Financial, Economic & Community Value of Public Transit in SD

Title: Demonstrating the Financial, Economic, and Community Value of Public Transit in South Dakota

Problem Description: South Dakota's public transit system plays a critical but under‑recognized role in sustaining economic activity, workforce participation, educational access, healthcare access, and community stability, particularly in rural communities and for older adults, individuals with disabilities, and people lacking personal support networks. Despite its wide‑ranging benefits, transit is often viewed too narrowly as a social service rather than as an economic driver, a workforce enabler, and a comprehensive cost‑avoidance strategy for healthcare, long‑term care, and social services.

Transit services enable critical daily functions that support families, employers, and community institutions. Youth rely on transit for travel to daycares, after‑school programs, and enrichment activities, services that allow parents to remain at work and reduce workforce disruption. Transit also provides dependable access to job sites in both urban and rural areas and serves residents of nursing homes, assisted living facilities, and group‑living settings through on‑demand and fixed‑route operations. For many individuals who lack family, friends, or neighbors who can provide transportation, public transit is their only means of reaching employment, education, medical care, and essential goods. Reliable transportation also supports mental‑health stability by reducing isolation, improving independence, and lowering stress associated with uncertainty or missed appointments. It also benefits choice riders who prefer not to drive or own a vehicle, providing an affordable, environmentally friendly, and convenient mobility option.

From a workforce perspective, the consequences of underinvestment in transit extend even further. Reliable transportation is foundational to how employers recruit, retain, and support workers, and when transit systems fall short, the effects ripple through the labor market. Hiring pipelines become harder to sustain, absenteeism and turnover increase, and employers struggle to maintain stable staffing levels. Workers themselves face reduced participation and productivity when transportation barriers limit their ability to enter the labor force, maintain consistent hours, or manage responsibilities such as childcare, medical appointments, or non‑traditional schedules. These challenges also raise employer costs by shrinking the available labor pool, increasing recruitment and onboarding expenses, restricting business growth, and diminishing the competitiveness of communities seeking to attract or retain employers. Together, these factors contribute to chronic underinvestment and hinder the development of a unified, data‑driven understanding of the full financial, economic, and community value that transit provides across the state.

The absence of reliable transportation options in many rural and urban communities forces residents, especially seniors, to relocate to regional centers, accelerating population decline and eroding local social capital. This relocation disrupts family caregiving, reduces local spending, and destabilizes healthcare provider networks. At the same time, inadequate transit access contributes to preventable emergency department visits, hospital remissions, and premature institutional placement, all of which increase Medicaid expenditures. Even modest delays in institutionalization, measured in months, can yield significant cost savings, yet these benefits remain undocumented in South Dakota.

Across the healthcare sector, transit directly influences outcomes and costs, not only for Medicaid, but also for behavioral health, dental care, preventive services, routine medical appointments, and chronic disease management. In rural areas, long‑distance medical trips frequently generate significant unpaid deadhead mileage, which creates both operational burdens and community impacts that are not consistently measured or understood. These dynamics further strain providers already coping with fragmented funding structures, limited local match, and rising operational, staffing, and vehicle‑replacement costs. As a result, providers face widening gaps between existing funding levels and the resources necessary to maintain current service levels or meet growing demand.

Transit services also support community vitality and public safety. Reliable transportation helps sustain access to all levels and types of education, enabling students to participate fully in school, training, and workforce‑development pathways. Transit contributes to reductions in impaired driving by providing safe mobility options. In addition, transit enables older adults and individuals with disabilities to age in place, delaying costly institutional care and reducing avoidable emergency department visits or inpatient utilization, and continue to contribute to the local tax base, yet these benefits remain undocumented in South Dakota.

Currently, South Dakota lacks a modern, statewide evidence base to quantify unmet transit demand, economic impacts, healthcare and social‑service cost avoidance, and long‑term community benefits. Existing evaluations emphasize operational statistics rather than broader impacts such as economic activity, job creation, healthcare savings, or quality‑of‑life outcomes. Without this information, policymakers, budget analysts, and community leaders cannot accurately assess transit's return on investment or evaluate funding decisions using the same criteria applied to other infrastructure sectors.

Other states, such as Missouri, have demonstrated the value of comprehensive statewide transit studies that integrate unmet needs analysis, economic‑impact modeling, and fiscal cost‑avoidance evaluation. South Dakota requires a similar evidence‑based approach to support strategic planning, inform legislative decisions, strengthen federal grant applications, and ensure the long‑term sustainability of transit services statewide. Without this research, the state risks continued funding inefficiencies, missed investment opportunities, and escalating healthcare and social costs.

Importance: Quantifying transit's economic, healthcare, and community benefits will allow policymakers to position transit as an economic development tool and a cost-avoidance strategy for Medicaid and long-term care budgets. This evidence is essential for informed decision-making and sustainable funding.

Research Objectives:

1. Establish a comprehensive statewide transit needs assessment.

2. Quantify the economic impact (hard and soft dollars) and the return on investment (direct and indirect) of public transit on jobs, business activity, tourism, education, healthcare, safety, and tax revenues.

3. Estimate healthcare and Medicaid cost avoidance and aging-in-place benefits attributable to transit.

Proposal Deadline: Proposals are due to the SDDOT by 5:00 pm CDT on Wednesday, June 10, 2026. This deadline is firm. Extensions will not be granted.

Proposals must be submitted as an e-mail attachment in Portable Document Format (PDF) not exceeding 14MB. The email must be addressed to andy.vandel@state.sd.us and danny.doorn@state.sd.us. Proposers should send the e-mail using "Delivery Receipt" and "Read Receipt" options to verify successful delivery.

Proposal Guidelines: Proposals must fulfill the requirements listed in the document entitled RESEARCH PROPOSAL PREPARATION, SUBMISSION, AND EVALUATION and dated April 27, 2026.

Proposal Evaluation: Proposals will be evaluated by a technical panel knowledgeable in the problem area. Selection will be made in consideration of criteria listed in RESEARCH PROPOSAL PREPARATION, SUBMISSION, AND EVALUATION.

Project Management: Andy Vandel is responsible for the management of this project and can be reached at andy.vandel@state.sd.us to answer inquiries.