USING SALES TAX TO SUPPORT LOW-FARE PRICING OF TRANSIT SERVICES IN ATLANTA

The primary income source for the implementation of MARTA; $2.1 billion transit development program is a 1 percent sales and use tax levied in the two county implementation district. To overcome the inequity of a regressive sales tax, a policy of maintaining low fares was established, and both sales tax and fare revenues were applied to meet development and operating costs. A survey of riders indicated that the increase in ridership was 30 percent taking into account new riders and additional old-rider trips versus continuing old-rider trips. Characteristics of ridership and public economy aspects are discussed. The Atlanta low-fare and sales tax transit pricing experience leads to two primary conclusions. First, low systemwide fares attract additional transit riders, significantly from previously nontransit market. Second, with a low fare, subsidy drawn from sales tax results in a progressive tax structure with desirable income-transfer effects. Survey data indicated that low fares attracted riders who then discovered the quality of transit service that was already available.

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    • This paper appeared in Transportation Research Board Special Report No. 181, Urban Transportation Economics. It contains proceedings of Five Workshops on Pricing Alternatives, Economic Regulations, Labor Issues, Marketing, and Government Financing Responsibilities held by Transportation Research Board. Sponsored by Office of the Secretary, Federal Highway Administration, and Urban Mass Transportation Administration of DOT; Environmental Protection Agency; and Federal Energy Administration. Distribution, posting, or copying of this PDF is strictly prohibited without written permission of the Transportation Research Board of the National Academy of Sciences. Unless otherwise indicated, all materials in this PDF are copyrighted by the National Academy of Sciences. Copyright © National Academy of Sciences. All rights reserved.
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    Transportation Research Board

    500 Fifth Street, NW
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  • Authors:
    • Bates, John W
  • Publication Date: 1978

Media Info

  • Media Type: Digital/other
  • Features: Tables;
  • Pagination: pp 45-49
  • Monograph Title: URBAN TRANSPORTATION ECONOMICS
  • Serial:

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Filing Info

  • Accession Number: 00176486
  • Record Type: Publication
  • Files: TRIS, TRB, ATRI
  • Created Date: Nov 14 1981 12:00AM