NCPA - National Center for Policy Analysis

Transportation: From the Top Down or Bottom Up?

June 2, 2011

Fifty years ago, America's transportation system was almost entirely funded from the bottom up.  Airlines, railroads and most transit systems were private and funded out of fares and fees.  The bottom-up paradigm began to break down in 1964, when Congress started funding urban transit, says Randal O'Toole, a senior fellow with the Cato Institute.

  • In 1973, Congress allowed cities to use federal gas taxes for transit projects for the first time, and in 1982 Congress dedicated a share of those gas taxes -- initially 11.1 percent, now 15.5 percent -- to transit.
  • By the 1990s, the whole idea of a user-fee-driven system was forgotten as Congress used transportation earmarks, which didn't exist before 1982, to divert billions of dollars of gas taxes to politically favored projects -- which often had nothing to do with transportation -- and dedicated increasing shares of the remainder to non-highway programs.
  • The results of this increasingly top-down system have been huge increases in congestion and massive waste as cities and states today focus scarce transportation funds on urban monuments rather than improvements aimed at increasing mobility.

No matter how well intentioned, top-down transportation planning quickly turns into a combination of social engineering and pork barrel.  It is time to return to a bottom-up funding system that rewards transport agencies and companies for reducing costs and increasing mobility, says O'Toole.

Source: Randal O'Toole, "Transportation: From the Top Down or Bottom Up?" Huffington Post, May 25, 2011.

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