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December 3, 2019

New Pathways to Old Funding Options for Public Transportation

What we found:

  • Regional transportation options in Southeast Michigan are limited and the RTA has been unable to raise the necessary funds to improve public transportation.
  • A new proposal would amend the Municipal Partnership Act to allow the counties that want increased transit options – Wayne, Oakland, and Washtenaw – to put a multi-jurisdictional transit tax on their ballots.
  • This new plan may succeed where previous RTA transit proposals have failed. However, it fails to explore options to fund transit beyond the local property tax.

It’s a problem advocates have acknowledged for years: public transit in Southeast Michigan lacks regional policies and coordination, resulting in gaps in service and transit deserts. Providers have improved their coordination in recent years, but without regional governance and funding, their ability to collaborate is limited.

The Regional Transit Authority (RTA) was created in 2012, in hopes it would be the catalyst to coordinate providers and bring that governance and funding. But the RTA has struggled to fulfill this mission, largely because the local communities have not authorized new funding: a 2016 1.2 mill property tax request for expanded regional services failed and a 2018 tax proposal did not make it to the ballot.

With the problem persisting, regional leaders are making another try. They recently announced proposed legislation that would allow a transit millage to be placed on the 2020 ballot. With the process created through the RTA not working, community leaders are exploring other options to fund public transportation.

New strategy, new hopes

The Municipal Partnership Act of 2011 allows counties, cities, villages and townships to join together to provide multi-jurisdictional services. The proposed amendments to the Act would allow for the approval of a municipal partnership tax levy to fund transit, pending voter approval. The municipal partnership could include only those local governments that want to be part of it (i.e., Macomb County does not have to be part of any agreement) and it would ensure that the tax revenue is used exclusively for transit (i.e., exempt revenue from being captured by other entities like downtown development authorities).

If enacted, a public engagement process would begin in coordination with the RTA, which would allow regional leaders to craft a three-county plan and millage rate that reflects local needs and willingness to pay. Regional leaders would then seek approval from each county commission to place the proposal on the ballot. Officials have not yet agreed on the service plan or tax rate, only saying that the rate would likely be less than the 1.2 mill 2016 request. 

After two times at bat with no luck, what makes the third try different? 

Leaders are hopeful that 2020 will be different from 2016 and ‘18. A few things make those in support of increased transit options hopeful.

The death of longtime Oakland County Executive L. Brooks Patterson, who only reluctantly supported the RTA in 2016 and not at all in 2018, has effected a significant change to its governance. His replacement, David Coulter, is an outspoken transit advocate. That does not mean that everyone in Oakland County agrees; support in the less populated areas of the county may still be lacking

Second, the new plan works around the RTA and its enabling legislation. Prior attempts in 2016 and 2018 required that all four counties in the region pass a tax proposal. If one county did not support it, the whole effort failed.

The new approach would allow for the creation of a coalition of the willing.” Any counties or communities that do not want expanded transit (i.e., Macomb County) do not have to join, but the door would be open for future participation to these local governments. Because state law allows for collaboration among all types of local units, it would also allow individual municipalities within Macomb County (e.g., inner ring suburbs like Warren, Eastpointe, and Roseville) to vote to join the transit group.

Finally, this process involves the county boards of commissioners and leaders in each county working with the RTA to develop a transit plan, which may increase local buy-in and investment in the proposal.

Meanwhile, RTA updated its plan 

The RTA revealed an updated transit plan for Southeast Michigan this past summer that includes increased rail and bus service. It requires $4 billion of new funding over 20 years to meet near-term priorities and an additional $5.7 billion over 20 years to meet aspirational goals, a total of $9.7 billion. As we discussed in a previous blog post, this plan is more of a vision to begin the discussion around public transportation in the region than an actual plan.

Many believe the required inclusion of Macomb County in any regional transit proposal forwarded by the RTA makes it a non-starter. The RTA released a statement in support of this new plan, stating that it supports any mechanism that provides an option to increase investment levels in mobility and transit throughout Southeast Michigan.

Where things stand

If these amendments to the law are enacted, voters could see a transit millage question on the ballot as early as November 2020. 

While some may question the need for increased public transportation in the age of Uber and a changing mobility landscape, our research suggests these new options will work well to complement, not replace, traditional public transportation. Recommendations we have pulled from the research to foster better regional transportation services include

  1. Concentrate on improving mobility rather than specific types of services
  2. Make sure public transportation is viewed as an important and viable transportation option rather than a service for those too poor to drive
  3. Regional governance and support for public transportation is critical
  4. Regional funding, with options beyond the local property tax, is necessary 

This new plan is really just a proposal for regional transportation governance and funding. We have yet to see how the plan would be developed to focus on all types of mobility, as well as how the leaders would market increased transportation options to residents throughout the region. 

The plan also continues to rely on the local property tax to fund public transportation, which we’ve suggested is overburdened in Michigan. Many states rely on sales taxes or other local taxes for this purpose, sometimes by spreading the tax burden among multiple types of taxes or by feathering tax rates so that those further from the urban core pay less. 

While moving forward to secure regional funding and governance of public transportation is important, it may be time to look into funding options beyond the local property tax and see what Michigan can learn from other states.

Research Associate

About The Author

Jill Roof

Research Associate

New Pathways to Old Funding Options for Public Transportation

What we found:

  • Regional transportation options in Southeast Michigan are limited and the RTA has been unable to raise the necessary funds to improve public transportation.
  • A new proposal would amend the Municipal Partnership Act to allow the counties that want increased transit options – Wayne, Oakland, and Washtenaw – to put a multi-jurisdictional transit tax on their ballots.
  • This new plan may succeed where previous RTA transit proposals have failed. However, it fails to explore options to fund transit beyond the local property tax.

It’s a problem advocates have acknowledged for years: public transit in Southeast Michigan lacks regional policies and coordination, resulting in gaps in service and transit deserts. Providers have improved their coordination in recent years, but without regional governance and funding, their ability to collaborate is limited.

The Regional Transit Authority (RTA) was created in 2012, in hopes it would be the catalyst to coordinate providers and bring that governance and funding. But the RTA has struggled to fulfill this mission, largely because the local communities have not authorized new funding: a 2016 1.2 mill property tax request for expanded regional services failed and a 2018 tax proposal did not make it to the ballot.

With the problem persisting, regional leaders are making another try. They recently announced proposed legislation that would allow a transit millage to be placed on the 2020 ballot. With the process created through the RTA not working, community leaders are exploring other options to fund public transportation.

New strategy, new hopes

The Municipal Partnership Act of 2011 allows counties, cities, villages and townships to join together to provide multi-jurisdictional services. The proposed amendments to the Act would allow for the approval of a municipal partnership tax levy to fund transit, pending voter approval. The municipal partnership could include only those local governments that want to be part of it (i.e., Macomb County does not have to be part of any agreement) and it would ensure that the tax revenue is used exclusively for transit (i.e., exempt revenue from being captured by other entities like downtown development authorities).

If enacted, a public engagement process would begin in coordination with the RTA, which would allow regional leaders to craft a three-county plan and millage rate that reflects local needs and willingness to pay. Regional leaders would then seek approval from each county commission to place the proposal on the ballot. Officials have not yet agreed on the service plan or tax rate, only saying that the rate would likely be less than the 1.2 mill 2016 request. 

After two times at bat with no luck, what makes the third try different? 

Leaders are hopeful that 2020 will be different from 2016 and ‘18. A few things make those in support of increased transit options hopeful.

The death of longtime Oakland County Executive L. Brooks Patterson, who only reluctantly supported the RTA in 2016 and not at all in 2018, has effected a significant change to its governance. His replacement, David Coulter, is an outspoken transit advocate. That does not mean that everyone in Oakland County agrees; support in the less populated areas of the county may still be lacking

Second, the new plan works around the RTA and its enabling legislation. Prior attempts in 2016 and 2018 required that all four counties in the region pass a tax proposal. If one county did not support it, the whole effort failed.

The new approach would allow for the creation of a coalition of the willing.” Any counties or communities that do not want expanded transit (i.e., Macomb County) do not have to join, but the door would be open for future participation to these local governments. Because state law allows for collaboration among all types of local units, it would also allow individual municipalities within Macomb County (e.g., inner ring suburbs like Warren, Eastpointe, and Roseville) to vote to join the transit group.

Finally, this process involves the county boards of commissioners and leaders in each county working with the RTA to develop a transit plan, which may increase local buy-in and investment in the proposal.

Meanwhile, RTA updated its plan 

The RTA revealed an updated transit plan for Southeast Michigan this past summer that includes increased rail and bus service. It requires $4 billion of new funding over 20 years to meet near-term priorities and an additional $5.7 billion over 20 years to meet aspirational goals, a total of $9.7 billion. As we discussed in a previous blog post, this plan is more of a vision to begin the discussion around public transportation in the region than an actual plan.

Many believe the required inclusion of Macomb County in any regional transit proposal forwarded by the RTA makes it a non-starter. The RTA released a statement in support of this new plan, stating that it supports any mechanism that provides an option to increase investment levels in mobility and transit throughout Southeast Michigan.

Where things stand

If these amendments to the law are enacted, voters could see a transit millage question on the ballot as early as November 2020. 

While some may question the need for increased public transportation in the age of Uber and a changing mobility landscape, our research suggests these new options will work well to complement, not replace, traditional public transportation. Recommendations we have pulled from the research to foster better regional transportation services include

  1. Concentrate on improving mobility rather than specific types of services
  2. Make sure public transportation is viewed as an important and viable transportation option rather than a service for those too poor to drive
  3. Regional governance and support for public transportation is critical
  4. Regional funding, with options beyond the local property tax, is necessary 

This new plan is really just a proposal for regional transportation governance and funding. We have yet to see how the plan would be developed to focus on all types of mobility, as well as how the leaders would market increased transportation options to residents throughout the region. 

The plan also continues to rely on the local property tax to fund public transportation, which we’ve suggested is overburdened in Michigan. Many states rely on sales taxes or other local taxes for this purpose, sometimes by spreading the tax burden among multiple types of taxes or by feathering tax rates so that those further from the urban core pay less. 

While moving forward to secure regional funding and governance of public transportation is important, it may be time to look into funding options beyond the local property tax and see what Michigan can learn from other states.

Research Associate

About The Author

Jill Roof

Research Associate

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