Using toll revenues to support transit operations

May 16, 2024

One way to offset VMT from highway expansions is to improve transit service in the vicinity of the project. The Caltrans Mitigation Playbook assumes a VMT reduction of two for every additional passenger-mile traveled due to improved transit.

Questions have arisen about whether toll revenues collected from a facility in need of mitigation could be used to support transit operations. At the state level, when enabling legislation was needed for tolling, such statutes sometimes listed transit ops as an eligible use. The current process, which allows the California Transportation Commission to approve tolling, places no restrictions on the types of eligible expenditures for toll revenues.

So questions on this topic tend to focus on the federal level, possibly due to the tradition of federal aid generally being directed at capital and not operations. Toll revenues, in contrast, are considered state and local revenues and not federal aid. Although toll revenues from federalized roadways – the vast majority of freeways – must be spent on purposes listed in Title 23 U.S.C., that title is quite expansive and encompasses both capital and non-capital items. Multiple agencies in California currently expend toll revenues from federalized facilities on transit operations.

Project sponsors desiring to use tolling revenues in this fashion must of course comply with all relevant state and federal requirements, including public disclosures about project alternatives during the CEQA and NEPA processes.

For further information, please contact Andrew Quinn or Eric Sundquist.