Policy Study

Rethinking Transit “Dollars and Sense”

Unearthing the True Cost of Public Transit

Executive Summary

The Campaign for Efficient Passenger Transportation’s 1997 report entitled Dollars and Sense: The Economic Case for Public Transportation in America purports to go “beyond the rhetoric to look at the facts.” A careful examination of their report, though, reveals that the facts do not support the rhetoric of the document.

According to Dollars and Sense, transit ridership is growing. The reality is that transit ridership has been declining for five decades. It peaked in 1945 at 23 billion passenger trips and a 30 percent share of urban travel. Transit’s share fell to 19 percent in 1955, 11 percent in 1965, six percent in 1975, and five percent in 1985. More recently, trips have been in the 7 billion range for an urban travel share of around 3 percent.

According to Dollars and Sense, riders, motorists, businesses, and taxpayers are receiving a “handsome” return-on-investment from public transit. The data say otherwise:

  • Riders must pay higher fares because transit operating costs have risen almost four times faster than inflation over the past 30 years.
  • In every case, the motorist’s benefits from public transit cited in the Dollars and Sense report are smaller than the taxes they must pay to obtain these benefits.
  • Taxpayers’ “investment” in public transit has been rewarded with steadily deteriorating performance: the deficits have gotten larger, there are fewer passengers per dollar spent and fewer per vehicle mile.
  • The funds spent on public transit could have generated an additional capital stock of $400 billion and supported an additional seven million jobs if business tax cuts had been implemented instead of transit subsidies over the last 30 years.

According to Dollars and Sense, increasing spending on transit would improve traffic safety, enhance mobility for the poor, and provide a more equitable allocation of government spending on transportation. The data say otherwise:

  • Transit vehicles have higher fatality rates per vehicle mile of travel than automobiles.
  • The overwhelming majority of the poor use modes other than transit to get to work.
  • On a per passenger mile basis, transit already receives 20 times as much government spending as highways.

According to Dollars and Sense, the people are choosing transit. Local government officials may be eager to spend more money on transit. Voters, though, when given a choice, are turning down transit initiatives 80-90 percent of the time.