Public Transit and the Funding Question

One of the long-standing criticisms that people who don’t ride transit have of transit programs is how farebox revenues represent such a small percentage (15% is unusually high) of the cost of providing the service.  There are reasons for this.  For one thing, until recently, the costs had to be very low to compete with the automobile. 

This raises an interesting question:  since there is now more of a financial incentive to shun the personal automobile due to the higher gas prices, wouldn’t it make sense to raise transit fares?  After all, buses run on fuel, too.  WIth more people demanding transit service, it should be possible to raise bus fares to offset a little more of the cost, or at least cover some of the rise in bus fuel costs.

This leads to the other school of transit philosophy:  that transit is there to serve the poor and elderly who can’t afford or maintain their own cars–and who, if bus fares were set at market rates, presumably couldn’t afford the bus fare either.   Thus, transit is deliberately offered at a tremendous subsidy.  Which all sounds very fine and noble, but…

a) if the funding crisis is making transit systems cut back on service and routes, how is that serving the poor and the elderly?

b) this assumes that there’s no mechanism for providing discount tickets to those genuinely in need.  After all, the government provides subsidized housing, but not to people who make six-figure incomes.

It’s also worth noting that a tremendous amount of transit funding is derived from taxes on driving–particularly fuel tax, allocated from the Highway Trust Fund via the Federal Transit Administration.  And it’s always tempting to raise money by imposing further burdens on driving…except that if people did actually drive less…and ride transit bus more…as is happening now… pffffftttt!!! goes your bus funding for current operations, never mind expansion to meet the increased demand.

Granted, we don’t want to raise rates so high that transit becomes uncompetitive again; but if we’re going to talk about sustainability, and if we’re really going to put all the cards on the table, maybe we should be rethinking some of this.


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