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Cities deserve transit aid: It's only fair

Cities deserve transit aid: It's only fair
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The horse-trading has begun in earnest as Congress considers another coronavirus relief bill amid a precipitous rise in COVID-19 cases. Congress looks likely to take up in earnest a $908 billion bill to aid Americans through the harsh prospects of the winter. A major sticking point for Republicans had been aid to city and state governments. Notably, this includes a potential of more than $15 billion for mass transit systems, which have been hemorrhaging money and riders, and recently have proposed major service cutbacks and layoffs as a result of impending budget crises.

Notably, $15 billion falls well short of the $32 billion requested by the transit industry. Yet, the scope of the transit crisis is severe and requires immediate attention of any sort: In the nation’s capital alone, officials have proposed cuts that would eliminate weekend rail service, close 16 percent of stations, and lay off thousands of workers. Low-income households reliant on transit would be especially affected.

But why, for example, should Americans living in Dubuque, Iowa, be subsidizing a big-city transit system in San Francisco? One answer: to compensate for the decades Washington has provided assistance to the most inefficient transit systems in the country — those in small cities and rural areas, where costs are high and ridership low.

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It is certainly true that mass transit is predominantly urban. New York, Boston, Chicago, Los Angeles, Philadelphia and the San Francisco Bay Area account for some 5.5 billion of the 10 billion transit trips taken each year nationally. Until receiving emergency aid in the first CARES Act, these systems historically have relied on passenger fares and local or regional taxes. They allow the poor to get to work without owning a car; they reduce what otherwise would be choking traffic congestion; they help keep the air clean. They are arteries of urban life.

But the Federal Transit Administration, part of the U.S. Department of Transportation, is precluded from providing regular, ongoing operating system assistance for big-city transit, with a few exceptions. At the same time, its budget provides more than $600 million of such assistance to small city and rural systems whose efficiency — as measured by costs per passenger trip — is far less than urban areas.

In the biggest cities, transit is relatively efficient, notwithstanding high labor costs. Notably, in New York City, which accounts for a third of all public transit trips in the U.S. each year, costs per passenger trip average just $2.50; the equivalent figure for heavy rail (meaning subway) is just $1.93. In contrast, federal data show that in areas with populations of under 1 million, operating cost per trip is as high as an eye-popping $67.53.

In Oneida, N.Y. — which includes the city of Utica — each passenger trip costs the system $15.37. Oneida relies on Washington, D.C., for 20 percent of its operating transit budget. In Illinois, the Chicago Transit Authority incurs costs of $2.74 per trip on its famous elevated heavy rail system. The bus service in the western Illinois city of Rockford costs $8.08 — and relies on Washington for an equally high 11 percent of its budget, while Chicago relies on Washington for 0.5 percent of its operating budget. In California, the Bay Area Rapid Transit system serving San Francisco and Oakland provides its rail service at $5.04 per passenger ride. In the small town of Nevada City (population 3,068), the cost per bus trip is $15.04.

The challenges posed by the pandemic should turn this upside down. Today it is the big-city transit systems that need life support to avoid devastating cuts. Ridership on the D.C. Metro has fallen as much as 90 percent; in New York the decline is nearly as steep. New York and Boston transit systems already have floated what amount to doomsday cutbacks in service. In Boston, commuter rail and even ferries will be cut.

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Once the pandemic lifts, urban transit systems should examine their labor costs, which are often inflated by pension and other benefits that private-sector workers do not enjoy.

At the same time, small city and rural systems should consider what might be termed “Uber-izing” their systems. The private sector now offers on-demand pick-up that no one dreamed of until recently. In comparison to low-volume, fixed-route buses, costs, even if subsidized, would be lower. But at a time of crisis, we must provide a lifeline for urban transit systems. This time we’d be subsidizing the most efficient, rather than the least.

Howard Husock is an adjunct fellow at the American Enterprise Institute and the author of a report on mass transit financing.