This paper addresses the problems caused by increasing escalation of transit subsidies in the face of long-term trends that are worsening transit finances and focuses attention on two issues: (a) the relationship between changes in the level of federal subsidy funding and the financial condition of the transit industry and (b) the question of why the transit industry is incurring deficits. It is emphasized that a long-run federal operating subsidy program should concentrate on understanding and controlling the transit deficit. Possible solutions to the industry's problems are offered. At the federal level the alternatives available are to (a) move the power to determine the level of deficit from local authorities to the federal government by having national fare and service standards; (b) determine precisely what the federal subsidy is supposed to accomplish and focus the money directly toward these objectives rather than subsidize all transit service; (c) design the federal subsidy mechanism to encourage innovation and increased productivity; and (d) structure federal subsidy programs to increase fare box potential rather than penalize the fare box as a revenue source. Alternatives open at the state and local levels are to (a) penalize competitors to transit through taxes and controls; (b) encourage improvements in the productivity of transit in the off peak; (c) encourage more diversion of peak-hour transit demand to alternative modes; and (d) improve competitive advantage of transit through exclusive busways and lanes, priority in traffic, and other strategies.

Media Info

  • Media Type: Print
  • Features: References;
  • Pagination: pp 21-29
  • Monograph Title: Transit operating subsidies
  • Serial:

Subject/Index Terms

Filing Info

  • Accession Number: 00138142
  • Record Type: Publication
  • ISBN: 0309024862
  • Files: TRIS, TRB
  • Created Date: Sep 16 1981 12:00AM