Funding Today’s Questions I. Who “does” transport and what are their tasks? II. By what means, i.e. funding sources, do they accomplish these tasks? I. Transport Actors and Their Tasks Who Does Transport? • Government – National Agencies – Local Administrative Agencies – Law Enforcement • Private Firms – Air, Rail, Bus Service Providers – Taxis/Jitneys – Private Road Builders/Operators Government Agencies in the UK • Department of Transport – Aviation Authorities – Rail Authorities – Highways Agency • Metropolitan Counties • London • Non-Metropolitan Counties & Regions UK: Highways Agency • Responsible for Determining: – Scale of Road Network – Content & Priorities for New Construction – Methodologies for Appraisal of Roads – Policies for Charging Road Users & for Private Finance of Roads UK: Highways Agency • Key Tasks: – Deliver Roads in to Time & Cost – Reduce Average Time to Deliver Roads – Maintain Roads Cost Effectively – Improve Information Supplied to Road Users • Mechanisms: – Planning & Policy Guidance to Local Authorities – Transport Supplementary Grants – Publish Results of Research – Rural, Public Transport, and Innovation Grants UK: Rail Transport • Nationalized in 1948 • Privatized starting in 1996: – Franchise Passenger Service – Transfer Freight/Parcel Service to Private Sector – Separation of Track-Operator (RailTrack) from Train-Operators (many) • British Rail’s Roles: – Regulate fair application of agreements for track access and charging – Office of Passenger Rail Franchising: set service standards; award & monitor franchises – Grant leases on rail stations – Develop subsidy arrangements where socially necessary • Re-Nationalization of Track Operations in 2001: – Network Rail, a not-for-profit company UK: Metropolitan Counties • Metropolitan District Council: – Control of Land Development – Granting Planning Permissions – Build/Maintain Local Roads, Traffic Management, Parking • Passenger Transport Authority: – Award Agreements to Provide Public Transport – Administer Concessionary Fare Schemes (e.g. to Disabled & Elderly) – Ensure School Transport Services – Identify & Subsidize Socially Desirable Service – License Taxis & Private Hire Cars UK: Non-Metropolitan Counties • Difference from Metropolitan Counties: – Public Transport is Administered Directly by Councils, Not by Passenger Transport Authorities UK: Land Use Planning with respect to Transport • Strategic Planning: – London & Metro Counties: Unitary Plans – Non-Metro Counties: • County Councils: Structure Plans • Local Governments: Local Plans • Local Planning and Land Use Policies Must: – Promote Development at Locations Highly Accessible Without a Car – Locate Major Generators in Existing Centers with High Accessibility Without a Car – Strengthen Existing Local Centers that Already Have Community/Shopping/ Employment Opportunities – Limit Parking Provision to Discourage Reliance on the Car II. Transport Funding UK: Finance • Trends and Conditions in the UK: – After Privatization, Reduced Direct Provision – Funding from Treasury through National Budgetary Process – Funding from the European Community for Links to Other Member States – Rail Access Charges Paid by Train Operators – Private Investment in Rail Infrastructure – Block Grants to Local Governments – Private Capital in Exchange for Planning Permission USA: Evolving Methods of Raising Funds • Report by Martin Wachs: 1. What funding methods are in decline, and why? 2. What funding methods are on the rise, and why? 3. What does Dr. Wachs suggest for the future of USA transport funding? Why? 4. Do these recommendations have any relevance outside the USA? USA: Evolving Methods of Raising Funds • Development Fees • Property Taxes • Fuel Taxes • Transit User Fees (Fares) • Road User Fees (Tolls) • Vehicle Registration Fees • Sales Taxes • Government Bonds, Paid Back by: – General Funds – Tolls – Sales Taxes Fuel Taxes • Fixed Amount per Volume of Fuel Purchased • Primarily Federal Government • Relevant Trends: – Inflation – Fuel Economy • Result: – Gas Tax Receipts Sharply Declined Over Last 30 Years Development Fees • Developers of Land Required to Construct and Cede Streets to the Public • Local Governments • Relevant Trends: – Increased Competition Among Local Jurisdictions • Result: – Local Governments Often Charge Less in Fees Than Services Cost Property Taxes • Percentage Tax on Value of Home • Primarily Local Governments • Relevant Trends: – Rapid Increases in Home Values Can Make Taxes Overly Burdensome – Caps on Property Taxes are Common; But Limit Ability of Receipts to Keep Up with Inflation • Property Tax Receipts Have Declined User Fees: Road Tolls • Fixed Fee for Use of Roadways • Primarily State Government • Relevant Trends: – Very Unpopular and Politically Difficult – Some Very Old Toll Roads Persist – Some Recent Increases in Acceptance User Fees: Transit Fares • Fixed Fee for Use of Public Transit • Local Transit Agencies • Relevant Trends: – Raising Fares Runs Counter to Increasing Mode Share Vehicle Registration Fees • Annual Fee for Auto Registration; May be Fixed, or Tied to Value of the Auto • Primarily State Government, Sometimes Local Districts • Relevant Trends: – Increases with Number Cars, so Tends to Increase with Income – Some have been struck down in court as excessive Sales Taxes • Percentage Tax on All Sales Transactions • State & Local Governments • Relevant Trends – Diffuse Effect, so Less Unpopular – Increasing in Use Government Bonds • Government Borrows by Issuing Bonds • Primarily States • Relevant Trends – Must be Repaid by Tolls or Taxes – Increasing Use by Politicians – Unsustainable if Overused Future Possibilities • Fees Adjusted to Reflect Costs on Society – Charge More to Heavy Trucks • Electronic Toll Systems – Tolls without Queues – Vary with Congestion Level – Vary with Road Segment Wachs’s Recommendations • States Assume Responsibility • Plan for Widespread Electronic Tolling • Develop Pricing Strategies for Efficient Use • Develop Pricing Strategies According to Costs