The financial environment in which the transit industry is operating is rapidly changing. Transit boards, city councils, and general managers are facing difficult decisions regarding fare increases, service curtailment, and how to use available funds provided by Federal, state, and local government sources to meet pressing public transportation needs in their communities. There is an increasing realization that perhaps the managerial and financial planning tools used by the transit industry are not up to the difficult task of coordinating and deciding on fares, services and capital budgets, and that perhaps business planning tools and processes need to be applied in American transit settings. One of the problems with transit planning and management is that fare and service level decisions are rarely planned and considered together despite the fact that fares and service levels are intrinsically related. Indeed, current transit planning and managerial practices in place emphasize separate analysis of appropriate fares, service levels, and capital budgets with the concomitant result that there is no overall balance between these three important elements because all three are planned and their feasibility determined using different yardsticks and evaluation criteria.