Transit Funding in Our Region

Our recent online survey had more than 350 responses. Of those responses, there was an overwhelming desire for more transit in our region:

  • More than 42 percent want to be able to take transit around the region.
  • Lack of public transit was ranked second among respondents for the greatest transportation challenge our region is facing.
  • 44 percent selected expansion of transit to more areas to receive the most funding.

It’s clear why those in our region want more transit options. Benefits are wide-ranging and many are economic:

  • Every $1 invested in public transportation generates approximately $4 in economic returns.
  • Every $1 billion invested in public transportation supports and creates more than 50,000 jobs.
  • Every $10 million in capital investment in public transportation yields $30 million in increased business sales.
  • Home values performed 42 percent better on average if they were located near public transportation with high-frequency service.

More information can be found at

However, one major obstacle to providing more transit is that most of the funding managed by the TPO cannot be used to expand transit service. Public transit costs are separated into two categories: capital and operating. Capital costs include long-term costs such as vehicles and facilities. Operating funding pays employee salaries and benefits (“the driver in the seat” – as much as 75% of the total budget), fuel, insurance, maintenance and utilities.

Transit funding comes from a variety of sources, including passenger fares, local tax revenue, as well as state and federal grants. Most state and federal grants (such as those managed by the TPO) require local entities to provide matching funds and are restricted to capital expenditures – which means they can’t be used to increase or expand transit service. In order to expand existing transit service or start new transit service, a significant amount of funding would need to come from the city or county that wants the service.

To give you an idea of where transit funding comes from, here are the 2016 sources for KAT’s funding.



%of total revenue

City of Knoxville



State of Tennessee









Other funding



Total Revenue



Operating Expenses*



*under budget due to low fuel prices


Workforce Housing Report Available for Download

The Workforce Housing report examines challenges associated with providing adequate housing for Knox County's working families, including transportation costs.

In Knox County many working households are spending more money on housing and transportation than they can afford. The housing market is not supplying enough affordable units, so households have fewer choices and are often left spending more than 45% of their income on housing and transportation expenses.

Learn more here.