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Funding a Voucher Program

Because voucher programs are so flexible, they can be used to provide rides using many types of transportation providers, to many different types of destinations. The provider type and destination are limited only by the parameters set by the funding source. Listed below are suggestions for federal, state, and local funding programs that may have relevance for a voucher program. Communities can also consider communicating to local and state legislative representatives the positive impact a voucher program will have on their constituents and inquiring about the possibility of a discretionary grant to support the voucher program.


Federal Funding Programs

Questions about federal funding programs? Contact joblinks@ctaa.org.

Several federal funding programs, administered both within and outside of the DOT, can be used to fund voucher programs. While using vouchers to subsidize trips on fixed route bus and rail is certainly an available option, it should be noted that funds from two DOT Federal Transit Administration programs—Job Access and Reverse Commute or JARC (Section 5316) and New Freedom (Section 5317)—cannot be used to purchase vouchers that can then be exchanged for rides on existing fixed-route services or ADA complementary paratransit service. However, vouchers paid for out of these two programs can be used to purchase rides that occur outside of the service area or hours of fixed-route and complementary services (e.g., for a ride home from a second-shift job that finishes after fixed route services have stopped for the day).

Another note: The Federal Transit Administration programs described below require that the proposed voucher service be identified as a part of the region’s public transit–human service transportation coordination plan that outlines gaps in transportation. This plan is usually developed and maintained by a community’s transportation planning board, or, in the case of rural areas, by the state department responsible for public transit oversight.


Look at the funding discussion in the SVRT guide: http://rtc.ruralinstitute.umt.edu/Trn/TrnManual.htm#Section2

                    The Potential Community Partners chart in the APRIL Toolkit notes those partners that  may also serve as resources for funding. (Link to be added).

  •  Section 5316: Job Access Reverse Commute (JARC) Program (49 U.S. Code §5316), Federal Transit Administration
The creation of a new voucher program and the enhancement of an existing voucher program are eligible activities under the JARC program. Vouchers using JARC dollars must be targeted to support trips made by individuals with limited income to to employment or employment-related activities, such as education and training programs. JARC funds can be used to access rides through volunteer driver programs, taxis, or trips provided by a human service agency. Voucher programs are considered an operating cost and as a result FTA requires a 50 percent match of its funds. Local, state and federal funds that are other than U.S. Department of Transportation funds (e.g., TANF, Workforce Investment Act, Social Services Block Grant, etc.) are eligible for the match.

Example: Maryland Voucher Program Provides Access to Work
Montgomery County, Maryland recently implemented a demonstration taxi voucher program,supported with JARC funds, to connect low-income commuters in the Tobytown community to public transit. Tobytown is an isolated, low-income community located southeast of Poolesville.  Because the area has limited access to public transit, many residents face transportation challenges in accessing employment. Link A Ride is based on the Call and Ride program operated by the county.  Through Link A Ride, Tobytown residents are able to purchase taxi service with coupons for a portion of the normal cost.  The transportation trips may be for any purpose. Once an applicant is approved, s/he receives an identification card and a coupon order form.  Coupons may be purchased at a reduced rate, based on income.  Coupons are issued through the mail and must be accompanied by a check or money order, payable to the county. Participants initially have an assigned, volunteer driver provide the taxi services to and from their destination.  Riders are required to present their ID and pay the fare with coupons, which may also be used for tipping.  If the assigned driver is not available, contact information for other drivers or participating cab companies is provided.  Many of the participating cab companies are those previously involved iwth Call and Ride.

More information:
To learn more about JARC, visit the Federal Transit Administration (FTA) JARC webpage:http://www.fta.dot.gov/funding/grants/grants_financing_3550.html, or the Joblinks Initiative’s JARC page at http://web1.ctaa.org/webmodules/webarticles/anmviewer.asp?a=665&z=5.

  • Section 5317: New Freedom Program (49 U.S. Code §5317), Federal Transit Administration

New Freedom funds can be used to support the administration and expenses related to new voucher programs for transportation services offered by human service providers. Only new voucher programs or expansion of existing programs are eligible under the New Freedom Program. The New Freedom Program can provide vouchers to individuals with disabilities to access rides through volunteer driver programs, taxis, or trips provided by a human service agency. As with the JARC program, voucher programs are treated as an operating cost with a 50 percent match requirement. Non-DOT federal funds (e.g., TANF, Workforce Investment Act, Social Services Block Grant) are eligible as match sources.

More information: To learn more about New Freedom for transportation, visit the FTA’s New Freedom webpage at http://www.fta.dot.gov/funding/grants/grants_financing_3549.html, the New Freedom webpage on the Community Transportation Association Passengers with Disabilities site at http://web1.ctaa.org/webmodules/webarticles/anmviewer.asp?a=143&z=39.

  •  Section 5310: Transportation for Elderly Persons and Persons with Disabilities Program (49 U.S. Code §5310), Federal Transit Administration

This federal program provides formula funding to states for the purpose of addressing the transportation of the elderly and persons with disabilities. The dominant use of Section 5310 is for the acquisition of vehicles and other capital assets; however, the acquisition of transportation services from other providers is also an eligible expense. The match is 80/20.

More information: To learn more about Section 5310 funding, visit the FTA’s webpage at http://www.fta.dot.gov/funding/grants/grants_financing_3556.html.


  • Section 5311: Rural and Small Urban Areas

This program provides formula funding to states for the purpose of supporting public transportation in areas of less than 50,000 populations. Funds may be used for capital, operating, and administrative assistance to state agencies, local public bodies, Indian tribes, and nonprofit organizations, and operators of public transportation services. One of the program’s goals is to enhance the access of people in nonurbanized areas to health care, shopping, education, employment, pubic services, and recreation. In addition, the program encourages the participation of private transportation providers in nonurbanized transportation to the maximum extent feasible. Many rural areas have established voucher-based Section 5311 operations, most typically involving the use of taxis.


  • Temporary Assistance for Needy Families, Department of Health and Human Services

The Temporary Assistance for Needy Families (TANF) program provides assistance and work opportunities to needy families by granting states the federal funds and wide flexibility to develop and implement their own welfare programs. TANF funds may be used for a range of transportation services as long as the expenditure reasonably accomplishes a purpose of the TANF program; the purchase of vouchers for use on a public or private transit system is one of those uses. State Maintenance of Effort funds under the TANF program, or State funds separate from the TANF program that qualify under the MOE requirement, may also be used to help TANF-eligible individuals in similar ways.

More information: To learn more about using TANF funds for transportation purposes, look at the joint DOT/DHS guidance issued in 2000 on the use of TANF and other funds for transportation at http://www.fta.dot.gov/funding/grants/grants_financing_3715.html.


  • Workforce Investment Act, Department of Labor

The Workforce Investment Act (WIA) provides funding to state and local workforce development agencies for a variety of youth, adult and dislocated worker employment and training services. DOL-funded One Stop Career Centers may use these funds to help program participants access transportation, including that reimbursed by vouchers, to attend training programs, work, or child care. One Stop staff are also encouraged to provide information on and referral to local support services, including child care and transportation, and other services necessary to enable an individual to participate in activities authorized under WIA Title I.

More information: Learn more about WIA at http://www.doleta.gov/usworkforce/onestop/.


  • Food Stamp Employment & Training Program, Department of Agriculture

Under the USDA’s Employment & Training Program, the state agency must provide payments to program participants for expenses that are reasonable and necessary and directly related to participation in the program, including transportation costs.

More information: Learn more about the Employment & Training Program at http://www.fns.usda.gov/fsp/rules/Memo/Support/employment-training.htm.


  • Other Federal Programs

In 2003, the General Accounting Office (GAO) reported on the 63 federal programs that allow their funds to be used to support transportation costs, including vouchers, for individuals. A good place to start looking for funding for transportation for customers is in a table the GAO included that lists all these funding agencies, the typical types of transportation uses of the funds, and other valuable information. For example, Harris County, Texas has used Congestion Mitigation and Air Quality Improvement Program (CMAQ) funds, which are designed to encourage transportation alternatives that improve air quality, to support its voucher program.  The City of Olathe, Kansas has used HOME Investment Partnership Program funds (provided by the U.S. Department of Housing and Urban Development), and Community Development Block Grant (CDBG) funds to support its program. 

Also, to foster coordination among the many federal programs funding transportation, the U.S. Department of Transportation allows dollars from other non-DOT federal programs to be used as local matches for DOT grants. For example, these non-DOT matching contributions could come from a state’s TANF or WIA funding, from local Council on Aging funds, from funding dedicated to assist people with disabilities, and so on. The key, again, is collaboration among agencies and creative thinking!

More information: For a list of federal programs that might support transportation services, including vouchers, please see Federal Investment Guide at http://web1.ctaa.org/webmodules/webarticles/anmviewer.asp?a=21&z=40. View the GAO Report (GAO-03-697), including the table of these funding agencies, at www.gao.gov/new.items/d03697.pdf.


  • United We Ride

United We Ride (www.unitedweride.gov) is the public face of the Federal Interagency Coordinating Council on Access and Mobility (CCAM), which seeks to streamline human service transportation coordination. The council's goal is to provide more rides for fewer dollars to all Americans, and is made up of representatives from the following federal agencies:

  • Department of Transportation
  • Department of Health and Human Services
  • Department of Labor
  • Department of Education
  • Department of Interior
  • Department of Veteran Affairs
  • Department of Justice
  • Department of Housing and Urban Development
  • Department of Agriculture
  • Social Security Administration
  • National Council on Disability

Although not a source of funding, the United We Ride program can provide technical assistance and promote the dissemination of models that enhance a community’s mobility options, including voucher programs. The link to the United We Ride website is http://www.unitedweride.gov/1_ENG_HTML.htm.


State and Local Funding Sources

Consider state and local human service agencies as a potential source to help pay for a voucher program for that would assist the agency’s consumers with their mobility needs. The state or local government may also be willing to use dollars from its general fund for this purpose. Voucher program revenue—the income generated by charging customers for vouchers—may be used to reduce the net project costs or to provide a local match. State and local funds could become

  • A direct funding source for a voucher program
  • The local match for one of the federal funding programs noted above
  • Used to support transportation for individuals who do not meet the low-income guidelines of federal programs

                     Example:  Prescott Arizona Uses State Funds to Restore Voucher Transit Program

 On January 1, 2010, the city of Prescott Arizona received funding from the Arizona Department of Transportation allowing it to reinstate a transit voucher program designed to serve area low-income, disabled and older individuals in need of a ride. The program had been discontinued when issues relating to disbursement of funds, which come from state lottery revenues, was questioned. The $60,000 in Local Transportation Assistance Funds will support the provision of vouchers for at least one year.  Area residents can obtain voucher from the North Arizona Council of Governments on a first-come first serve basis.

In addition to the $60,000, the city of Prescott will provide a $15,000 match.  The city of Prescott also received $50,000 from the Arizona Department of Transportation to provide job-related rides. That portion of the program has been operating since November, 2009.  Continuation of the voucher program will help qualifying persons in a tri-city area in need of rides to job searches, medical appointments and other quality of life trips in a community where full-scale public transit is limited. 



Private Funding Sources

In addition to public funding sources, several private organizations and foundations work with communities to fund needed transportation services. These may be nonprofit organizations, community action agencies, or faith-based organizations, to name a few. Another source for vouchers could be private employers who provide them to some or all of their workers. A voucher program could be the source of transportation for these programs. The partners can also provide important feedback through the planning process.

Example: American Council of the Blind of Nebraska (ACBN)

ACBN, a member-based organization, has developed a successful voucher program that serves people who are blind or visually impaired. In the mid-1980s, ACBN members identified a need to supplement the public transit services in the City of Lincoln to provide service after 6:00 p.m. on weekdays and on weekends. In response to this need, ACBN created the “Give-A-Lift” program that provided subsidized taxi transportation to members for evening and weekend travel. Eventually ACBN added a voucher component to its program. Eligible individuals purchase taxi coupons at a 50% subsidy of the coupon value. Where local taxicab services exist, ACBN negotiates with companies to get them to participate in the program. Participating companies that agree to accept program vouchers then submit completed vouchers to the local agency managing the program for payment. To allow local administering agencies to pay participating taxicab companies quickly, ACBN provides up-front funding to local managing agencies.

Funding for the program was received from the Abbott Foundation, Lions Club, and Nebraska Commission for the Blind and Visually-Impaired. ACBN also is working with the Lions Clubs to identify club members willing to serve as volunteer drivers, an important part of the voucher program.