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Finance and Accounting - Transit Funding: coping with cuts
Finance & Accounting
Pages 10 (2510 words)
Transit Funding: coping with cuts Introduction The recent financial crisis and the resulting recession have forced over four-fifths of the transit systems in the United States to either reduce services or increase fares due to a sharp decline in government revenue both at the local and state level.
Between 2009 and 2010, over eight out of ten largest transit systems in the country estimated a serious shortfall in budget over the next 2-3 years. Many of these transit systems have been forced to reduce personnel. Besides, 50% of these transit systems have diverted their funds from capital use towards maintaining operations, thus preventing effective maintenance and upkeep of these systems (Katz, 2010). As a result of these recent issues, decline in funding is causing much discomfort and affecting the lives of millions who depend on the transit system for their daily needs. Schultz (2010) says that the primary issue facing transit systems in the massive shortfall in funding from local and state authorities. Transit funding in California The state of California has supported the transit system at all levels through various means. In terms of funding, California remains one of the top providers of revenue ($2.3 billion in 2008) even after excluding funding from federal and local sources. A major chunk of the funding comes from the excise and sales duty imposed on the sale of fuel. While most of the revenue derived through this method is spent on improving the roadways in the state, California is historically known to set aside a major part of the remaining funds for use by the transit system. ...
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