As a result of years of insufficient funding, transit systems across the U.S. are struggling to cope with aging infrastructure and limited funding, creating a massive and increasing backlog. The most recent federal estimate quantifies the backlog of projects needed to attain a “state of good repair” at $90 billion and is projected to grow to $122 billion by 2032. The backlog was primarily in fixed guideway modes such as rail, due to specialized infrastructure requirements, such as tracks and stations, as opposed to roadway modes, likes buses, which utilize existing roads and bridges.
In addition to the fare revenue they collect and other directly-generated revenues (e.g. parking and ad monies), transit agencies may receive money from federal, state, and/or local governments. In 2015, 45% of operating expenses were paid for through fares and other directly generated funds, while 55% of expenses were paid with public funds, primarily from state and local governments. The federal government is an important source of funding for capital expenditures in public transportation; federal funds covered 42% of capital expenditures in 2015, while state and local governments contributed 36% and directly generated funds paid for 22%. The total operating expenses for the nation’s public transportation systems in 2015 totaled $46.3 billion and total capital expenditures equaled $19.3 billion. The majority of capital spending in transit (64% in 2015) was focused on improving existing service, as opposed to expanding it.