Friday, April 29, 2011

How the Feds subsidize transportation

Per passenger mile, federal subsidies to Amtrak are 30 times greater than federal subsidies to airlines and 500 times greater than federal subsidies to intercity buses, according to a new study from the American Bus Association. The study also reports that federal subsidies per passenger mile to public transit are 3,200 times greater than federal subsidies to autos.

The report, written by economist Robert Damuth of Nathan Associates, compared federal outlays for each mode with excise taxes collected from highway users and air travelers. It also apportioned costs to users such as auto drivers, intercity buses, and commercial airlines.

For example, the study found that federal expenditures on air travel between 2002 and 2009 averaged about $19 billion a year (p. 7), and it cited a Federal Aviation Administration report attributing about 70 percent of that cost to commercial air passengers (p. 12). The study also found that various taxes collected from air travelers averaged about $9 billion a year (p. 14), for a net subsidy of about $4.5 billion a year (p. 24).

A summary of the report compares subsidies per trip. But no one has estimated trip numbers for autos, and it doesn’t seem fair to compare transit trips, which average about 5 miles, with Amtrak and airline trips, which average hundreds of miles.

Fortunately, the full report also calculates subsidies per passenger mile. From 2002-2009, the report says, federal subsidies per passenger mile to air travel averaged 0.8 cents; to autos averaged 0.006 cents; to intercity buses averaged 0.05 cents; to Amtrak averaged 25.4 cents; and to urban transit averaged 19.3 cents. The federal subsidy to highways was actually negative (meaning highway users paid more than highway costs) until 2001, and turned positive mainly because Congress made spending mandatory regardless of revenues (a policy that was corrected this year).

Despite these highway subsidies, subsidies to autos are tiny, the report says, because auto drivers pay about two-thirds of the revenues into the Highway Trust Fund (p. 16) but only impose about 60 percent of the costs (p. 12). Even then, the report erred in counting only passenger car passenger miles, ignoring light trucks (pickups, SUVs, and full-sized vans). Adding these passenger miles would reduce the subsidy per passenger mile by 40 percent...

The rest of the article is here.

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