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Sensical Subsidies
In a recent Tuesday Talk, Minnesota 2020's readers debated about infrastructure, and a theme developed in favor of expanding transit. This theme was echoed at the State Fair, where the Counties Transit Improvement Board booth saw a lot of hopeful transit supporters.
Transit has a lot of benefits, but one of its major draws in a recessed economy with volatile oil prices is its low cost—for the riders. A Tuesday Talk commenter, KJC, expressed support for transit expansion but brought up the issue of cost and subsidy. We all know transit is subsidized, but to what extent?
According to Metro Transit's John Siqveland, the 2009 per-passenger subsidies for all types of bus service together were $2.47, and the per-passenger subsidy for the Hiawatha LRT was $1.34. In a recent internal Metro Transit publication, Metro Transit's general manager Brian Lamb laid out the latest statistics from the National Transit Database, revealing that the Twin Cities bus system has 17% lower per-passenger subsidies than peer regions, making it the fourth lowest among those peer regions. He also revealed that the average Twin Cities taxpayer contribution to transit is 30% lower than the average for peer regions—regions including Boston, Portland, and Seattle.
Northstar commuter rail is still a relatively new service, so exact numbers are hard to find. During a State Senate Transportation Committee hearing last January, however, Lamb gave Northstar's basic subsidies. He stated that the per-passenger Northstar subsidy is $18, but its projections for this time were $14, and its projections for the long term are $10 per passenger. The projections for the Central Corridor per-passenger subsidy are the same as Hiawatha's current subsidy.
These subsidies are often targeted by critics as an evil of our transportation system. It bears pointing out, though, that roads and highways are heavily subsidized, as we have written about several times. Additionally, subsidies are tools to encourage behavior, which is theoretically beneficial enough to justify said subsidies.
Public transit provides energy efficient transportation, decreased congestion, increased mobility options, and a lower footprint on the environment than single-occupancy vehicles. In contrast, subsidizing cars through road construction and maintenance (which are not covered by user fees) provides great benefits for that type of mobility, but it doesn't address the many negative consequences of driving (e.g. emissions, oil-dependence, congestion). If anything, the subsidies to transit are some of the most sensical of our transportation system.
As for expanding transit, it's more complicated than blanket expansion. As we wrote when a new Brookings report on the subject came out, it is imperative for transit to be coordinated with employment centers, especially for Minnesota's sprawling metro. Transit corridors are being planned and replanned, and the investments we are making in transit are smart ones, of which the Central Corridor is a prime example.
Of course, transit in Minnesota suffered a $51 million cut after the dust cleared after the nasty shutdown-causing budget fights, which is nothing but the wrong direction for a service that it makes sense to subsidize.
Photo credit: Dawn Easterday, Creative commons
Posted in Transportation | Related Topics: Public Transportation Light Rail Transportation Funding
1 Comment
free transit says:
September 27, 2011 at 8:47 pm
Well done, but you have only scratched the surface of the list of externalities of the auto-system. What about energy wars and climate change? About the term “subsidy,” do we call public schools subsidized? No, they are a public investment. Without public transit the economy would quickly grind to a halt. It should be fare-free. This can be done. It is being done. Cities with transit will win the economic future. Free transit will get us there faster.