In this report, we examine both the substantial research literature on transit pricing and use and literature on free- and reduced fare (FAR) programs. In general, we find that FAR programs can take many forms, and the idea of “fare-free” transit is far from a one-size-fits-all proposition. Second, while reducing or eliminating fares does indeed increase ridership, all else equal, transit research has consistently found that riders tend to be more service elastic than fare elastic. In other words, they tend to respond more to service improvements than price reductions, which means that, at the margin, money “spent” on fare-free programs (in the form of foregone revenues) may attract fewer riders than if that money were put toward improving service. And third, the social equity dimensions of fare-free transit are many, ranging from considering the share of fare-free benefits that flow to higher-income riders to the potential racial equity benefits of reduced fare enforcement policing on transit.

Driving rates decline with age as vision, health, and cognitive ability cause some older adults to give up driving. Many older adults first gradually limit their driving as they age and later cease driving. Using data from the Health and Retirement Study (HRS), which surveys 22,000 older Americans every two years, we modeled the extent to which older drivers limit and stop driving. The data are longitudinal, allowing analysis of changes in driving and residential location as well as cohort effects that could not be studied using standard, cross-sectional survey data that only allow comparisons of different people at one point in time. The analysis shows that decisions to limit and eventually stop driving vary in statistically significant ways with sex, age, and health conditions. These relationships also differ by birth cohort. More recent cohorts are less likely to stop and limit driving than older ones. To analyze the relationship between residential location and driving behavior, we linked the HRS data to census-tract level data from the US Census and a categorization of community types. We found that residential density and other urban built environment features are associated with changes in driving and vehicle ownership. HRS survey participants showed a greater propensity to reduce or give up driving if they resided in denser, more diverse, transit-oriented neighborhoods. People who prefer non-automotive modes of transportation may have been more likely than others to self-select into walkable and transit-rich areas. The findings should inform California’s strategic planning for aging and its community development policies. In addition to informing planning for the next generation of older Californians, this study demonstrated the utility of longitudinal information and models for the understanding of older populations and their travel.

The COVID-19 pandemic upended transit use, finance, and management. To investigate these effects two years into the pandemic, we conducted 21 semi-structured interviews with senior managers at transit agencies in the most populous U.S. state, California. We found that the pandemic generated many operational and managerial challenges for transit agencies. Ridership plummeted, then slowly recovered, but is still well below pre-pandemic levels at most agencies. Commuter trips to and from major job centers were especially slow to return. In response to decreased demand, public health concerns, and uncertain finances, many agencies cut services and spending early on. As a result, fare revenues declined, in some cases precipitously. However, federal pandemic relief funds proved essential in filling budgetary gaps, stabilizing finances, preventing layoffs, and maintaining services. Other transit subsidies mostly bounced back robustly. Our interviews suggest that, though California transit agencies experimented with free fares, few fareless programs were made permanent. Their challenges include considerable uncertainty associated with future travel demand, looming financial shortfalls at systems that formerly had high farebox recovery and are still drawing on federal pandemic funds to backfill their fare revenue losses, and protracted labor shortages of drivers and mechanics that are preventing many systems from providing desired levels of service.

The COVID-19 pandemic dramatically affected transportation systems, including the ability of localities to pay for them. We explore the effects of the pandemic and the associated economic turbulence on local option sales taxes (LOSTs), an increasingly common revenue source for transportation in California and across the U.S. LOSTs have many advantages over alternative finance instruments, and they can raise prodigious amounts of revenue. However, LOST funding relies on consumer spending. During times of economic weakness, spending and therefore LOST revenues will lag. This is precisely the pattern we observe in California counties during the initial months of the pandemic. Fortunately for local transportation budgets, LOST revenues recovered after the initial economic shock of COVID-19, albeit at a lower level than they likely would have otherwise. LOST revenue trends during the pandemic were affected by national and regional economic conditions and government policy as well. This public health crisis illustrates both the pitfalls and resilience of LOSTs during economic downturns and recoveries. The lessons from the pandemic’s effects on LOSTs will be useful for policymakers and analysts in preparing for inevitable future economic fluctuations.

This study reports on the recent past, present, and immediate future public transit finance in Southern California in light of the impacts of the ongoing COVID-19 pandemic. To do this, we draw on transit agency budgets, interviews, preliminary survey results, and other datasets and reports. Initially, the financial situation of transit operators in the region appeared dire, with plummeting ridership and fares and rising subsidies and operating costs. However, the three enormous federal pandemic relief bills brought $4.4 billion to Southern California transit agencies and helped the region weather the fiscal storm, until many of the state and local tax revenue sources on which the region’s transit agencies rely bounced back—and more quickly than most forecasters initially predicted. This is, in other words, the story of successful public policy intervention to the benefit of both the region’s transit riders and workers, though most operators nonetheless cut service and their workforces to varying degrees during the pandemic. The principal dilemma facing the region’s transit operators in 2022 is not a depressed economy, but an overheated one plagued by labor shortages, supply-chain bottlenecks, and inflation—as agencies plan for the end of large-scale federal operating support and an uncertain ridership future.

Voter-approved Local Option Transportation Sales Taxes (LOSTs) are a major source of revenue for transportation programs in California. LOSTs list projects and programs for voter approval that are to be implemented over long periods of time, often twenty or more years. To respond to changing conditions, agencies often need to amend voter-approved plans. Implementing agencies must be accountable to voters, balancing the need to fulfill commitments made against needs that change over time. Using the text of ballot measures, public utility codes, periodic agency reports, and case studies that included interviews of public officials, this study examines, provisions regarding accountability in California LOSTs, and procedures for amending proposed expenditures. It also reviews lawsuits brought in relation to accountability and plan amendments. It analyzes the ways in which California counties achieve needed flexibility within a framework that demands accountability to the voters. Requirements and patterns differ among counties, but most measures have been adapted to changing circumstances.