Mass-transit advocates are making a big push in the current session of Congress for a sizable increase in federal support. If lawmakers act with regard to transit's record over the last three decades, they'll look with great skepticism on these requests. Public transit's biggest problem is not lack of money but a failure to control costs.
Since the government bailed out private transit operators in the mid-1960s, nearly $100 billion in subsidies from all levels of government has been funneled to these systems.Despite these outlays, per capita ridership has fallen while per-mile operating costs for the past decade have risen some 30 percent faster than the national inflation rate. Transit costs have increased faster than every element in the Consumer Price Index, including health care.
Despite this dismal record, the American Public Transit Association is lobbying Washington for a lavish five-year, $11 billion program that would increase transit's share of the fuel tax from 1.5 to 7 cents. For fiscal 1992 alone, APTA is seeking $5.5 billion, while the Bush administration is seeking $3.3 billion (a slight increase over current levels).
Transit, says APTA, is a clean-air issue. Transit improves mobility. Transit will reduce gridlock. To achieve these goals, however, transit must improve efficiency. For too long Washington has ignored the reality that something is profoundly wrong with the incentives embedded in public policy.
"We simply have not found a way to get people out of their cars and onto public transit," says Wendell Cox, a transportation consultant and former member of the Los Angeles County Transportation Commission.
Cox, who now crunches numbers from an office in Belleville, Ill., says that while transit costs were outstripping inflation, operating costs for the private bus industry - which provides a rough standard - declined relative to inflation.
It should be clear that throwing larger sums at public transit probably will do little to increase ridership because most of the outlays will be gobbled up by higher costs rather than allocated for improved service or lower fares.
This is not an argument that all federal subsidies should be scrapped. Transit must play a role in any rewrite of transportation policy. Moreover, transit can claim some scattered successes. Ridership on Portland's light-rail system and a new light-rail line in Los Angeles are above estimates. In San Diego local officials say ridership is growing faster than the area population.
The real issue is not whether to subsidize, but how to craft policies that encourage transit agencies to be more productive. With that in mind, the Bush administration has called for elimination of operating subsidies for the largest agencies. The White House says federal money should go exclusively for capital expenses, with the federal share cut from 80 percent to 60 percent.
At this point the outright elimination of operating money doesn't seem likely. An abrupt cutoff would be disruptive and no doubt would lead to higher fares and diminished ridership in many cities.
Yet for the long term, forcing state and local authorities gradually to pay more of their operating costs is probably a good idea, and less Draconian than it sounds.
How can transit authorities cut costs? In studies and published articles, Cox has made the case for increased reliance on competitive contracting or bidding out more routes to private operators who provide services based on transit-agency specifications.
Cities that have tried this on a concerted basis have found it a double-edged source of efficiency. Since private operators provide the service at a significantly lower cost, the resulting private-public disparity creates pressure for transit officials to hold down their own costs.