ECONOMICS OF URBAN TRANSIT CAPITAL GRANTS

Four arguments support the restriction of federal grants to public transit: The transit industry is "capital poor"; a capital grant restricts the power of transit unions to dissipate most of the grant through wage gains; a capital grant limits the federal government's liability by avoiding an open-ended commitment such as an operating subsidy support for labor costs; and a capital grant is a highly visible means of showing federal concern for transit. Each of these arguments is shown to be without merit. The uneconomic incentives inherent in a capital subsidy suggest that, if the arguments for a federal subsidy to transit operations are accepted, the funds should be allocated as a generalized subsidy to transit service rather than restricted to capital expenses.

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    • Sponsored by Committee on Transportation Systems Planning and Administration. Distribution, posting, or copying of this PDF is strictly prohibited without written permission of the Transportation Research Board of the National Academy of Sciences. Unless otherwise indicated, all materials in this PDF are copyrighted by the National Academy of Sciences. Copyright © National Academy of Sciences. All rights reserved
  • Authors:
    • Tye, William B
  • Conference:
  • Publication Date: 1973

Media Info

  • Media Type: Print
  • Features: References;
  • Pagination: pp 30-35
  • Monograph Title: Price-subsidy issues in urban transportation
  • Serial:

Subject/Index Terms

Filing Info

  • Accession Number: 00054690
  • Record Type: Publication
  • ISBN: 0309022614
  • Files: TRIS, TRB
  • Created Date: Jun 24 1981 12:00AM