The Case for State Fuel Taxes to Support "Transit Operating Assistance"
"The Plan..." is shown on side A.
Farebox revenues can exceed 50% or more based on statistics for frequent bus services. Thus, the cost to the State for 24 hour / 7 day bus service is about $21 Million per year and can be less depending on cooperative efforts as described in the presentation.
State CTF fuel taxes are proposed to pay both capital and operating costs permanently along the routes on side A. The logistics behind this is what is known as Transit Oriented Development to promote economic growth. This can result when everyone in the entire world knows that if they move to or visit downtown Detroit that they will always have near instant clean safe bus service.
The Brookings Institute documents that the use of State fuel taxes for "transit operating expenses" provides unmatched flexibility to maximize limited transportation tax dollars. This is because these taxes allow frequent bus services at reasonable costs by means of increased farebox to revenue ratios without having to serve everyone. Its well documented that mass transit can be cost-effective compared to adding more roads. The uses of other tax mechanisms are most effective with mass transit on a level-playing field with freeways because it promotes the most efficient and best use of transportation tax dollars.