Twelve Charts Proving Why the Federal Government Should Terminate Transit Subsidies

Current total transit subsidies total more than $50 billion a year, with annual subsidies averaging more than $150 per U.S. resident. And, yet, most Americans rarely, if ever, use public transit — and ridership is declining…

image

Transit Ridership Is Declining:

Since 2014, ridership has been steadily falling in almost every urban area despite a healthy economy.

image

Transit’s Recent Decline Is Nearly Catastrophic in Some Areas:

image

Transit ridership in 31 of the nation’s 50 largest urban areas has dropped 15 percent or more since the year of highest ridership in each region in the last decade. While transit ridership has declined in the past, as it did between 1990 and 1995, it recovered due to high gas prices. Today, moderate gas prices are fueled by America’s resurging oil industry, and when that resurgence is combined with deteriorating transit infrastructure and the growth of the ride-hailing industry, it appears that the most recent decline may be irreversible.

Transit Requires High Downtown Job Concentrations:

image

Many assume that transit ridership is heavily influenced by population density, however, much more important to transit is the concentration of downtown jobs. A major reason for transit’s decline has been the dispersion of jobs from concentrated job centers to distribution across the urban landscape. O'Toole finds the only urban areas whose transit systems carried more than 10 percent of commuters had more than 240,000 downtown jobs.

Transit is Slow:

image

The average speed of transit is 15 miles per hour while the average speed of urban driving is at least 27 miles per hour.

Nearly Everyone Has a Car:

image

Americans have responded to the automobile’s advantages over transit by steadily increasing automobile ownership, with 21 percent of American households having three or more cars and fewer than 9 percent having no car. Making matters even more difficult for transit, about half the households with no cars also have no workers: only 4.3 percent of American workers live in households that have no cars. In addition, more than 20 percent of workers in carless households nevertheless drive alone to work (probably in employer-supplied cars) while fewer than 42 percent take transit to work.

Transit is Expensive:

image

Per passenger mile, transit costs more than four times as much as driving, and transit subsidies are more than 70 times larger than highway subsidies.

About Half the Cost of Transit Is Because It Is Government-Run:

image

Today transit carries fewer than 27,000 riders per operating employee compared to 59,000 riders per employee in the decade prior to 1964, the year Congress gave cities and states incentives to municipalize transit systems.

Since 1970, Subsidies Have Exceeded $1.3 Trillion:

image

Current total transit subsidies total more than $50 billion a year, with annual subsidies averaging more than $150 per U.S. resident even though most people rarely, if ever, use transit. A major problem with transit agencies’ dependence on subsidies is that such dependence makes them more beholden to politicians and their backers than to transit riders. Agencies become willing and eager to approve cushy union contracts and gold-plated infrastructure projects that do little to improve local or regional transportation. Meanwhile, politicians neglect the maintenance of existing systems, leading to frequent breakdowns.

Growing Subsidies Haven’t Boosted Transit Ridership:

image

At best, the tens of billions of dollars in annual transit subsidies have only slowed the decline in ridership.

Transit Is Increasingly Used By High-Income People:

image

The 2010 Census found that people who earned $75,000 or more per year were more likely to ride transit than any other income class.

Transit Isn’t Green:

image

In all but four urban areas, transit uses more energy and emits more greenhouse gases per passenger mile than driving.

Transit Spending Doesn’t Boost Urban Growth:

image

The fastest-growing urban areas in the 2000s were ones that spent the least on transit improvements in the 1990s, while urban areas that spent the most on transit improvements were among the slowest-growing regions.

Learn more…

The Failing Future of U.S. Public Transit

The future of public transit in most U.S. cities is in jeopardy…

image

Public transit is one of the most heavily subsidized consumer-based industries in the United States, with annual subsidies of $50 billion covering 76% of its cost. 

But, total transit ridership — not just per capita — is declining, with a 4.4% drop nationwide from 2014 to 2016 and a 3.0% drop in the first seven months of 2017.

Plus, four trends that are likely to become even more pronounced in the future place the entire industry in jeopardy….

1. Ride-hailing services and the development of driverless cars are the largest threat to transit systems. Driverless cars will likely have more competitive rates than public transit, making them more convenient and just as economical. This technology will greatly benefit low income passengers who previously did not use ride-hailing services due to their higher costs. Once driverless cars are released in the market, it is likely that all need for public transportation — outside of New York City and perhaps a few other localities — will disappear within the decade.

2. Low oil prices have also affected transit ridership. Historically, when gasoline prices are low, public transit ridership declines, as research shows that it is more cost effective for people to commute via car. With new energy technologies, the U.S. is no longer heavily dependent on foreign countries for oil and as a result, oil prices have dropped, continue to remain low, and will likely stay low in the future.

3. Many transit companies choose not to allocate the billions of dollars that are required to maintain public rail systems. Most politicians favor spending subsidies on building “glitzy” new rails rather than improving old systems, which only exacerbates maintenance costs. For the D.C. Metrorail system alone, WMATA estimates that the system has a $6.7 billion maintenance backlog and needs to spend $17.4 billion over the next 10 years to fix and prevent the backlog from growing again.

4. Transit agencies have allowed unfunded pension and healthcare obligations to grow to staggering levels. Many systems, including Portland’s TriMet and Washington, D.C.’s WMATA, have unfunded obligations larger than their annual operating budgets. 

Instead of pumping federal aid into declining systems, policymakers should begin to prepare for the orderly phase-out of public transit in most U.S. cities

Transit systems, outside of a few very dense areas, should stop building new lines, replace most existing rail lines as they wear out with buses, pay down debts, and target any further subsidies to low-income people.

Learn More…

WMATA’s 29 Hour Shutdown

image

Originally posted by 5by5kevin

In October 2015, Cato Institute’s Randal O’Toole awarded the Washington Metropolitan Area Transit Authority (WMATA) the dubious honor of being the nation’s worst-managed transit agency. 

It is no surprise then that just this afternoon, WMATA announced it was shutting down the entire Metrorail system for safety checks for 29 hours beginning at midnight tonight. 

This sums up Metro riders reaction to this news… 

image

Originally posted by gurlslife

Randal O’Toole has ideas on how to improve Metro and transit in general, WMATA take note: 

Amtrak Is No Way to Run a Railroad

image

If taxpayers suddenly stopped subsidizing Amtrak, what would happen? Richard Rahn weighs in…. 

This Is Why Amtrak Should Get More of Your Money?

Should we subsidize Amtrak so that a few snobs can ride expensive trains that are mostly empty? Read this blog post from Randal O’ Toole and find out. 

image

Cato Institute research on federal railroad spending cited on FOX’s Happening Now.

"Politicians prefer to spend money building new infrastructure over maintaining the old."

— Randal O’Toole, catoinstitute Senior Fellow discussing the Amtrak crash and why more infrastructure spending won’t prevent future tragedies. Read his recent Newsweek op-ed here

"It is too soon to tell what caused the Amtrak train crash…but advocates of increased government spending are already beginning to use the crash to promote more spending on infrastructure…In fact…the problem is that too much money is being spent on infrastructure, but in the wrong places."

— “The Amtrak Crash: Is More Spending the Answer?” by catoinstitute senior fellow Randal O'Toole

Rapid Bus: A Low-Cost, High-Capacity Transit System for Major Urban Areas

imagePrompted by federal funding, more than 30 American cities have built or are building new rail transit lines. These expensive lines have debatable value as they put transit agencies in debt and impose high maintenance costs, yet they carry few riders more than the buses they replace and produce minimal, if any, environmental benefits.

In a new study, Rapid Bus: A Low-Cost, High-Capacity Transit System for Major Urban Areas, Cato scholar Randal O’Toole proposes an alternative to rail transit: a “rapid bus” system that would offer fast, frequent, and comfortable transportation to most people in an urban area.

This latest analysis, which serves as a follow-up to his previous writing, The Worst of Both: The Rise of High-Cost, Low-Capacity Rail Transit, provides a comparison between a rapid-bus system and a traditional rail system in a hypothetical American city of two million people. O’Toole’s findings are staggering and call for a serious reexamination of the continued funding of commuter rail lines.

Through an in-depth examination of several factors, O’Toole constructs a comprehensive comparison between a commuter rail system and a rapid-bus system in a fictional American city of roughly two million people. Factors such as bus routes, express lanes, neighborhood circulation and downtown circulators, varying bus models, fare collection and platforms, frequencies and speeds, system capacity, and system costs are all examined in order to gain a complete picture of the benefits of buses over rail lines.

Some findings include:

  • Rapid bus lines can serve more people, more frequently, at faster speeds and lower costs than rail lines.
  • Rapid bus lines are scalable with low incremental costs as downtown employment centers grow, while commuter rail lines possess huge start-up costs and are extremely expensive to expand.
  • A four-line light-rail system can only transport about 36,000 people per hour into a downtown area, while rapid bus lines can carry as many as 140,000 people per hour into downtown.
  • As rail systems age and deteriorate in cities such as Philadelphia, Boston, Chicago, and Washington D.C., cities could save taxpayers hundreds of millions of dollars by replacing them with rapid bus lines.
  • Commuter rail lines have debatable value, as they put transit agencies in debt and impose high maintenance costs, yet carry few riders more than the buses they replace and produce minimal, if any, environmental benefits.

O’Toole’s proposed solution is a simple one: better bus systems. With small amounts of new infrastructure and only minimal monetary investment, cities around the United States could be moving more people more efficiently, and at a lower cost to both commuters and taxpayers.

Infrastructure Investment: A State, Local, and Private Responsibility

Despite huge and ongoing budget deficits, some policymakers are proposing to increase federal spending on infrastructure.

President Obama on Thursday unveiled a new federal infrastructure initiative, and has been campaigning for Congress to pass a long-term highway bill. The president and other leaders believe that more federal spending on roads, rail, and other assets will boost growth and create jobs.

However, according to Cato scholars,  devolving infrastructure activities to the states and the private sector is actually a more sound plan.

“Private firms can build and run roads, bridges, and transit better than the government," writes Chris Edwards. 

Randal O'Toole takes it one step further, firmly stating that the United States is absolutely not facing an infrastructure crisis, at least with regard to transportation.

"That’s just a story told by people who want to raise your taxes so they can get rich,” explains O'Toole.