A Desire Named Streetcar

A Desire Named Streetcar

16 Pages · 2005 · 1.23 MB · English

Routing inflation-adjusted subsidies to transit—buses and trains—have more than doubled since 1990, yet total ridership has increased by less than 10

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Routing inf lation-adjusted subsidies to transit—buses and trains—have more than doubled since 1990, yet total ridership has increased by less than 10 Prior to 1964, when Congress began subsidiz- ing 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 ser- vices such as light-rail trains to suburban areas despite the chronically low number of riders on those routes. Federal subsidies to transit advocacy 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. A Desire Named Streetcar How Federal Subsidies Encourage Wasteful Local Transit Systems by Randal O’Toole ________________________________________________________________________\ _____________________________ Randal O’Toole is director of the Thoreau Institute and an adjunct scholar at the Cato Institute. Executive Summary No. 559 January 5, 2006 groups and misguided environmental and labor exam ple of ho w special interests prevail o ver the needs and interests of v oters and t axpa yers. T otal creased by 42 percent. The nation’s mass transit system is a classic percent. By comparison, urban driving has in- Introduction The nation’s transit system is a classic example of how special interests prevail over the needs and interests of voters and taxpay- ers. Total inf lation-adjusted subsidies to transit—local buses and trains—have more than doubled since 1990, yet transit ridership has increased by less than 10 percent. The result is that the average cost to taxpayers for every transit trip has increased by 95 percent, from $1.68 to $3.28 in 2003 dollars. Prior to 1964, when Congress began sub- sidizing transit, the industry was mostly pri- vate, and, though it was losing riders, it oper- ated at an overall profit. Since then, the industry

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