What are the most promising funding sources for transportation planning projects?

1 User fees

User fees are charges that users pay for accessing or using a transportation facility or service, such as tolls, fares, parking fees, or congestion charges. User fees can generate revenue for transportation planning projects, as well as influence travel behavior and demand. User fees can also reflect the true cost of transportation, including externalities such as pollution, noise, or congestion. However, user fees may face public opposition, equity issues, or legal constraints, depending on the context and design of the fee system.

2 Value capture

Value capture is a mechanism that captures some of the increased land value or economic activity that results from transportation investments, and uses it to finance those investments. Value capture can take various forms, such as tax increment financing, special assessment districts, development impact fees, or joint development. Value capture can leverage the benefits of transportation planning projects, as well as foster collaboration and coordination among different actors and sectors. However, value capture may require complex institutional arrangements, legal frameworks, and market conditions, as well as careful estimation and allocation of costs and benefits.

3 Grants and loans

Grants and loans are financial assistance that transportation planning projects can receive from different levels of government, international organizations, or private entities. Grants are usually non-repayable funds that are awarded based on certain criteria or objectives, such as innovation, sustainability, or equity. Loans are usually repayable funds that are offered at favorable terms, such as low interest rates, long repayment periods, or flexible conditions. Grants and loans can provide substantial and stable funding for transportation planning projects, as well as support strategic and integrated planning. However, grants and loans may be subject to competition, uncertainty, or bureaucracy, depending on the source and availability of the funds.

4 Public-private partnerships

Public-private partnerships (PPPs) are contractual agreements between public and private entities to deliver a transportation project or service, in which the private entity assumes some of the risks and responsibilities, and receives some of the revenues or returns. PPPs can mobilize private capital and expertise for transportation planning projects, as well as improve efficiency and quality of service delivery. PPPs can also foster innovation and accountability in transportation planning, as well as enhance public trust and satisfaction. However, PPPs may entail complex and lengthy negotiations, legal issues, or governance challenges, depending on the type and scope of the partnership.

5 Alternative fuels

Alternative fuels are fuels that can replace or supplement conventional fuels, such as gasoline or diesel, in powering transportation vehicles or systems. Alternative fuels can include biofuels, electricity, hydrogen, natural gas, or solar power. Alternative fuels can reduce greenhouse gas emissions and air pollution from transportation, as well as diversify and secure energy sources. Alternative fuels can also generate revenue for transportation planning projects, through taxes, fees, or incentives, as well as create new markets and opportunities for transportation innovation. However, alternative fuels may require significant upfront investments, infrastructure development, or policy support, depending on the availability and feasibility of the fuels.

6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?