We need to find a better model for funding transit

I'll start with one of those stupidly-obvious statements that too often need repeating: Cities, especially larger cities and metro areas, need quality public transportation. They're a fundamental backbone for success. For distances that reach beyond what is walkable or bike able, people need good options.

As a longtime advocate for better transit, it's been frustrating to even have to make those simple statements. But in the world of transportation funding, where road projects go un-questioned no matter how large, people who know the benefits of transit have to fight hard for every scrap. It's been a terrible struggle in all but a few cities in this country. And, it's not getting much easier.

In recent weeks, two separate pieces take a look at the current funding issues with transit, and both are alarming in their own ways. Eric Jaffe notes the widening disparity in revenues vs expenses for large transit agencies:

The reason local agencies seem to need so many fare increases is that they do a poor job keeping the price of taking a ride near the cost of providing it. Just how poor a job comes through in a new data-filled report from the U.S. Department of Transportation on the state of American transport.

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And so we see an ever-widening gap between what the biggest transit agencies spend running their service and what they recover from riders. (Here we're talking about day-to-day or "operational" expenses; capital expenses, used for infrastructure and equipment, are considered separate.) In 2000, the top agencies recovered nearly 40 percent of their costs through fares. That figure has since dipped below 37 percent.

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Again, there are many reasons why fares don't keep pace with costs. As a general rule, U.S. agencies keep fares low on purpose to provide affordable transit as a public service, relying on subsidies for funding help. In other words, agencies don't expect to eliminate the gap. But until they do a better job minimizing it — coming somewhere closer to ajar than to gaping — you can expect another fare hike coming your way soon.

Adding to that news, Yonah Freemark writes about the challenges of first-generation light rail systems in the US:

Based on the decisions to build these projects, which were made by hundreds of local officials and often endorsed by residents through referenda, you might think that the experience building light rail in the 1980s had been unambiguously successful. Yet it doesn't take much digging to find that over the past thirty years, these initial five systems in themselves neither rescued the center cities of their respective regions nor resulted in higher transit use — the dual goals of those first-generation lines.

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The light rail lines have been useful in transporting a large portion of transit ridership in the regions where they have been built, carrying more than 39 percent of riders in Portland, Sacramento, and San Diego. But while light rail may appear to make the public transportation system more appealing to the average rider, the construction of such a system will not automatically result in increased transit use. The data from 30 years' experience with the mode in the United States — certainly enough time for the demographic or real estate changes that are usually expected to parallel new rail investments — make that very clear.

Now, I think it's too soon to analyze these light rail systems, since land use patterns are the real problem and those take many years to change. But it does leave transit advocates on the defensive. Always asking for more money, especially from the federal level, is not very smart poker.

I'm concerned about the future of transit (and frankly all transportation) funding. My thinking proceeds below.

We're going to be facing increasingly difficult funding limits at the federal, state and local levels for all government expenditures in coming years. Our combined public obligations are crushing, and the public (for the most part) does not have an appetite to keep raising taxes.

Back in the day, most public transportation systems were the only systems, beyond walking or biking. As a result, they had an enormous ridership base that could more than cover the cost of the system. In fact, nearly all transit systems were privately-owned and for-profit.

Of course that all changed when the car culture came into being. Whether you believe in the conspiracy theory that big auto dismantled streetcar systems in a nefarious plot; or if you're like me and you think it was probably inevitable given the public's appetite for cars, a giant country well-suited to spreading out and a penchant for newness; regardless it doesn't matter. The past is the past, and we now have to live with what is on the ground today.

One obvious reason that firebox recovery is so low is that nearly every city in the country just doesn't have enough population density near bus and rail lines and enough destinations that are easy, accessible and enjoyable. 

My concern is that we need public transit - all of us. Even if you never use it, you need it. People need it to live a full and complete life without car ownership, and transit does keep more cars off of the road. 

But the financial equation has to work. I'm fearful that the era of public subsidies for transit is about to end - it will get squeezed in numerous political battles from coast to coast.

I do not think planners & transportation planners should be afraid of bottom-line economics. I fully understand that roadway infrastructure is subsidized in this country, and transit provision faces unfair criticism by comparison. But the excuses are far too many, and the reliance on dollars from federal and state sources far too common. With mobile technology and a little creativity, we should be able to find better models that pencil out. If not, we may face a situation where much of transit as we know it will succumb to future financial pressures.

So what's the economic model, then? 

I don't have THE answer, and doubt anyone who claims they do. But a debate of ideas is long past due. One obvious approach is that transit should employ variable pricing for fares, in some instances charging much more for premium services and making the bottom-end free.

But that doesn't likely go far enough - a re-evaluation of means and methods needs to happen. One more radical approach - why not handle public transportation funding like we fund food assistance? That is - provide assistance to those who need income support via a card system like EBT, but insist that regular operations be for-profit and tailored to all customers. Today, most bus agencies essentially operate as social service providers, with systems designed primarily for those that lack transportation. That's been the mission handed down to them since transit largely became a pseudo-municipal function decades ago.

I'm suggesting we turn that in it's head. Design public transport to meet the needs of middle-class consumers first and foremost with a wide variety of price points and vehicle types. Then, provide direct financial assistance to those who can't afford the service but still need it.

The federal, state and local governments don't operate restaurants or grocery stores that are the only providers for the needy; we'd think that absurd. So why do we treat transportation differently? Many transportation operators may technically be independent agencies, but they rely on public funding from all levels in order to survive. What if we simply set a goal for that to not be the case, and got creative with solutions?

Again - I think we need the debate. The pressures will soon be upon us to make changes, at the same time the need is growing. And, the current setup is a money loser while providing services that serve relatively few people well. This one idea might not be workable, but as a transit advocate I think it's also a fundamental flaw that federal and state monies are constantly needed to provide local operations.