Federal law is blocking local efforts to improve public transit and to lower costs by encouraging private companies to compete for contracts to run local bus systems.

Section 13(c) of the 1964 Federal Transit Act, reaffirmed by the current Congress, requires that any public transit worker "negatively impacted" by competition may receive six years of salary and benefits. This is one of several mandates that are tied to federal mass transit funds and are aimed at protecting the jobs of unionized workers, whose pay is often three to four times as much as that of workers in the private sector.

• The federal government contributes less than 5 percent of all mass transit operating funds, about $4 billion a year, but its mandates gobble up 10 percent to 15 percent of local mass transit costs.

• Section 13(c) alone costs local transit authorities $2 billion to $3 billion a year.

Since federal subsidies began 30 years ago, government at all levels has spent $200 billion on mass transit projects. However, in that time transit ridership has dropped 15 percent and operating costs have increased 105 percent.

• Competition could save mass transit 20 percent to 60 percent each year, according to consultants for the American Legislative Exchange Council.

• With expanded routes and better service, ridership would rise by 50 percent, and an estimated 100,000 new workers would be added.

• For example, competitive bidding to provide "Open Door" service for the disabled allowed Indianapolis to serve more than twice the number of daily riders for the same amount of money.

Source: John Walters, "Bus-jacking the Revolution," Policy Review, January/February 1996, Heritage Foundation, 214 Massachusetts Avenue, NE, Washington, DC 20002, (202) 546-4400.