The U.S. Mass Transit Dilemma

By Michael Fumento

Investor’s Business Daily, April 20, 1992
Copyright 1992 Investor’s Business Daily

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If anyone doubted that mass transportation was making a comeback, that doubt was dispelled last year when Los Angeles — land of the almighty automobile and the cloverleaf interchange — began service on its Blue Line rail between downtown L.A. and Long Beach, located about 25 miles south.

But the question some are asking is: Should it be making a comeback?

Mass transit has definitely improved over the years, but remains a money loser.

Once the queen of urban transportation, streetcars have been in decline across the country since shortly after World War II, when New York and other cities across the country began paving over their surface rails.

Often the streetcars were replaced with buses. But buses, too, fell out of favor. Mass transit ridership declined from 23.5 billion passengers in 1945 to only seven billion in 1975, during which time the population of U.S. metropolitan areas doubled.

The revival began in the 1960s when Congress created the Urban Mass Transportation Administration, which began pumping billions of dollars into cities to convert private transportation systems into public ones and to begin re-laying rail lines.

Nevertheless, as a percentage of the urban population, transit ridership has continued to decline.

Indeed, per-capita transit ridership has dropped in all the urban areas that opened or expanded rail systems in the 1980s including Atlanta; Baltimore; Washington; Portland, Ore.; Sacramento, Calif.; San Diego; San Francisco; Miami and Buffalo, N.Y.

Nonetheless, Denver is soon to join the ranks of cities installing new tracks, and Los Angeles’ planned rail system is a mammoth 300 miles slated to cost $78 billion over 30 years. Costs for construction, however, are already running about 15% over budget.

The main reasons given for expanding rail service and mass transportation are to lessen automobile traffic congestion and air pollution, but careful analysis reveals that mass transit is not necessarily a cure for either.

At a glance, rail would seem to reduce congestion. Simple mathematics shows that a given number of commuters using rails or buses is that many fewer on the freeways.

But it doesn’t really work that way.

For one, studies have shown that many of the passengers on new rail systems merely switched over from buses — the main form of urban mass transit in America.

Moreover, urban planners have found that to the extent that freeway traffic is lightened, it simply encourages more drivers to get back on.

At any rate, rail systems have only managed to pull tiny numbers of people off highways in the areas they serve. In Portland, for example, the rail system removed less than 0.5% of automobile riders off the freeway.

As for environmental and energy-consuming advantages, again the theory sounds good. A bus or train can consume less fuel per passenger, if there are enough passengers in the vehicle.

But the best-case scenario is a rare one.

According to the U.S. Department of Transportation, the average public transit vehicle in the U.S. operates with more than 80% of its seats empty. Energy consumption per passenger mile is now greater for buses than for private cars, and much greater than for car or van pools.

Rail systems have an added disadvantage in that digging tunnels and laying roadbeds are intensely energy consuming, so much so that a 1982 Congressional Budget Office study concluded that "under typical conditions rapid rail systems actually waste energy rather than save it."

These same criteria apply to pollution. Studies that purport to show less pollution in cities that have recently started rail systems do not take into account that pollution levels in all U.S. cities have declined since auto emission standards were severely tightened beginning in the early 1970s.

Much of the problem with rail transportation is lack of use.

Ride the rail anywhere in Atlanta, just $29.47 (actual cost) per ride.

According to a DOT study, for example, new transit trips on weekdays in Atlanta’s rail system have been 63% less than that forecast. On Portland’s rail system, they have been 78% less than predicted.

Underuse of the system means that each trip costs more. Thus, Portland’s projected cost per trip of $1.14 actually became $9.49 a trip.

That sounds expensive, but it is low compared to most new rail systems. The cost per trip on Washington’s Metro is $11.97, for Baltimore it’s $13.56, for Atlanta $29.47 and for Pittsburgh a startling $34.64.

Translated into cost per commuter per year, the expense of diverting each commuter from an automobile was $4,702 in Portland and $14,397 for the Atlanta line.

To some, that makes an open-and-shut case against rail systems and perhaps mass transportation. That, too, may be wrong.

Mass transit advocates point out that freeway transportation is also massively subsidized.

For example, they note that gasoline taxes and license fees cover only a small portion of the costs created by private transportation, costs paid out of general revenues or by businesses. According to the National Taxpayers Union, the government spends about $22 billion out of general revenues in direct subsidies for highway travel.

But direct subsidies may only be part of the problem.

Consider, for example, employee-provided parking. Economist Donald Shoup of the University of California at Los Angeles has.

In studies with other researchers, Shoup has found that nationally over 90% of auto commuters park free, including about the same percentage of those working in the Los Angeles area, where parking and freeway space are at a premium.

A 1990 study by Shoup and another researcher found that the average daily equivalent cost of monthly parking in downtown Los Angeles was $3.87, meaning that those 90%-plus employers were subsidizing each employee vehicle to the tune of almost $4 a day.

Shoup says the result is that 37% more cars are driven to work than would otherwise be the case.

He suggests remedying the situation by having employers offer a cash alternative to those who do not drive to work and take up a parking space.

Said Shoup, "Here’s a policy that would reduce traffic congestion, air pollution, and gasoline consumption and would do this by bringing commuters’ travel choices in line with their own preferences about how they would spend their own income."

Yet parking is far from the only "freebie" that those using private transportation receive. Other costs include maintaining police and repairing vibration damage in older inner-cities. Those costs can be measured.

Then there are the difficult-to-measure costs borne by the general public such as disease caused by air pollution.

Brian Ketcham, of the Brooklyn-based environmental and transportation company Konheim & Ketcham, says that hidden costs in private transportation add up to about $400 billion a year — compared to about $3 billion in direct federal subsidies for mass transportation, plus a few billion more in state and local subsidies.

Nobody doubts that freeways are filling up and motorists are angry, but is mass transit the solution?

To compensate for these costs directly instead of through the general revenues, he says, gasoline taxes would have to be increased by $2.57 per gallon.

But some of these costs may be questionable. Ketcham, for example, argues that the largest indirect cost is congestion. He estimates that transit congestion costs about $168 billion annually due to delays and lost productivity — and that this, too, must be figured into the cost of private transportation.

The problem is that congestion from private transportation is nothing when compared to delays on public transit due to stops and connections.

For example, the 40 mile commute from downtown Los Angeles to Laguna Hills in neighboring Orange County can take two hours in the evening rush hour, less than an hour at other times.

But the same trip by bus or by rail and bus using Orange County mass transit and Los Angeles’s Southern California Rapid Transit District will take anywhere from three and one half to four and one half hours, depending on the time of day.

So how can a community decide whether it should operate a major mass transportation system?

The problem with the entire mass transit versus private transit debate, says National Taxpayer Union (NTU) President James Davidson, is that both means of transport are so heavily subsidized that it’s difficult to tell who would use what if they had to pay the full cost.

"Our goal seems to be to subsidize everybody," he said. "The whole thing is absurd."

There is no apparent reason, says Davidson, for subsidizing travel in general. There is no good that comes out of people living 10 miles from work instead of two miles, or going across town to a store instead of down the block.

Indeed, transportation, no matter how efficient, always creates a certain amount of pollution and requires a certain amount of time. It is difficult to justify a subsidy of either of these.

So why are we doing it?

Much of it is politics, of the pork barrel variety.

For both new freeway and construction and for mass transit systems, much of the funds come from federal money brought back to the district by congressmen. Under the Federal Highway Act, the federal government picks up 80% of state highway costs, and 90% of the cost for interstates even though most freeways carry overwhelmingly local traffic.

Moreover, federal subsidies for mass transit capital are determined on a case-by-case basis — giving Congressmen an incentive to swap and trade home district pork barrel "projects" with others.

Either way, the promise of bringing billions of federal dollars to the home district has proven irresistible to many a congressman.

Brian Kelly, author of Adventures in Porkland, to be published in August by Random House/Villard books, told Investor’s Business Daily that "Transportation, especially mass transit, has become one of the great troughs."

The $151 billion transportation bill that received overwhelming approval in both the House and Senate, and which President Bush signed into law late last year, "is probably the porkiest bill in history," said Kelly.

House Public Works Chairman Robert A. Roe, D.-N.J., he said, "essentially went door to door for the bill and asked representatives what they wanted" in order to gain support for the bill, which would bring $5.6 billion into his own district. Those who said they wouldn’t vote for the bill, Kelly said, would find no money going back to their districts.

The result was a bill which included no fewer than 539 highway "demonstration" projects costing over $6.23 billion for 1992 alone. That occurred even though the entire highway allocation for the six-year bill is less than $120 billion.

These projects, Kelly said, are "intended to be experiments in transportation, but in reality (are) just goodies to be doled out to a favored few."

But Kelly also writes: "Billions of dollars (which) are spent annually to fund suspiciously underused mass transit systems ..."

Davidson says what is required is, to the greatest extent possible, strip away the subsidies on both sides, and to let both private vehicle users and mass transit users pay the full price.

Then the highways could employ peak pricing practices such as the airlines, movie theaters, and many other private industries do, to discourage too many people from being on the highway at the same time.

And cities with high population densities and the kind of geography that lend themselves to mass transportation and rail systems might find them relatively profitable, says Davidson.

As it now stands, he said, "We haven’t even gotten the debate into the environment where it needs to be held."


Read Michael Fumento’s additional work on economics, on politics and on transportation.