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|Anne Korin and Kenneth P. Green||November 29th 2010|
At a time of soaring deficits and taxpayer fury about govern- ment waste and intervention in the economy, Congress must change its attitude toward spending taxpayer money; here's a good area to start the change: transportation policy reform. Government subsidies have bequeathed us crumbling bridges, highways to nowhere and train lines that can't pay for their operating costs, much less recoup any of their capital costs. This wouldn't happen if there were more private-sector involvement and infrastructure was built and tolled to pay for its construction and maintenance. It's time to change the way we fund transportation infrastructure, including transit, to a model grounded in basic economics. That means paying for what you get and getting what you pay for.
Populist politicians on both sides of the aisle have at various times demagogued both tolls and transit-fare increases, implying that Americans have an inherent right to stick future taxpayers with a bill for the infrastructure we want today. But the only way to really know if something should be built (or maintained) is if the users of the infrastructure in question are willing to pay for it. We need pricing that better reflects costs instead of hiding them through indirect taxes.
For example, if we're going to use taxpayer money to subsidize mobility for low-income people, rather than pouring in across-the-board subsidies for transit agencies, wouldn't it make sense just to target aid to the people who actually need it via mobility vouchers that can be used not just on public-sector transit but also on private-sector buses, shuttles, van pools and jitney buses - a similar concept to food stamps? With the regressivity issue covered, transit agencies could raise their general ticket prices to cover actual costs.
Government spending on rail also tends to be economically regressive, offering subsidized transportation to better-off suburbanites while offering relatively little to the poor who rely more on buses. Straightening out the prices would address this as well.
And why not remove obstacles the government has put in place that block private-sector entry to transit? Taxpayer-funded facilities such as train stations and subway stops should not be able to block private-sector transportation providers from picking up passengers. And jitneys should be able to pick up multiple passengers along the same routes as city buses if they choose to do so.
It's disrespectful to taxpayers to tout projects as energy-saving when they actually turn out to be boondoggles that waste not just money, but energy too. That includes high-speed rail lines that don't serve a corridor in which people are willing to pay a premium for fast service. If Congress is going to spend taxpayer money on high-speed rail, the least it can do is structure policy that has some chance of making economic sense (and that inherently means it will make sense from an energy perspective). As a general rule, the higher the subsidy required to attract passengers, the less valuable an alternative the service provides.
Trains run on energy, too, and if they are running empty or need to be so heavily subsidized per passenger that they undercut efficient, private-sector intercity bus service - in effect using taxpayer money to drive companies that are now providing transportation choice out of business - then on net they use more energy per passenger than otherwise would be expended. The Pew Charitable Trusts' Subsidyscope reported that "41 of Amtrak's 44 routes lost money in 2008, with losses ranging from nearly $5 to $462 per passenger depending upon the line." Unsurprisingly, the heavily populated Northeast-corridor Acela route generated a profit.
Similar wastefulness afflicts buses, as well. If Congress is going to spend taxpayer money subsidizing public-sector buses claiming this saves energy, it must ensure that money isn't going to lines that run mostly empty. From an energy and environmental perspective, having a full-size bus carry two or three people is worse than chauffeuring each person in a Hummer.
When it comes to our transportation infrastructure, we are on an unsustainable path, and it's time for some of that hope and change we've been promised. Moving to a more market-oriented transportation system would be a ride in the right direction.
Anne Korin is co-director of the Institute for the Analysis of Global Security, and Kenneth P. Green is resident scholar at the American Enterprise Institute. Both are members of the Mobility Choice Coalition.