Harrisburg doesn’t want to adequately fund transit, but they also don’t want to give local governments the tools to fund it themselves. One or both of these things has to change, and at the very least it should be the second.
I don’t like the usual local sales tax option because it’s so regressive, and that’s why I keep beating the drum for value capture.
Public transit investments increase the land value of nearby properties. Value capture financing levies a small land tax on transit-adjacent land to fund transit, “capturing” back some of the windfall. PA has a version of this called a TRID (Transit Revitalization Investment District) that works like a traditional Business Improvement District except for transit improvements. I don’t really like it that much, since the money has to stay within the district and fund capital improvements. I think cities should be allowed to use that money for the operations budget.
Minneapolis isn’t doing that, and their new streetcar funding plan is closer to the TRID concept, but I want to keep reminding everyone that value capture is a good idea, and landowners are the only users of the transportation network who aren’t being asked to chip in on the new funding bill:
One provision in the state tax bill could have a significant impact on Mayor R.T. Rybak’s dreams of building a streetcar in Minneapolis.
The bill allows the city to dedicate tax revenues from several specific parcels around Minneapolis to help pay for a new streetcar line. The city pushed for the new funding method because, unlike regional transit like light rail, streetcars would be a localized project requiring more municipal investment […]
The “value capture district” designated by the state for funding streetcars is similar to tax increment financing. It uses revenues from parcels near the transit line to pay off bonds issued to build it.
The money could be used to pay for planning and constructing the streetcar line, including transit stations, as well as acquiring or improving public space, according to the legislation.