Thursday, January 19, 2006

How Federal Subsidies Encourage Wasteful Local Transit Systems

Randall O'Toole has a policy analysis of public transit. Here is the executive summary:
"The nation's mass transit system is a classic example of how special interests prevail over the needs and interests of voters and taxpayers. Total inflation-adjusted subsidies to transit—buses and trains—have more than doubled since 1990, yet total ridership has increased by less than 10 percent. Train ridership has dropped dramatically while automobile use has skyrocketed.

Prior to 1964, when Congress began subsidizing transit, the industry was mostly private. Since then, the industry has been almost entirely taken over by state and local governments. Today more than three of every four dollars spent on transit come from taxpayers, not transit riders.

The effectiveness of local transit systems is undermined by federal subsidies, which encourage the construction of highly visible and expensive services such as light-rail trains to suburban areas despite the chronically low number of riders on those routes. Federal subsidies to transit advocacy groups and misguided environmental and labor regulations also encourage a large investment of taxpayer money in wasteful transit systems.

The ideal solution would be to devolve transit and other transportation funding entirely to state and local governments. Short of that, Congress should reform the federal transportation funding system to minimize the adverse incentives it creates."
Can it possibly make any economic sense that "more than three of every four dollars spent on transit come from taxpayers, not transit riders"?


Meg Chavez said...

Does that mean all four of the four dollars is from the government or is it more like 3.50?

Katie Bodden said...

Better yet why is there a subsidie for it. How does that benefit 3rd parties? If anything it makes them worse off. The buses are huge pollutors, and they PAY to keep them doing so. I say my money should stop going to pay for that. I'd see any benefit for it.