NCPA - National Center for Policy Analysis

Reason Study: Public Transit Is A Bad Investment

August 1, 1998

The deficits and operating losses of public transit programs have skyrocketed over the past 30 years, while the number of passengers served per dollar has declined steadily, says a study by transportation expert John Semmens, published by the Reason Public Policy Institute.

The study challenges the methodology and conclusions of a 1997 study, entitled "Dollars and Sense," released by the Campaign for Efficient Passenger Transportation, a coalition of transit special interest groups. For instance, the coalition's study claimed transit ridership is increasing -- but actually it counts transfers from one bus to another as a separate trip.

  • From its peak in 1945, rates of ridership on urban public transport have declined from 30 percent to around 3 percent recently, says Semmens.
  • And riders must pay higher fares because transit operating costs have risen almost four times faster than inflation over the past 30 years.
  • Thus taxpayers' "investment" in public transit has been rewarded with steadily deteriorating performance -- with deficits increasing, fewer passengers per dollar spent and per vehicle mile.
  • In fact, funds spent on public transit could have generated an additional capital stock of $400 billion and supported an additional seven million jobs if business tax cuts had been implemented instead of transit subsidies over the past 30 years.

Contrary to the claims of some public transit supporters, the Reason study also argues that transit vehicles have higher fatality rates per vehicle mile traveled than automobiles; poor people overwhelmingly choose other modes of travel to get to work; and transit receives 20 times as much subsidy on a per passenger-mile basis as do highways.

Source: John Semmens, "Rethinking Transit 'Dollars and Sense': Unearthing the True Cost of Public Transit," August 1998, Policy Study 243, Reason Public Policy Institute, 3415 S. Sepulveda Boulevard, Suite 400, Los Angeles, Calif. 90034, (310) 391-2245.


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