American public transit is funded by a combination of local, state, and federal agencies. At the federal level, the Federal Transit Administration (FTA) provides financial assistance and technical assistance to state and local transit providers. From fiscal year 2005 through fiscal year 2009, FTA’s funding scheme was governed by the SAFETEA-LU bill, which provided $286.4 billion in guaranteed funding. FTA provides grants through several programs, such as the New Starts program and the Transit Investment for Greenhouse Gases and Energy Reduction (TIGGER) program.
Historically, public transportation in the U.S. has depended on private investment. Congress first approved funding for public transit under the Urban Public Transportation Act (UMTA) of 1964 at a rate of $150 million per year. Under the 1970 UMTA that amount rose to $3.1 billion a year. Since then, passenger ridership has grown from 6.6 billion in the mid-1970s to 10.2 billion today. None of the major transportation systems in the U.S. generate enough revenue to cover their operating costs, but those with the highest percentages include the San Francisco Rapid Transit District with 71.6 percent and the Washington, D.C. Metropolitan Railroad System with 62.1 percent.
The most widely used source of funds for public transportation in the United States is the general sales tax. While most countries do not generally use automobile taxes for specific purposes, there are instances in the United States where this revenue is used to fund public transportation. For example, tolls on the Golden Gate Bridge in San Francisco are used to subsidize local bus and ferry services. Unlike in other Western countries, public transportation is used little and mostly by the poor, making it difficult to raise additional funds. In response to reduced federal support for public transportation, individual states and cities sometimes levy local taxes to maintain their transportation systems.