With nationwide declines in sales tax revenues due to the recession, transit systems have had to develop innovative ways to overcome gaps in funding. Some transit systems are partnering with local businesses to help "stimulate" the economy by offering special discount programs to transit riders.
Snohomish, Wash.-based Community Transit is one of the many transit agencies that rely on sales tax revenues — in this case, 0.9 percent. For 2010, 56 percent of its budget is funded through sales tax, with the remainder being made up by other sources including fares and grants.
With consumer spending down, the agency's sales tax revenue fell about $20 million a year, resulting in major service cuts in 2010, including eliminating all Sunday service.
When the transit system announced its service cuts, a lot of their customers asked how they could help, said Community Transit spokesperson, Martin Munguia.
Stimulating the economy
As a way to boost those tax revenues, Community Transit developed its Buy Local for Transit campaign, which it implemented last November. This long-term effort, designed to support public transportation by encouraging people to shop in their communities, offers transit riders special discounts to participating local businesses.
The transit system developed a website featuring program information, a downloadable "I Buy Local for Transit" card and a growing list of participating businesses. Transit riders can also show their regional fare card to receive the discounts.
Aspen, Colo.-based Roaring Fork Transit Authority (RFTA), which receives 57 percent of its funding from sales tax revenues, already had a similar campaign in place promoting ridership during the off-season by offering coupons to bus riders for discounts at local businesses. Dawn Mullally Chase, RFTA's creative/marketing manager came up with the idea after seeing facts put together by the American Public Transportation Authority about how transit users could save an average of $9,000 yearly by curbing car usage. "What if someone did that, even on seasonal basis, and saved the money and put it back into their local economy?" she asked.
These campaigns are great examples of cost-effective ways to help boost revenues for both transit systems and local businesses, which could easily be incorporated by other transit systems across the country.
Educating your communities
In addition to helping boost local tax revenues, the "buy local" campaigns are a good educational tool, Munguia said, as it teaches people how the transit system is funded. "A lot of people think the bus fare pays for the ride. They don't realize that the fare only pays for about 18 percent of the cost of the ride."
Mungia said that, "when the system has to cut service, the more people that realize where [the transit system's] funding sources originate, hopefully they'll understand when we do make service cuts, why that is."
Transit systems owe it to themselves to educate riders and their communities about their funding sources, so they can build support for transportation-related legislation and a sense of understanding when fare hikes or service cuts are the only solution.