Out of Control Policy Blog

Whoís getting subsidized?

In his latest Surface Transportation Newsletter (which will be on our home site soon), Bob Poole brings up the often-confused issue of transportation subsidies:

    I was on an hour-long NPR affiliate radio talk show on Amtrak last week, and was appalled to hear the director of a transportation think tank claim that highways and airlines get more federal subsidies than Amtrak. This was either unconscionable ignorance or deliberate deception.

    What many people do in such debates is a semantic sleight-of-hand. They equate the number of federal dollars spent with the amount of federal subsidy. What this ignores is that the users of airlines and highways pay user taxes that are restricted by law to paying for the infrastructure those transportation modes use. Amtrak users pay no such user taxes. The amount of federal subsidy is the difference between what a mode brings into the federal treasury in user fees/taxes and what the feds spend on that mode.

Bob points to this recent report, by the Bureau of Transportation Statistics, which finds that:

    On the basis of net federal subsidy per thousand passenger miles, Amtrak finished first, at $186 per thousand, over the 1990-2002 period. In second place was transit, at $118 per thousand. For highways overall, the comparable figure was minus $2–i.e, highway users paid in more than they got back. And in aviation, the airline subsidy was $6 per thousand, while general aviation's was $90 per thousand.

And on the basis of total dollar amounts of net federal subsidy:

    [U]rban transit got the most, averaging $5.1 billion a year (in 2000 dollars) during this time period. Airlines were second, averaging $1.9 billion a year (mostly for FAA safety-related costs covered by general fund appropriations). Amtrak was in third place, averaging just over $1 billion per year over this 13-year period. And over this same period, the highway system was a net provider of federal funds to the tune of $7.4 billion per year (though that's been trending downward since it peaked at $11.7 billion in 1998).

Ted Balaker is Producer


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