How would you fund transportation in America?

This blog post is in response to Sbuchtel's posting yesterday, which posed the question: How would you fund transportation in America?

Steve, to further your question about how to pay for transpotration…..Here is a great entry from the Urbanophile blog about how Chicago could pay for upgrading its transit system so it can go from good to great.

To nutshell it for ya:

States and localities are broke, particularly in Illinois. The job market continues to be terrible. And the public is in no mood to spend. Don’t fight the tape, people.

The CTA does not control any material funding lever except fares, which are already high. The remainder of the CTA’s money, save for some minor advertising income and the like, comes from a mixture of federal capital aid, and taxes whose rate is set by state law. So any change in the funding situation will require legislative action.

The CTA, Metra, and Pace are required by law to achieve 50% farebox recovery. This might not sound like much, but is much higher than most transit systems.

The cost to operate it is more or less fixed regardless of how many people actually ride.

Sources of Funds

Where then could the city look? Here are some ideas proposed in the Urbaophile post:

1. Land Value Tax. A land value tax is a tax not on dirt, but on a physical site. This does not include any improvements made to the site, such as buildings. A LVT discourages land banking and speculation, and encourages people to invest in their property. And, the value of a site is really not a function of what any individual person does. Rather, it is a result of overall community growth and investment.

2. Congestion Charges/Tolling. This would involve something along the lines of converting the freeways in the city into tollways, using the proceeds to fund road maintenance and operations, and also transit.

3. Automobile surcharges. This could include items such as additional registration fees or parking taxes.

4. Income taxes.