawn from a literature review, as well as interviews with policymakers and other experts. Based on this analysis, the author makes recommendations for modifying existing funding sources and for developing new public transit revenue. The paper concludes with a discussion of the challenges that Metro Detroit faces as a region to fund public transit. KEYWORDS Transportation, Funding, Metro Detroit, Urban Planning ii FINANCING PUBLIC TRANSIT IN METRO DETROIT Peltier ABRÉGÉ Le gouverneur et des plusieurs législateurs de l'état du Michigan proposent la création d'une commission de transport régionale avec le droit de lever des impôts afin de financer et superviser les fournisseurs du transport collectif à la région métropolitaine de Détroit. Une taxe sur l'essence et un droit d'immatriculation des véhicules sont deux options de financement proposées. Cette étude évalue 5 sources de financement primaires et 18 sources de financement secondaires, et comprend 5 études de cas sur les sources de financement du transport collectif. Afin de déterminer leur faisabilité dans le contexte du Michigan, les sources de financement sont évaluées selon cinq indicateurs pris d'une analyse documentaire, ainsi que des entretiens auprès des décisionnaires et des autorités. Sur cette base, l'auteur recommande que les sources de financement actuelles soient modifiées et que d'autres soient rajoutées. L'étude conclut avec une discussion des défis que confronte la région métropolitaine de Detroit en ce qui concerne le transport collectif régional. MOTS-CLÉ Transport, Financement, Région Métropolitaine de Detroit, Urbanisme iii FINANCING PUBLIC TRANSIT IN METRO DETROIT Peltier TABLE OF CONTENTS ACKNOWLEDGEMENTS ............................................................................................................. i ABSTRACT .................................................................................................................................... ii ABRÉGÉ........................................................................................................................................ iii LIST OF TABLES ........................................................................................................................ vii LIST OF FIGURES ..................................................................................................................... viii LIST OF ACRONYMS AND ABBREVIATIONS ...................................................................... ix 1 INTRODUCTION ....................................................................................................................... 1 2 HISTORY OF PUBLIC TRANSIT FINANCING ...................................................................... 2 2.1 Emergence of Federal and State Subsidies ........................................................................... 2 2.2 Recent History and Trends .................................................................................................... 3 3 METHODOLOGY ...................................................................................................................... 4 3.1 Literature Review .................................................................................................................. 5 3.2 Descriptions of Funding Sources .......................................................................................... 5 3.3 Selection of Case Studies ...................................................................................................... 5 3.4 Feasibility Indicators ............................................................................................................. 7 4 COMPREHENSIVE STUDIES EXAMINING STATE AND LOCAL FUNDING SOURCES....................................................................................................................................... 8 5 FUNDING SOURCES............................................................................................................... 10 5.1 Operating and Capital Funds ............................................................................................... 10 5.2 Explanation of Funding Sources ......................................................................................... 11 5.3 Dedicated Funding Sources ................................................................................................. 13 5.4.1 State Funding Sources .................................................................................................. 14 5.4.2 Local Funding Sources ................................................................................................. 18 5.4.3 Both State and Local Funding Sources ......................................................................... 22 6 CASE STUDIES ........................................................................................................................ 35 6.1 Greater Cleveland Regional Transit Authority (GCRTA) – Cleveland, Ohio .................... 35 6.1.1 Budget Summary .......................................................................................................... 36 6.1.2 Funding Sources ........................................................................................................... 38 6.2 Port Authority – Pittsburgh, Pennsylvania .......................................................................... 40 6.2.1 Budget Summary .......................................................................................................... 40 iv FINANCING PUBLIC TRANSIT IN METRO DETROIT Peltier 6.2.2 Funding Sources ........................................................................................................... 42 6.3 Regional Transportation District (RTD) – Denver, Colorado ............................................. 46 6.3.1 Budget Summary .......................................................................................................... 47 6.3.2 Funding Sources ........................................................................................................... 50 6.4 Tri-County Metropolitan Transportation District of Oregon (TRIMET) – Portland, Oregon ....................................................................................................................................... 53 6.4.1 Budget Summary .......................................................................................................... 54 6.4.2 Funding Sources ........................................................................................................... 55 6.5 Metropolitan Atlanta Rapid Transit Authority (MARTA) – Atlanta, Georgia ................... 58 6.5.1 Budget Summary .......................................................................................................... 58 6.5.2 Funding Sources ........................................................................................................... 60 6.6 Summary of Case Studies ................................................................................................... 62 7 METRO DETROIT’S PUBLIC TRANSIT SYSTEMS ............................................................ 63 7.1 State Funding......................................................................................................................
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