8.3 Tax Incentives and Subsidy Programs

Use taxes and subsidies to provide disincentives to SOVs and incentives to alternative commute modes, thereby reducing vehicle trips and VMT.

Description

State and local tax incentive and subsidy programs provide incentives and/or disincentives for employers and employees to consider and utilize alternative modes of transportation to commute instead of SOVs.

Three types of financial incentives and their goals are summarized below:

• Tax incentives can allow employers and developers to provide facilities and equipment conducive to ridesharing. They may be in the form of investment tax credits or accelerated depreciation of facilities.

• Subsidy programs can help initiate a program by providing additional funding to enlist employer involvement and improve the preliminary risk to employers attempting a new program. The goal of the subsidies is for employers to see the benefits of the program and then continue the subsidies on their own to satisfy employee desire and/or to comply with regional or local mandates. Some subsidy programs target commuters directly, when employer involvement is unlikely or impractical. For example, vanpool subsidies tied to corridor reconstruction projects can aid in the formation of vanpools among commuters using the affected facilities regardless of their particular job location.

• Enabling legislation can eliminate or minimize barriers to widespread implementation of employer-based trip-reduction programs. A legal requirement mandating employer or developer involvement is a powerful determinant of program effectiveness. Mandatory participation is key to assuring widespread participation by enough employers to have an area-wide impact.

Application

Areas where taxes and public funding can be obtained for this purpose.

$$\text{Daily Emission Reduction (grams/day)} = A + B$$

$$A = \sum \mathit{VT}_{R} \times \mathit{TEF}_{\mathit{AUTO}}$$

Reduction in auto start emissions from trip reductions

$$B = \sum \mathit{VMT}_{R} \times \mathit{EF}_{B}$$

Reduction in auto running exhaust emissions from trip reductions

$$1 = F_{T,\mathit{SOV}} + F_{\mathit{RS},\mathit{SOV}} + F_{\mathit{BW},\mathit{SOV}}$$

The fractions of strategy participants that shift to other modes from single-occupant vehicles

$$\mathit{VT}_{R,T} = N_{T} \times F_{T,\mathit{SOV}} \times 2 \ \text{trips/day}$$

$$\mathit{VT}_{R,\mathit{RS}} = N_{\mathit{RS}} \times (1 - 1 / \mathit{AVO}_{\mathit{RS}}) \times F_{\mathit{RS},\mathit{SOV}} \times 2 \ \text{trips/day}$$

$$\mathit{VT}_{R,\mathit{BW}} = N_{\mathit{BW}} \times F_{\mathit{BW},\mathit{SOV}} \times 2 \ \text{trips/day}$$

The number of participants multiplied by the fraction of SOV drivers that switch to another mode multiplied by two trips per day (round trip)

$$\mathit{VMT}_{R,T} = \mathit{VT}_{R,T} \times (\mathit{TL}_{W} - \mathit{TL}_{T})$$

$$\mathit{VMT}_{R,\mathit{RS}} = \mathit{VT}_{R,\mathit{RS}} \times (\mathit{TL}_{W} - \mathit{TL}_{\mathit{RS}})$$

$$\mathit{VMT}_{R,\mathit{BW}} = \mathit{VT}_{R,\mathit{BW}} \times \mathit{TL}_{W}$$

The vehicle trip reduction multiplied by the change in average trip length after the mode switch

Variables	(Unit)	Definitions
$\mathit{AVO}_{\mathit{RS}}$	(person/vehicle)	Average vehicle occupancy of rideshare
$\mathit{EF}_{B}$	(grams/mile)	Speed-based running exhaust emission factor before implementation (NOX, VOC, PM, or CO)
$F_{\mathit{BW},\mathit{SOV}}$	(percent)	Percentage of new participants in the bike/pedestrian programs who previously drove SOVs
$F_{\mathit{RS},\mathit{SOV}}$	(percent)	Percentage of new participants in the rideshare programs who previously drove SOVs
$F_{T,\mathit{SOV}}$	(percent)	Percentage of new participants using transit facilities who previously drove SOVs
$N_{\mathit{BW}}$		Number of participants in bicycle/pedestrian programs
$N_{\mathit{RS}}$		Number of participants in rideshare
$N_{T}$		Number of participants using transit facilities
$\mathit{TEF}_{\mathit{AUTO}}$	(grams/trip)	Auto trip-end emission factor (NOX, VOC, PM, or CO)
$\mathit{TL}_{\mathit{RS}}$	(mile)	Average auto trip length to rideshare facility
$\mathit{TL}_{T}$	(mile)	Average auto trip length to transit facility
$\mathit{TL}_{W}$	(mile)	Average auto trip length to work
$\mathit{VMT}_{R}$		Reduction in daily auto vehicle miles traveled
$\mathit{VMT}_{R,\mathit{BW}}$		Reduction in daily auto vehicle miles traveled by bike/pedestrian mode
$\mathit{VMT}_{R,\mathit{RS}}$		Reduction in daily auto vehicle miles traveled by rideshare mode
$\mathit{VMT}_{R,T}$		Reduction in daily auto vehicle miles traveled by transit mode
$\mathit{VT}_{R}$	(trip)	Reduction in number of daily vehicle trips
$\mathit{VT}_{R,\mathit{BW}}$	(trip)	Reduction in number of daily vehicle trips by bike/pedestrian mode
$\mathit{VT}_{R,\mathit{RS}}$	(trip)	Reduction in number of daily vehicle trips by rideshare mode
$\mathit{VT}_{R,T}$	(trip)	Reduction in number of daily vehicle trips by transit mode

Source: CalTrans/CARB (adapted by Texas A&M Transportation Institute)