NCPA - National Center for Policy Analysis

Mass Transit Subsidized Heavily

July 16, 2012

Advocates of mass transit like to point out that it isn't the only form of transportation that gets public subsidies. In particular, road construction and maintenance have benefited from increased taxpayer subsidies over the last decade and a half that, in absolute terms, are much larger than government support for public mass transit, says Josh Barro in City Journal.

However, while it's true that the government subsidizes all modes of transportation, road subsidies remain a small component of public and private spending on auto travel. A fair look at the whole picture shows that government subsidizes mass transit much more heavily than it subsidizes driving and that transit's problems go far beyond subsidies for cars.

The state of Wisconsin offers a fair microcosm in which to understand this comparison.

  • The mass-transit backers say, correctly, that the federal gasoline tax hasn't been increased since 1993; since then, inflation has reduced its real value by about one-third.
  • Thus, a greater proportion of support for roadways and car travel is paid for through general revenues; that is, subsidies.
  • 1,000 Friends of Wisconsin, a smart-growth mass-transit backing advocacy group, notes that "between 41 and 55 percent of [Wisconsin's] road money comes from non-users."
  • The subsequent line of reasoning, then, might be that this figure is comparable to the 65 percent of the budget of the Milwaukee County Transit System that was covered by subsidies in 2010.
  • Similarly, Madison's public-transit system got a whopping 74 percent of its budget from subsidies that year.

This comparison, however, is grossly unfair, as it fails to view government support as a fraction of the total cost of automobile transportation. When this is included, the prevalence of government road subsidies is greatly diminished.

  • In 2008, Americans spent $500 billion on motor fuel (not counting the excise tax) and $173 billion on new cars (not counting taxes and fees).
  • Also, according to figures derived from the Bureau of Labor Statistics' Consumer Expenditure Survey, American households spent $223 billion on vehicle maintenance, repairs and insurance.
  • As for highway construction and maintenance, governments at all levels spent $181 billion on them, of which only $83 billion came from general revenues.

This subsidy level is approximately 8 percent, which is far less than the level of government support that is received by mass transit systems nationwide.

Source: Josh Barro, "Autonomy," City Journal, Spring 2012.

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