Impacts of Funding and Allocation Changes on Rural Transit in Texas

Project Description

Methods of allocating funding for rural transit districts (RTDs) have changed in the last several years. The Federal Transit Administration increased federal funding for non-urbanized (rural) transit under SAFETEA-LU. At the same time, the Texas Transportation Commission approved a needs- and performance-based formula for allocating state and federal funds among RTDs.

This research project had two goals: to assess whether these changes in federal and state rural transit funding have affected the ability of RTDs to match federal funds (a requirement to receive that funding), and to gauge whether these changes have affected service levels and ridership.

Significant results of the study concern the following:

• The gap between state and federal funds: RTDs often find it difficult to generate local revenues and so rely on state funds to match federal funds. The shortfall in state funds required to match available federal programs available to RTDs was estimated at $5.3 million in fiscal year 2010.
• Increased operational costs: Despite increased federal funding, increased operational costs affect RTDs' ability to maintain or enhance service. Fuel, insurance, and cost-of-living wage adjustments will cost RTDs an additional $2.0 million in fiscal year 2011.
• RTD level of service: As funding increased, level of service increased (in revenue miles). As level of service increased, ridership also increased. As funding decreased, RTDs' level of service decreased. As level of service decreased, ridership also decreased.

State planners can use this information to project anticipated changes in demand for public transit in rural areas and to craft appropriate strategies. Without future increases in state funding, RTDs will face an increasing burden to find local sources of funding for federal local-match requirements. A reduction in funding is likely to result in less transit in the communities served. A growing and aging rural population will also increase the demand.

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Link: Final Report

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