We Know How to Fund Transit. Next Week’s Budget Meetings Would Be a Good Time to Start.

Streets for People | Friends of Car-Free Key West & Duval Street/Historic Downtown | Chris Hamilton |September 3, 2026 | Substack | Short-version crossposted at The Keys Citizen

126 units of workforce housing at the Lofts of Bahama Village opened late last fall. Built downtown with the promise of a walk, bike, transit-friendly environment easing the need to own a car and drive everywhere. The Duval Loop that served these residents was eliminated in last summer’s budget, before residents even moved in, and ran its last bus on December 31.

280 units of workforce housing at Wreckers Cay and lots of other workers on Stock Island have been served over the last few years by Key West Rides on-demand and the Workforce Express. Those services are slated to disappear in the new fiscal year. Yep. More budget problems. Again.

This wasn’t supposed to happen again this year. Last summer when City staff presented transit cuts, then-Commissioner Sam Kaufman asked the City Manager why no sustainable local funding sources had been prioritized. The Manager pointed to immediate steps — advertising, dedicated parking fees, a share of citation fees — but said longer-term ideas like TDC funding, a disembarkation fee increase, and business community participation “do not have a short-term implementation.” Recommendations, he said, could come “a couple of months into the new fiscal year.”

We don’t know what staff have attempted, or if some of these are being worked on  behind the scenes, but July’s proposed budget had no new funding sources. The County’s proposed budget contains nothing new for transit either. As a result, the City’s proposing to cut back transit service, including a wholesale rejiggering of local buses and no Duval Loop, again. City and County leaders can’t keep building a transit system on Federal and State grants alone. We need new, dedicated local funding.

About 5,000 people live on Stock Island, and half our downtown workers live beyond the bridge. When the bus disappears, those trips become cars. More congestion on U.S. 1. More people fighting for the same parking spaces downtown. Less reliable employees for businesses. Research tells us tourists who don’t have options drive. And anyone without a car is cut off from full participation in this community. None of it gets better without better transit. Here’s how Paul Menta, leader of Shop Mom & Pop Key West and owner of the Key West First Legal Rum Distillery puts it to me this week:

“We’ve always said Key West has a housing problem. Really, we’re starting to have an employee problem. Workers are going to have to come from outside Key West, and if that’s not dealt with, most businesses won’t have the staff to operate at 100% — which affects the whole island.”

The County and City have budget meetings coming up September 9 and 10. It’s a last chance to address the immediate cuts and to get ahead of a potential FY2028 budget squeeze. Will our leaders rise to the occasion? Let’s review how we got here, again, and discuss their options. 

The City’s Promise – The Fix We Were Told About Twice

During last year’s budget cuts to the transit system, which ended with the City terminating the system’s most successful route, the Duval Loop, the Manager told the commissioners he’d have some recommendations in a few months. That was the first time.

New recommendations didn’t materialize. 

In March, Assistant City Manager Rod Delostrinos in a memo (pg 2) forwarding an updated 10-year transit plan to the commissioners was candid about the challenge. The Florida Department of Transportation has “no current or projected 100% FDOT grant opportunities for transit operational funding.” He went on to say that service development grants require 50% local match, and even if awarded, grants aren’t guaranteed to continue – exactly the problem that killed the Loop. He said staff is exploring cruise ship disembarkation fees, additional parking fees, and potential partnership with the Tourist Development Council and noted “the business community could also provide a path to revenue.” 

That was the second time.

None of these sources were included in the FY27 proposed budget presented in July leading staff to recommend discontinuing the local Key West Rides on demand and Workforce Express services in favor of a new fixed-route Island Hopper with hourly service 6 am to 6 pm around the island of Key West and the City side of Stock Island. 

The County’s Promise

Last summer during the budget process the County eliminated the Conch Connect on-demand transit serving Stock Island and Key West and dismantled its transit department. In March, County Administrator Christine Hurley said she planned to address improvements to the Lower Keys Shuttle and a separate workforce bus service for Stock Island residents to Key West for consideration by the Board of County Commissioners (BOCC).

At the initial July 14 County Budget Hearing the Administrator presented a modest $128,700 (weekdays) or $180,180 (7-days) proposal (pg. 20) to add seven trips a day (4 in/3 out) to the Lower Keys Shuttle. The catch? It would only be enacted if the commission raised the millage rate. 

It did not. Nor were the commissioners presented with any Stock Island service options at the budget meeting. 

Seven more trips a day cost $180,180. The County’s total budget is $695.8 million. That’s 0.026 percent — twenty-six thousandths of one percent. Add the $500,000 for Hopper service for Stock Island’s south side and the whole ask is $680,180, still under a tenth of one percent.

Framed as a millage increase, though, a rounding error becomes a tax vote. And a tax vote, even on a rounding error, was dead on arrival. To be fair, raising the millage for transit would have been admirable. But absorbed into the base, this is a routine allocation like a hundred others nobody debates.

We asked whether commissioners knew at the time, that the City was proposing to eliminate Key West Rides and the Workforce Express and that the replacement service, the Island Hopper, wouldn’t serve Stock Island’s south side. Ms. Hurley said: “You are correct; it wasn’t known.”

Says Paul Menta: “The workers of Key West are depending on this commission to help them get to work. And remember — even though they work in Key West, where they may not have voting rights, they sure do have voting rights in the county. That should be thought about, because assistance from the county is needed.”

What’s Been Lost By Not Following Through on the Promises

Not following through has had consequences:

The Duval Loop carried 144,385 passengers in FY25, its last full year – 44% of the entire system, after four straight years of growth. Downtown lost its circulator.

System-wide, ridership fell from 620,071 in FY19 to 330,764 in FY25. Through July, this year is running 42% below the same period last year. A full-year projection lands near 200,000.

Strip out the Loop and the Lower Keys Shuttle and look only at local Key West routes. FY19 saw 186,937 riders on the old Orange, Red, Blue and Green routes. Those became the North and South lines. Those became Key West Rides and the Workforce Express, which together carried 88,857 last year. Less than half.

On the County side, Conch Connect carried more than 65,000 riders before it was cut with three months left in the fiscal year. The County also eliminated its Transit Director position, and the plans that went with it.

The Continuing Problem – Overreliance on State and Federal Grants

Here’s where the Transit Fund’s $6,912,454 comes from:

Source	FY27	Share
FDOT and federal grants	$3,578,814	51.8%
Park & Ride garage, special events, Conch Harbor parking	$1,655,953	24.0%
Monroe County ($326,125), Marathon ($186,357) — LKS	$512,482	7.4%
Bahama Village and Caroline Street TIF	$500,000	7.2%
Fares	$370,000	5.4%
Parking fines	$200,000	2.9%
Advertising	$117,500	1.7%
Other	$118,900	1.7%
Less: Park & Ride revenue transferred to the Transportation Alternative Fund	($141,195)	(2.0%)
Total	$6,912,454	100%
General Fund appropriation	$0	0%

Footnote:

The Park & Ride garage supplies $1,400,953 of the parking total. Because the garage was built with federal transit dollars, that revenue is legally obligated back to transit — it isn’t a local funding decision. The $141,195 transfer goes to the Transportation Alternative Fund, which pays for bus shelters, bike racks on the buses and other walking and biking improvements. Source: City of Key West FY2026–2027 Proposed Budget, Transit Fund (Fund 411), City Manager Review column.

Year after year Key West Transit relies on Federal and FDOT transit grants. The largest “local” source isn’t a local decision. The Park & Ride garage generates $1,400,953, and because it was built with federal transit dollars that revenue is legally obligated back to transit. Setting it aside, the City directs about $700,000 in discretionary local revenue to transit — $500,000 in TIF and $200,000 in parking fines. The City Manager’s commitment of the $200,000 in fine revenue is new this year and worth acknowledging. It’s also a discretionary annual decision, not a formula.

And so, over the last decade we’ve seen commensurate radical changes to the system, ignored long-term plans and outright cuts in response to the whims of Washington D.C. and Tallahassee. 

The Fix – New, Dedicated, Local Funding

The City’s own recently updated 10-Year Transit Development Plan projects a $48.7 million shortfall over ten years, $2.4 million this year. So, nibbling around the edges or hopeful thinking on squeezing out any more money from existing federal and state grants is just foolish. And as we wrote last September just after the City cut $1.3M from its transit budget – city federal and state grant cuts – and eliminated the Duval Loop, we sensed a shift. We said: 

“For the first time, city staff and commissioners seemed to begin talking seriously about long-term funding solutions – cruise ship disembarkation fees, Tourist Development Tax allocations, expanded parking revenue.” 

Let’s look at a few of these:

Dedicated Increment on New Parking Fees

The City has already done this once. The Transportation Alternative Fund is funded by a dedicated share of a 2017 parking rate increase — roughly 33 cents of a one-dollar increase. That formula now pulls $769,909 a year across three separate parking operations. 

So, this isn’t a new instrument, but subsequent parking increases over the years didn’t have similar formulas, instead all the increase went other places. Revisit this model. Raise on-street meter and lot rates and dedicate the entire increase — and every future increase — to transit, permanently, by formula. Do this even for a small amount so it is set for the future. 

Dedicating parking revenue to transportation isn’t novel. It’s a recognized practice in places across the country. Boulder uses meter revenue to buy bus passes for downtown workers, so drivers who park on the street help pay for the people who ride. Austin’s ordinance requires meter money to fund walking, biking and transit. St. Louis lets the city keep a base amount and dedicates the growth to the district. Key West already did a version of this in 2017. We just stopped.

Nearly every parking meter in Key West is downtown, with the rest at Smathers Beach. Money collected from people parking downtown, spent on moving people around downtown, is exactly the model — and it’s already close to how our meters are laid out. Downtown’s curb should pay for downtown’s buses — the ones that bring visitors around, and the ones that bring workers in.

Dedicated Increment on Cruise Ship Disembarkation Fees

Pier B and Mallory generate $3.25 million in disembarkation fees, all of it to the General Fund. An increment on the per-passenger fee is new money, paid by visitors, requires no referendum, and the City controls it outright. Last September, then Commissioner Sam Kaufman asked for a legal memo on disembarkation fees, noting that Key West charges far less than other Florida ports. And staff named this in March.

The rationale for funding a free and frequent Duval Loop for tourists makes sense on its face. But so does supporting any kind of transit that supports downtown workers and their employers.  

Dedicated Tourist Development Taxes

In the upcoming fiscal year, the TDC budget is going from $86.1 million to $112.6 million — up $26.5 million, 30.8%, in one year. Not one penny is going to public transit. The County’s own FY27 budget principles say to shift tourism-serving operating costs from general revenue to Tourist Development Taxes. The TDC already pays the City $1,085,000 this year for beach cleaning and beach operations. This isn’t a new category. 

We’ve spent a lot of ink over the last year (here, here, here, here) making the case for some of these dollars going toward the “tourist-serving portion” of transit so we won’t belabor it today. Even the TDC President/CEO Kara Franker sent the City Commission a letter saying she wasn’t opposed “in principle” while calling for a study. 

The 2005 interlocal agreement that created the Lower Keys Shuttle commits the County to promote the service in its tourist development marketing — and its recitals say the TDC itself determined visitors wanted transit to Key West. The tourist case was made by the TDC, in writing, twenty-one years ago. 

We’ve similarly made the case that because the Lower Keys Shuttle is such a simple route along our one road – the Overseas Highway – from Marathon to downtown Key West that it’s impossible not to serve virtually every hotel and destination along the way. So, by definition it is tourist serving and tourist development tax funds should be eligible for use for capital AND operating.

A Dedicated Funding District for Unincorporated Stock Island

Only counties can create these districts, and only in unincorporated areas — which is what south Stock Island is. Monroe County could draw a district there and dedicate the revenue to transit. No referendum required, and nobody outside the boundary pays. Whether that’s structured as a taxing unit or a benefit unit is a question for the County Attorney, and one a funding study should answer. What matters is the principle, which the County has already written into its own budget: services that benefit one part of the community should be funded by that part of the community. It’s the County’s own stated preferred tool for neighborhood-specific services — and the City’s own Transit Development Plan already names a “Multimodal MSTU.”

Fund a Real Funding Study

THIS is the big one. Not another service plan (we have good ones) — a funding-alternatives analysis with legal opinions attached, covering the parking dedication, the cruise increment, TDT eligibility (capital and operating), a Stock Island funding district, a municipal resort tax and anything else they can think of. New, local, dedicated. The study should also benchmark what comparable places actually do — other Florida systems with dedicated local funding, and tourist-economy towns our size outside Florida. 

The Center for Urban Transportation Research at USF does this work for Florida agencies. It’s cheap, it’s credible, and it converts “we should look at tourist dollars” into an ordinance somebody can vote on. I don’t have these answers and neither does anyone else in this conversation. That’s the point of the study.

The City’s own Transit Development Plan already names the answer — a line called New Local Contribution & Private Partnership (Potential KWIC revenue, tax dollars w/ the establishment of Multimodal MSTU, TD Bed taxes, etc.).

And no, we shouldn’t wait for the study to get some of the other options going now.  

What We Can Build Back

As funding becomes available let’s build the system back in this order:

1. The Island Hopper is planned and funded in the FY27 budget. It’s the floor.
2. Restore service to Stock Island’s south side. Almost 5,000 people live here. Cost $500,000.
3. More frequent Lower Keys Shuttle service. The current 90 to120 minute waits are too long. Cost $180,180 for 7 additional trips (4 in/3 out) 7 days a week.
4. 6:00 p.m. to midnight evening service (what’s missing from the new Hopper). Cost unknown.
5. Restore a free and frequent Duval Loop. Perhaps reduced frequency in the off-season. Cost $950K to $1.4M.
6. Keep some sort of on-demand, with small vehicles, to fill the gaps the Island Hopper misses. Cost unknown.
7. Reduce hourly frequencies on the Hopper to 45 or better yet 30 minutes. Cost unknown.

A senior who rides the Workforce Express told us most seniors she knows find the on-demand app too cumbersome. If 6 to midnight or additional service is done via the Key West Rides on-demand, let’s fix the app.

And one thing that isn’t service at all: dedicated marketing and planning support. Somebody whose job it is to build partnerships, do marketing and conduct research and planning. Right now, that work is a collateral duty layered on top of other jobs. Every item above needs a person to go get the money — and the funding study will produce recommendations somebody has to actually work as the system changes and expands.

That’s just a start. Key West Transit has some lofty ideas in its 10-Year Plan, and we’d all be better off if they were implemented.

Fixing This Could Take Time, So, We Need to Start Now

All of these funding ideas are going to take a little time to figure out and implement. So, the sooner we get going the better. And if it passes in November, Amendment 3, the Homestead Exemption Cap, could squeeze future budgets further, so finding dedicated funding outside of General Funds is crucial.

The County holds its final budget hearings September 9 and 14. The City September 10 and 23.

The County can fund both the south side of Stock Island and better Lower Keys Shuttle frequency for $680,180 — about a tenth of one percent of its budget. 

The City should find the money to run buses from 6 p.m. to midnight, direct staff to draft the parking dedication ordinance, and produce the disembarkation fee memo requested a year ago.

Both should fund the study.

Doing so would be a down payment on following through on these longer term funding fixes and allow everyone to breathe a little easier. At this time last September we likened the shift of City staff and commissioners finally awakening to and recognizing the problem as to turning a cruise ship around. Slow and deliberate. With a year under our belt, we need our leaders to dock that ship and bring it home.

# # #

Chris Hamilton is the founder of Friends of Car-Free Key West & Duval Street/Historic Downtown, a local advocacy group championing sustainable mobility and vibrant public spaces. Subscribe to the blog and follow on Facebook, Twitter, and Substack for updates. All stories are cross posted at KONK Life News. Originally from Washington, D.C., Chris spent over two decades leading nationally acclaimed initiatives in transit, biking, walking, and smart growth for Arlington County, VA’s DOT. Since moving to Key West in 2015, he has embraced a car-free lifestyle downtown, dedicating his time to non-profits and community projects. Explore all Streets for People column.