NCPA - National Center for Policy Analysis

Subsidizing Rail Passenger Service

May 27, 2003

Subsidies for mass transit were the Republican response after 1968 to urban protests against interstate highways through existing urban neighborhoods. How have transit providers responded to the subsidies?

As you would expect, says Peter Van Doren of the Cato Institute, they have lowered their productivity and expanded service so that suburban voters, who pay the taxes, now have service.

  • From 1991 through 2000, transit capital expenditures amounted to $70 billion.
  • But the number of people using transit to go to work was flat at about 6 million (4.7 percent of workers) from 1990 through 2000, even though the number of workers increased by 13 million during the decade.
  • Transit-worker productivity fell from 150,800 passenger-miles per full-time-equivalent employee in 1990 to 133,100 passenger miles per full-time-equivalent employee in 2000.

But for almost 50 years, rail lovers, passengers and unionized employees have convinced Congress to ignore economic reality and subsidize rail passenger service -- always with the stated belief that it will be viable without subsidies at the end of the current reauthorization period.

Source: Peter Van Doren (Cato Institute), "Let the market free up transportation in U.S." Hill, May 14, 2003.


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