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transportation funding

Should Transit Be Free?

Also, auto user fees don't even pay the full construction and maintenance costs of roads (this statement probably wouldn't have fit on her back).

I stumbled on a blog the other day which asked a question I never really considered. I began to dig around and found a whole underground network of free transit advocates. Several cities around the world have abolished transit fares, usually with substantial ridership increases as a result. The fare free transit arguments are:

  • Reduction in operating costs (fare collectors, payment system terminals would be abolished)
  • Increased ridership
  • Broader demographic groups would ride because of convenience and low barriers to entry
  • The environmental, social and health benefits (positive externalities) of each new transit rider would more than compensate for lost fare box revenue
  • More political power/representation due to massive increases in ridership

Most fare free systems in the U.S. are on college campuses or downtown areas. Some of these systems are pretty comprehensive, like the Clemson Area Transit System in South Carolina. Entire cities have also gone fare-less like Hasselt, Belgium and Changning City, China.

This goes back to how we subsidize transportation. It’s well known that user fees (car registration fees, gas tax, etc) don’t cover the construction and maintenance costs of roads.  These funding gaps are filled by general obligation money- revenue from property taxes and such. Should we expect transit to exceed the financial standards we set for highways? Is having transit fare box revenue targets a worthwhile goal considering the personal and environmental benefits transit riders accrue?

We tend to treat highways as public goods and transit as a private commodity. Closing highways because there’s no money in the budget to maintain them is unheard of. Cutting transit service is done all the time – just look at Charlotte and Atlanta lately.  John Grooms at Creative Loafing had this to say about transit as a public good:

During bad economic times, local government still provides police protection and garbage pickup, and it still purifies and delivers water. And so it should be with public transportation. No transit system anywhere pays for itself, nor should it be expected to. Public transportation isn’t a business venture that’s obliged to turn a profit; it’s an essential service, one of those things, like the fire department, that falls into the category of communal responsibilities, something we owe and provide each other as fellow citizens.

Why your transit system sucks (from US PIRG Report "A Better Way To Go").

Fare free transit systems obviously require more funding to cover operations – but not that much more. The best systems – NYC and DC, have an average fare box recovery of 60%. Most transit systems only collect enough from fares to cover 30%-40% of their operation costs.

And when you compare collective capital spending on highways vs. transit (take, for example, Metropolitan Washington Transportation Planning Board’s $3 billion 270 widening project which slipped into their long range plan with little public input), highways have been the target of enormous federal, state and local money. My point is that subsidizing low cost or even free transit is orders of magnitude less expensive than what we spend on highways, while resulting in much greater benefits to users and society.

Given how tenuous funding is for transit systems all over the U.S., an argument for or against fare-less systems can quickly snowball into a “how do we find reliable money for transit” thesis. I’ll stop this post before it gets to that. Free transit does have huge benefits, but unfortunately most of these benefits are not easily represented on a spreadsheet. The Better Way To Go report from U.S. PIRG tries, though.