Monday, October 3, 2011

Subsidizing suburbs

The new Atlantic Cities page has lead me to a debate surrounding a recent blog post by University of Minnesota Professor David Levinson. Levinson argues that the we ought to evaluate which public transit routes are profitable and which lose money and use the results to make decisions about which routes to keep and which to drop:
Mass (or public) transit agencies are transportation organizations first, not welfare organizations. They should be considered public utilities rather than departments of government, which provide a useful service for a price to their users.

My thesis is that the local transit systems should identify and propose to retrench to the financially sustainable system, and present local politicians with a choice.

If local politicians want additional "equity" services, they should be presented with a cost of subsidy per line, and then can collectively choose which lines to finance out of general revenue, as this is primarily a welfare rather than an transportation function.
There are a few obvious criticisms of this point of view. First, a lot of government services don't make money (like the army). They are maintained by taxpayer dollars because we perceive them to be beneficial to our society. We aren't in the midst of a giant fiscal deficit because of an underutilized bus route. Second, there are clear environmental reasons to subsidize mass transit. Third, as pointed out by Jarett Walker in response to Levinson:
I'd like to see this as well in a perfect world. But that would be a world in which government isn't heavily subsidizing transit's competitor, the private car -- not just through road expenditures but through such interventions as minimum parking requirements and petroleum-based foreign policy.
I think what is interesting is the way the debate is framed by Walker. He argues that the government is subsidizing two competing methods of transit (the car and public transit). The way I see it the government is actually subsidizing people traveling from the suburbs into the city on a day-to-day basis. In a sense this is a giant subsidization of sprawl.

If we took Levinson's theory and also applied it to paying for road work and new roads (you charge people to use roads and charge them more for roads that are less frequently used, a sort of reverse-congestion tax) you would incentivize people living more densely and closer to their jobs. It would also make it more difficult for businesses to move out to the suburbs because it would be more expensive for employees to get to work every day, thus increasing centralization and creating the opportunity for more effective and financially sustainable public transit service.

Another thing that I would add is that most of the critics of Levinson seem to assume that the underused and unprofitable buses are located in poorer areas. I have no evidence to back this up but my guess is that the buses in the poorer areas are actually the most profitable because poorer people tend to not own cars and thus use the bus to get to work. It is in the wealthier suburbs, where most people own and use cars, that you find underused bus routes.

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