Public transit in Indiana is a major asset to the citizens of the State.  Not only does it provide transportation to over 27 million people annually, it is a major source of income and economic development.

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“...transit systems reach 39 counties in Indiana
and nearly 60% of Indiana’s citizens.”

Currently there are 38 transit systems dispersed throughout the State.  These transit systems reach 39 counties in Indiana and nearly 60% of Indiana’s citizens. Public transit is a major industry in Indiana, with the transit systems alone employing over 4,300 employees directly or indirectly.  In addition, Indiana is the home of many large manufacturers and suppliers that provide products to the transit industry such as Cummins, Allison Transmissions, and Braun.  A list of the transit-related companies in Indiana can be found in the appendix.
There are three broad categories of impacts that occur in Indiana because of the transit service supplied: economic impacts, environmental impacts, and social impacts.  This report summarizes those impact areas.

Economic Impacts
Like other modes of transportation, public transit plays an important role in the economy of the State of Indiana.  The 27 million passenger trips provided by public transportation in Indiana each year primarily serve workers going to and from their jobs and consumers traveling to buy goods and services.  Total annual retail sales associated with persons riding transit amounts to $104 million.
Tax revenues to State and local governments brought about by public transit amounts to an estimated $16.5 million.  Part of this tax revenue is due to increased property values attributed to transit which are estimated to be $31.2 million.

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“...the total (transit) employment
impact is over 4,300 (jobs)...”
 

There are 2,600 persons employed directly in the transit industry in Indiana, and, the total employment impact is over 4,300 due to the multiplier effect.  It is estimated that, if the transit industry were to disappear overnight, it would increase State unemployment expenditures by $7.73 million. In 1993, Indiana state government invested $20.4 million in public transportation through the  Public  Mass  Transportation  Fund. This represented  23%  of  the  total  transit expenditures that year. The remaining sources of funds were rider fares (27%), local government investment (28%), federal grants (20%) and other miscellaneous sources (2%).

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“...for every $1.00 that is invested in public
transportation, the return is $1.38, or a 38% return.”

The total economic impact of public transportation on Indiana is estimated to be $121.5 million annually based on an economic input-output model.  As a result, for every $1.00 that is invested in public transportation, the return is $1.38, or a 38% return.  And, because the State of Indiana is responsible for only 23% of transit funding,  each $1.00 that the State invests in public transportation creates a total economic impact of $5.96.

Environmental Impacts
Public transit offers a clean, and environmentally safe way to travel.  Transit produces fewer air pollutants than automobiles, and in highly congested areas, transit uses less energy. If there were no transit service provided in the State of Indiana, annual emissions of the harmful air pollutants non-methane hydrocarbons (NMHC), carbon monoxide (CO), and nitrous oxides (NOx) would increase by 460, 3,380, and 40 tons, respectively.  The estimated annual cost of cleaning up these additional air pollutants is approximately $6,500,000.
Because certain areas of the State, including NW Indiana and SE Indiana, are in non-attainment areas for air quality, the effects of a decrease in transit expenditures would likely hinder the chances of reaching the air quality standards.

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”If transit were eliminated in Indiana, an additional
$4.5 million would be lost to vehicle accidents.”

Transit also affects the amount of parking spaces needed in a downtown area, or any area where parking is a limited commodity.  When one person rides the bus downtown, especially during work hours, one less parking space is needed.  If transit were eliminated in the State of Indiana, an additional 6,900 parking spaces would be needed.  At an average cost of $7,600 for one structured parking space or $5,000 for one surface parking space, the cost to build these spaces would range from $35,000,000 to $53,000,000. Similarly, transit also impacts the amount of vehicle accidents that occur by reducing traffic congestion.  If transit expenditures are decreased, then additional cars will be added to the roadways and more accidents will occur.  If transit were eliminated in Indiana, an additional $4.5 million would be lost to vehicle accidents.

Social Impacts
Public transportation provides people with a choice: an opportunity to travel economically.  It also provides mobility for those who are too young, too old or too disadvantaged to own or operate a private vehicle. If transit were not available in Indiana, personal expenditures on transportation would increase by $18.2 million each year as bus riders sought other means of travel.  This increase in travel expenditures would cause a reduction of a similar amount in household consumption of other goods and services. With respect to impacts on disadvantaged persons, over 8% of Indiana households do not own an automobile and therefore rely on some form of public transportation.  About 10% of the State’s population is below poverty level and 4% of the population cannot travel without mobility assistance.

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“...Over 8% of Indiana households
do not own an automobile...”

Almost one quarter (23%) of the State’s population is too young to drive.  Without public transportation, young people miss opportunities to participate in a community’s activities or become a burden on their parents for transportation. Finally, the aging of the population is a recognized trend with fully 13% of the State’s population currently 65 years of age or older.  While today’s senior citizens are more active than in past generations, aging creates an increasing dependence on public transportation.

Conclusion
Transit impacts the economy of Indiana because it produces employment, sales, taxes, and reduces the amount of money spent on vehicle accidents, energy, parking, and air pollution control.  Transit serves as a means of transportation to the groups who cannot utilize other means of transportation because of their economic status, mobility limitation status or because of their age, (either too young or too old).  While these impacts do not possess a dollar value, they are among the strongest arguments for providing improved transit service.
 

1. Indiana’s 48 public transit operators provided over 31.6 million passenger trips in 2000 (31,579,698).  That is a 4.2% increase over 1999, following a 6.8% increase the previous year.

2. A 1999 national study conducted by Cambridge Systematics, Inc., “Public Transportation and the nation’s Economy,” estimated that for every $10 million invested in public transportation, more than $15 million is saved in transportation costs to both highway and public transit users.  These include operating, fuel, and congestion costs.

3. The public transit industry creates jobs.  For every $10 million invested in capital projects for public transportation, more than 300 jobs and a $30 million gain in sales for business are realized, according to the same 1999 study.  Each $10 million in operating investment yields $32 million in increased sales.

4. According to a 1994 study, conducted here in Indiana and commissioned by the Indiana Transportation Association, for every dollar invested in public transit , the state realizes an economic benefit of $1.38, a 38% return on investment.  The rate of return varies for different communities.  A case study done for Indianapolis yielded a return of 69%.

5. Transit provides access to jobs.  According to the American Public Transportation Association, in 1999, 94% of welfare recipients attempting to move into the workforce do not own cars and rely on public transportation.  In the ITA’s 1994 economic benefit study, a survey of Indianapolis bus riders found that  37% of those riders said they would lose their jobs if they were to lose their transit service.

6. Using public transit saves fuel, For a short 5 mile one-way commute to work, a commuter can save 157 gallons per year at an average speed of 15 m.p.h.  At 30 m.p.h, the fuel saving is 79 gallons.  Fuel savings go up as distance and congestion increase.

7. Using public transit also decreases air pollution and reduces congestion.  Reduced congestion allows cars to move more efficiently which further reduces pollution.  A 1996 Federal Transit Administration study reports that each year, America’s public transportation use avoids the emission of more than 126 million pounds of hydrocarbons, a primary cause of smog, and 156 million pounds of nitrogen oxides.

8. The ITA’s 1994 economic benefit study found that among Indianapolis public transit riders, 44% said they would be willing to pay $50 more in rent per month in order to live near a bus route.  The study also found that property tax values attributed to proximity to a transit route increased $31.2 million per year in Indiana.

9. Service has been expanding in Indiana, but the percentage of sales tax revenue going into the Public Mass Transit Fund (PMTF) has never been increased.  In 1996, there were 38 public operators in the INDOT annual report; in 2000, there will be 48.  In1997, 56% of all Hoosiers lived in the service area of one of our public transit providers.  As of January  2001, 70% of all Hoosiers lived in a public transit provider’s service area.  INDOT has announced a goal of including 80% of all Hoosiers by 2004.