Congress Is Toying With the Future of Mass Transit

A proposal to eliminate a share of the federal gas tax dedicated to public transportation would devastate urban mobility.

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Reuters

On Friday the House Ways and Means Committee passed a vote that would fundamentally reverse 30 years of federal public transit funding, and not in a good way. The vote approved a plan to eliminate the transit account of the Highway Trust Fund. The trust fund pays for road construction largely with money collected through the federal gas tax. Since the early 1980s, some of that tax has gone toward the payment of mass transit projects — the transit account presently receives 2.86 cents of the 18.4-cent federal gas tax — but the new plan would keep all that money invested in roads.

To soften the blow, the plan would deliver a one-time payment of $40 billion into a newly created "alternative transportation account," paid for out of the general treasury. However that account would be subject to the same appropriations process as everything else in the general budget, and therefore could be reduced in the future. Simply put, mass transit systems will no longer be able to rely on the guaranteed funding provided by the transit portion of the federal gas tax. In the words of Democratic congressman Charles Rangel, via Reuters: "It's really a shot in the heart to metropolitan areas."

The proposal comes at a time when many cities have already been forced by funding cuts to raise fares or reduce service. In New York on Monday, a press conference at Grand Central Station quickly came together oppose the plan, including the new head of the Metropolitan Transportation Authority, Joe Lhota. The MTA stands to lose about a billion dollars a year in capital funding if the transit account is eliminated — a considerable sum that could impact the development of the Second Avenue subway line. New York City transit is in many ways an outlier, but systems across the country stand to suffer. New Jersey Transit would lose about a third of its $1.16 billion budget under the plan, according to the Star-Ledger.

At the heart of the debate is the fact that the Highway Trust Fund is nearly insolvent. A recent report from the Congressional Budget Office predicts that the fund will run dry "sometime during 2013" [PDF]. The fund can't keep a negative balance by law, so it would have to receive an injection from the general treasury to stay in the black. That's nothing new — the fund has received nearly $35 billion from the general treasury since 2008 — but House Republicans see the new proposal as a way to keep the Highway Trust on more solid financial footing in the years to come. To quote a spokesman for the House Transportation and Infrastructure Committee (via Transportation Nation):

Republicans are not anti-transit, but we do recognize that the Highway Trust Fund is paid for by highways users, and cities and local governments must look at developing a similar user fee system for transit users.

This statement has a good deal of logic to it, but it represents a common misunderstanding about transportation funding that's important to unpack. The suggestion here is that highway costs are paid for strictly by highway user fees (i.e. the federal gas tax), and that, likewise, transit costs should be paid for strictly by transit user fees (i.e. fares). (The idea that Republicans are "not anti-transit" is another one worth considering — yes, Reagan did enact the mass transit account in the early '80s; he also wondered why people in Sioux Falls should pay for transportation in Washington, D.C. [PDF, p. 128] — but it will have to wait for another time.)

To start the discussion, even defenders of public transportation must acknowledge that mass transit in cities requires enormous government subsidies to exist. The reality is that reasonable fares can't cover all the capital and operating costs of most transit systems. However most developed societies are willing to devote general public money to transit because they recognize that cities are great economic engines, that they need mobility to thrive, and that expanding roads in urban areas is both prohibitively expensive and incapable of easing congestion alone. 

Whether you take the negative view (I'm on a Sioux Falls road paying for D.C. transit) or a positive one (D.C. generates the money that makes life in Sioux Falls better), the reality is that public transit is subsidized with public money. Where the debate goes astray is the misguided belief that roads are not subsidized with public money as well. Many local roads, for instance, don't receive funding from the Highway Trust Fund, nor even from local property taxes. In fact, since the end of World War II, roughly $600 billion has been transferred from the general federal treasury to pay for roads, according to a report by U.S. PIRG published early last year [PDF]. (And if you don't want to take a think tank's word for it, check out the Department of Transportation's own numbers.)

The road subsidy discussion also tends to gloss over the social costs of automotive transportation. These include public space devoted to parking, time and money lost to congestion, and environmental impacts, among others. Such costs can be tough to measure, but they do exist, and they are not covered by user fees like the federal gas tax. In short, road expenses may not be subsidized to the extent that transit is, but they are subsidized. The difference is that most automobile subsidies are generally hidden from the public eye.

In that sense, then, discussions like the one going on in the House right now serve as a welcome reminder that no transportation mode subsists on its own. Urban areas need public transit funding to create a balanced transportation system within limited space, but in return they generate a great deal of economic activity that's dispersed to those who prefer to live in non-urban regions. That's one reason why even pro-highway groups like the American Association of State Highway and Transportation Officials opposed the House proposal [PDF]. It's also the reason why urban mobility advocates must work hard to make sure that plans like this one exist only as teachable moments, without becoming immutable laws.

Top image credit: Reuters/Jonathan Ernst

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