States could help struggling transit agencies close their budget gaps: report

As transit ridership struggles to recover to pre-pandemic levels, leaving many transit agencies facing large budget gaps, a new report suggests state funding could help transit systems avoid service cuts and fare hikes.

State spending on public transportation varies widely. According to T4A’s transit report card, Hawaii, Massachusetts and New York each spent more than $200 per capita on transit in 2021. But the vast majority of states, including most states in the Southeast, Southwest and Great Plains, spent less than $12.50 per person that year on public transportation within their borders.

Gas taxes are “the bedrock revenue stream for most states’ transportation systems,” the report states, but some states partially or fully prohibit the use of gas taxes for public transportation. Seven states have statutory prohibitions, which the report suggests could be repealed to open that revenue stream for use on transit. Another 23 states prohibit gas tax revenues from being used for public transit in their state constitutions, but the report notes that the wording of those provisions “may be vague or flexible enough to leave room for transit to receive funding.”