Funding Transportation Districts


Funding for transit comes from federal, state, and local sources, but in Washington most of the funding is local level. State law allows the creation of Transportation Benefit Districts (TBD) with the authority to tax, and to spend the revenue to improve transportation in the district. These TBDs can use any one of the following taxes:

So in terms of tax support, a transit agency must pick one of the available options, and is then limited to what revenue can be raised within the caps on that option. King County Metro, for example, has maxed out the amount it can raise from sales tax, and since only one type of tax is allowed, that is the most it can get from tax revenue. Statewide, the situation is a little better, but averaged over all, agencies are at 80% of allowable revenue via voter approval.

Transit agencies are also funded by fares; King County Metro gets about a third of its funding from farebox recovery.

Seattle has a Special Transportation District, as do Metro and Sound Transit. But Puget Sound is not alone in this: many regions in the state have their own districts with some level of transit. 

Transit Capital Needs Assessment

This is a report from the State in 2019, which outlines trends in transit capital needs in Washington and has comparisons to other states: Transit Capital Needs Assessment. The report points out that in the Great Recession, most agencies continued service but that this was funded by pfutting off capital improvements. The report concludes, given the ages and expected lifespans of the buses, that transit agencies in the state are underfunded, and vehicle replacements are backlogged. Agencies have also not kept up with population growth, and in some cases are limited by their existing facilities; to expand, they would need, for example, new bus barns. There is no transit agency in the state that has a fleet at 50% of lifespan, and some have agencies average 20% or less. The transit agencies have sufficient funding to handle the capital needs, but they do not have funding do this and to restore system cuts made in 2008, or to grow operations to match population growth from the last 10 years. That report was in 2019, and assumed no economic downturn, but all of our transit operations have been hit hard by covid, and Federal funding has not been sufficient to fill the gap.

Note that with so many vehicles at the end of their lifespan, we should be allocating enough funding to replace with electric vehicles, which will decrease the maintenance and fueling costs significantly, while also improving air quality and reducing GHG emissions. It is also possible that if transit agencies partner up with utilities, they could get funding or financing from the utilities.

State Funding for Transit Compared Nationwide

Washington ranks #17 in the nation for transit funding per capita. We spend $14.07, which is well below the national average of $42.11 per capita. Most of these state are funding capital expenditures (including vehicle replacement), which leaves local agencies with just operating costs.

Alternative Funding Possibilities

Perhaps the biggest need is to remove the limit that TBDs may use only one type of taxable revenue. The State's report on Capital Needs suggests that given the amount of revenue required, a carbon fee, a payroll tax or funding via a transportation package would be the most feasible methods of funding transit.

For 2021, the state could give other taxing authority to local transportation districts. The Capital Needs report details these possible additional ways the state could allow local jurisdictions to fund TBDs:

Suggested new forms of revenue from the Alliance for Clean Jobs and Energy include the following:

It would also be better if the TBDs laws were changing to make it easier for council to approve taxes without going out to all the voters, and particularly (as for property taxes) to require a new vote every year.

Here's also a study on this from the Washington Climate Alliance.