Contents

• Introduction
• What Is Public Transportation?
• Funding the Federal Transportation Program
• How Federal Dollars Are Distributed and Spent
• Federal Public Transportation Programs
• Urbanized Area Formula Program (49 U.S.C. §5307)
• State of Good Repair Program (49 U.S.C. §5337)
• Capital Investment Grants Program (49 U.S.C. §5309)
• Low or No Emission Vehicle Program (49 U.S.C. §5339(c))
• Bus and Bus Facilities Program (49 U.S.C. §5339)
• Rural Area Formula Program (49 U.S.C. §5311)
• Enhanced Mobility of Seniors and Individuals with Disabilities Program (49 U.S.C. §5310)
• New Programs
• Community Project Funding/Congressionally Directed Spending

Introduction

Federal funding assistance to public transportation agencies is provided primarily through the public transportation program administered by the Department of Transportation's (DOT's) Federal Transit Administration (FTA). The federal public transportation program was authorized from FY2022 through FY2026 as part of the Infrastructure Investment and Jobs Act (IIJA; P.L. 117-58). As with previous authorization acts, the IIJA funds public transportation from the mass transit account of the Highway Trust Fund (HTF). Unlike previous authorization acts, the IIJA also provided funding with a multiyear advance appropriation from the general fund of the U.S. Treasury. Consequently, the IIJA provided a large nominal increase in annual federal funding for public transportation when compared with the annual amount provided in the previous authorization, the Fixing America's Surface Transportation (FAST) Act (P.L. 114-94) of 2015.¹

Major federal involvement in public transportation dates to the Urban Mass Transportation Act of 1964 (P.L. 88-365). Before the mid-1960s, there was little public funding of public transportation. With ridership much lower than at the end of World War II and mounting debts, many private transit companies were reorganized as public entities. Federal funding was initially used to recapitalize transit systems. Today, the federal program's focus is still on the capital side, but it now supports some operational expenses and safety oversight, planning, and research. In FY2020 and FY2021, Congress provided supplemental appropriations to support transit agencies' operational expenses in response to COVID-19. Public transportation ridership dropped by an unprecedented amount due to the pandemic and is still about 20% below its pre-COVID-19 level.

What Is Public Transportation?

Public transportation is defined in federal law (49 U.S.C. §5302)² as

regular, continuing shared-ride surface transportation services that are open to the general public or open to a segment of the general public defined by age, disability, or low income; and … does not include—(i) intercity passenger rail transportation …; (ii) intercity bus service; (iii) charter bus service; (iv) school bus service; (v) sightseeing service; (vi) courtesy shuttle service for patrons of one or more specific establishments; or (vii) intra-terminal or intra-facility shuttle services.

The main forms of public transportation are bus, heavy rail (subway and elevated), commuter rail, light rail, paratransit (known as "demand response"), and ferryboat.³ Paratransit is non-fixed route service—often for the elderly and persons with disabilities—using automobiles, vans, and small buses in response to passengers' calls. In 2019, the year prior to the pandemic disruptions, about 48% of public transportation trips were by bus, 38% by heavy rail, 5% by commuter rail, and 5% by light rail (including streetcars). Paratransit accounted for about 2% of all public transportation trips; other modes, including ferries, accounted for about 2%. In 2024, these mode shares were mostly the same, but buses accounted for 51% of trips and heavy rail accounted for 35%.⁴

Providing public transportation has been a challenge since post-World War II. Numerous interrelated factors have affected demand—particularly rising incomes, growing automobile availability and use, and residential and employment decentralization. Nevertheless, ridership increased from 7.8 billion trips in 1995 to 10.8 billion trips in 2014. Ridership then dropped in the years prior to the COVID-19 pandemic to about 10.0 billion trips in each of 2018 and 2019. The COVID-19 pandemic caused national ridership to drop dramatically in 2020, to about half the prepandemic level in 2021. Ridership has since recovered to 8.1 billion trips in 2025 (Figure 1).⁵

Figure 1. Public Transportation Ridership, 1995-2025

Sources: American Public Transportation Association (APTA), Public Transportation Fact Book 2025: Appendix A, 2025, Table 1; APTA, Public Transportation Ridership Report, Fourth Quarter 2024 and 2025, p. 1.

Funding the Federal Transportation Program

The IIJA provided about a 67% increase (in nominal dollars) in annual funding for public transportation in comparison with the period authorized by the FAST Act, as extended (Figure 2). Public transportation program funding averaged $12.8 billion annually in the period FY2016 through FY2021, whereas the amount authorized and appropriated in the IIJA was $21.4 billion annually from FY2022 through FY2026 (unadjusted for inflation). These amounts exclude $69.5 billion in response to COVID-19 and $554 million provided through the Public Transportation Emergency Relief (ER) Program.⁶

Figure 2. Federal Public Transportation Program Funding, FY2016-FY2026

Sources: CRS analysis of Senate appropriations reports; Infrastructure Investment and Jobs Act (P.L. 117-58); Consolidated Appropriations Act, 2022 (P.L. 117-103); Consolidated Appropriations Act, 2023 (P.L. 117-328); Consolidated Appropriations Act, 2024 (P.L. 118-42); Full-Year Continuing Appropriations and Extensions Act, 2025 (P.L. 119-4); and Consolidated Appropriations Act, 2026 (P.L. 119-75). Notes: Amounts in current dollars. FAST Act = Fixing America's Surface Transportation Act (P.L. 114-94).

Historically, about 80% of federal public transportation program funding came from the HTF's mass transit account, and 20% came from the U.S. Treasury's general fund. The FY2018-FY2021 (P.L. 115-141, P.L. 116-6, P.L. 116-94, and P.L. 116-260) appropriations acts provided additional general fund money for several programs that in the past received federal money only from the HTF, thereby raising the general fund share overall to about 28% in FY2018, 26% in FY2019, 21% in FY2020, and 22% in FY2021. The general fund share of funding in the IIJA for the period FY2022-FY2026 averaged 35%. After enactment of annual appropriations bills, the actual share was 35% in FY2022, 36% in FY2023, 33% in FY2024, 32% in FY2025, and 30% in FY2026.⁷

Public Transportation ER program and COVID-19 relief funding were appropriated from the general fund. While most federal funding for public transportation is typically directed toward capital expenditures, pandemic-related funding was mainly intended to support operating expenses. This included employee pay, fuel, and extra pandemic-related costs, such as the intensive cleaning of vehicles and stations and purchase of personal protective equipment. Most COVID-19 relief funding was distributed to state and local transit agencies via the existing urbanized area and rural formulas.⁸

In addition to FTA monies, federal funding for public transportation is available from several surface transportation programs that allow federal highway money to be spent on public transportation projects and from nontransportation programs in areas such as health, education, and veterans affairs. In FY2024, about $1.5 billion was transferred (or "flexed") from highway programs to public transportation.⁹ The Local and Regional Project Assistance Program (known variously as BUILD, RAISE, and TIGER), administered by DOT's Office of the Secretary, also has been a source of federal funding for public transportation. From FY2009 through FY2025, about $3.8 billion (in constant 2025 dollars) was awarded to public transportation projects, an average of about $220 million per year.¹⁰ In 2019, the federal interagency Coordinating Council on Access and Mobility identified 130 federal nontransportation programs targeted to entities that serve people with disabilities, older adults, and individuals of low income in which transportation is an eligible expense.¹¹ The total amount of this nontransportation funding used for public transportation is unknown.

How Federal Dollars Are Distributed and Spent

About two-thirds of IIJA funding was authorized to be distributed (apportioned) by formula annually. The remaining amount was authorized to be distributed competitively or for special purposes (e.g., capital and preventive maintenance grants to the Washington Metropolitan Area Transit Authority). Formula funding is distributed to local public authorities in large urbanized areas (i.e., places with a population of 200,000 or more), and to state governments for redistribution to small urbanized areas (i.e., places with a population of 50,000 to 199,999) and rural areas (i.e., areas with populations below 50,000).¹² Formula factors vary by program. Table 1 shows estimated distributions for some of the largest urbanized areas. Table A-2 shows estimated distribution by state/territory.

The costs of providing public transportation service fall into two main categories, operating expenses and capital expenses. Operating expenses include vehicle operation and maintenance, maintenance of stations and other facilities, general administration, and purchase of transportation from private operators. Capital expenses are related to the purchase of equipment, such as buses, rail lines, and rail stations. In general, federal public transportation programs allow an 80% maximum matching share for capital projects and a 50% maximum share for operating expenses.

The COVID-19 pandemic has had an unprecedented effect on transit agency budgets, including operating revenues and sources of government support (see Figure 3).¹³ In 2019, the year prior to the pandemic, fares and other operating revenues supported about 34% of operating costs and 24% of total costs. In 2023, fares and other operating revenues, supported 22% of operating costs and 16% of total costs. Federal support of operating costs was 8% in 2019, 39% in 2022, and 16% in 2023. Federal support of capital costs was between 32% and 38% over the 2019-2023 period.

Figure 3. Sources of Funding for Operating and Capital Expenditures in Public Transportation Provision, 2019-2023

Source: APTA, Public Transportation Fact Book: Appendix A, 2025, Table 95. Note: Local government expenditure sources include funds from local taxes, toll transfers, and bond proceeds.

Federal Public Transportation Programs

FTA administers seven major programs: (1) Urbanized Area Formula; (2) State of Good Repair (SGR); (3) Capital Investment Grants (CIG); (4) Low or No Emission Vehicle (Low No); (5) Bus and Bus Facilities; (6) Rural Area Formula; and (7) Enhanced Mobility of Seniors and Individuals with Disabilities. (See Table A-1 for other, smaller programs.) In past surface transportation reauthorization acts, funding for all public transportation programs, except CIG, came from the HTF's mass transit account.¹⁴ Funding for CIG was authorized to be appropriated from the general fund and required additional action from Congress to be made available. IIJA funding combines money from the HTF and appropriated funding and authorized appropriations from the general fund. The combinations of these funding sources vary (Figure 4). For CIG, the IIJA appropriated and authorized money from the general fund.

Figure 4. Federal Public Transportation Program Funding by Program Funding Authorized and Appropriated in the IIJA, FY2022-FY2026

Source: CRS analysis of the Infrastructure Investment and Jobs Act (IIJA; P.L. 117-58).

Urbanized Area Formula Program (49 U.S.C. §5307)

The Urbanized Area Formula Program provides funding for public transportation in urbanized areas, places designated by the Census Bureau as having populations of 50,000 or more. Funding provided in the IIJA was $6.4 billion for FY2022, an amount rising to $7.0 billion in FY2026 under current law. Funds can be spent on capital, planning, job access and reverse commute projects, and, in some circumstances, operating expenses. For urbanized areas under 200,000, the distribution of funds is based on population, population density, and the number of low-income individuals. In addition to these factors, in urbanized areas of 200,000 or more, the formula is also based on bus revenue vehicle miles, passenger miles, and operating costs, as well as fixed-guideway revenue miles, route miles, passenger miles, and operating costs.

State of Good Repair Program (49 U.S.C. §5337)

The SGR program provides funding for repairing and upgrading rail transit systems and other fixed-guideway systems (e.g., passenger ferries and bus rapid transit) and bus systems that use high occupancy vehicle (HOV) lanes.¹⁵ SGR funding totaled $4.5 billion in FY2022—$3.5 billion authorized from the HTF and $950 million appropriated from the general fund. SGR funding is to rise to $4.8 billion in FY2026 under current law. From the total amount for SGR, $300 million is made available per year for a competitive rail vehicle replacement program, with the remaining amount distributed by formula. The formula element of SGR has two components:

• The High Intensity Fixed Guideway SGR Program distributes 97.15% of the funding for maintaining fixed guideway transit systems in a state of good repair. The new formula for distributing these funds uses fixed guideway vehicle miles and route miles for facilities that have been operating for at least seven years.
• The High Intensity Motorbus SGR Program distributes 2.85% of the funds for transit bus service provided on an HOV facility. Funding is distributed by a formula that uses high-intensity bus vehicle miles and route miles for revenue services that have been operating for at least seven years.

Capital Investment Grants Program (49 U.S.C. §5309)

The CIG program provides funding to support construction of new rail, bus rapid transit, and ferry systems and to expand existing systems. The IIJA appropriated $1.6 billion per year from the general fund and authorized another $3.0 billion per year from the general fund subject to appropriation. Annual appropriations were $2.2 billion in FY2022, $2.6 billion in FY2023, and $2.2 billion in FY2024.¹⁶ CIG funding is available on a competitive basis in which project sponsors undertake a multistep process to become eligible for funding. A CIG project must go through three stages: project development, engineering, and construction. For CIG projects known as Small Starts—generally those requesting less than $150 million in federal assistance and costing less than $400 million—there are two phases: project development and construction.

Low or No Emission Vehicle Program (49 U.S.C. §5339(c))

The Low No competitive grant program provides funding for capital expenses to purchase or lease buses that emit low levels of pollutants, including greenhouse gases. Facilities that support these buses are also eligible for funding. IIJA funding totals about $1.1 billion a year: $1.05 billion appropriated from the general fund and the rest authorized from the HTF. In the previous authorization of public transportation programs as extended, Low No was funded at $55 million per year for FY2016 through FY2021. An additional $75 million was provided in FY2022 annual appropriations and an additional $50 million in FY2023 annual appropriations.¹⁷

Bus and Bus Facilities Program (49 U.S.C. §5339)

The Bus and Bus Facilities Program provides funding for capital expenses to purchase and rehabilitate buses and construct bus-related facilities, such as maintenance depots. In FY2022, the program was authorized at $980 million, with $604 million (62%) for formula grants and $376 million (38%) for discretionary grants. Bus program funding increases to $1.1 billion in FY2026 under current law, with $662 million for formula grants and $412 million for discretionary grants. The formula portion of the grant program provides each state and territory a minimum allocation ($4 million to states and $1 million to territories). Remaining funds are distributed by population and service levels. In FY2022 and FY2023 annual appropriations, an additional $175 million and additional $90 million were provided for the competitive program, respectively.¹⁸

Rural Area Formula Program (49 U.S.C. §5311)

The Rural Area Formula Program provides funding to states and Indian tribes for public transportation outside of urbanized areas. Capital, operating, and planning expenses are eligible. Funding of $875 million was provided in FY2022, rising to $960 million in FY2026 under current law. The formula used to apportion program funds includes rural land area, population, vehicle revenue miles, and the number of low-income individuals. Program funds are set aside for the Rural Transit Assistance Program, Public Transportation on Indian Reservations Program, and Appalachian Development Public Transportation Assistance Program.

Enhanced Mobility of Seniors and Individuals with Disabilities Program (49 U.S.C. §5310)

The Enhanced Mobility of Seniors and Individuals with Disabilities Program provides funding to support specialized public transportation for these population groups. Program funding totaled $421 million in FY2022, which increases to $457 million in FY2026 under current law. Of these amounts, $50 million was appropriated from the general fund and the rest was authorized from the HTF. Under the law, 60% of the funds are apportioned to large urbanized areas, 20% to small urbanized areas, and 20% to rural areas. Within these categories, funds are distributed to specific areas based on the relative size of their elderly and disabled population. The program requires that projects come from a locally developed, coordinated human services transportation plan.

New Programs

The IIJA created four new competitive grant programs to be administered by FTA:

• The Station Accessibility Program provides funding to improve the disabled accessibility of older rail transit stations. The program received an appropriation from the general fund of $350 million per year.
• As SGR set-asides, Rail Vehicle Replacement Grants are for purchasing replacement transit rail rolling stock. The HTF provided the program $300 million per year.
• The Rural Ferry Service Program provides funding for scheduled ferry service serving at least two rural areas over 50 miles apart. The IIJA provided from the general fund an appropriation of $200 million per year; another $200 million per year was authorized subject to future appropriation. FY2022 annual appropriations provided $13.0 million, FY2023 appropriations provided $17.5 million, and FY2024, FY2025, and FY2026 appropriations provided $20 million.
• The Electric or Low-Emitting Ferry (ELEF) Pilot Program provides funding for purchasing ELEFs or modifying existing ferries. A general fund appropriation of $50 million per year was provided, and another $50 million per year was authorized subject to future appropriation. Of amounts made available for urban ferries in annual appropriations, no less than $3.25 million was for ELEFs in FY2022, $5 million in each of FY2023-FY2025, and $4 million in FY2026.

Community Project Funding/Congressionally Directed Spending

After a decade-long moratorium on community project funding/congressionally directed spending (CPF/CDS), or "earmarks," Congress began providing funding for Member-requested projects in FY2022.¹⁹ The annual appropriation for public transportation earmarks was $201 million in FY2022, $360 million in FY2023, $207 million in FY2024, and $148 million in FY2026. Projects were listed in explanatory statements accompanying the acts. P.L. 119-4 did not provide funding for public transportation CPF/CDS.

Appendix. Public Transportation Funding Authorized and Appropriated by the Infrastructure Investment and Jobs Act (IIJA)

Footnotes