MDOT Subsidy Numbers Off Track

Amtrak passengers should pay their full share

Last month, I wrote an op-ed that argued against state subsidies for Amtrak. In that piece, I estimated that this year Michigan taxpayers will give Amtrak passengers at least $49.51 (and maybe as high as $98.11) per roundtrip. The Michigan Department of Transportation took issue with these figures, and claims that the real subsidy cost is only $29.94 per passenger.

The fundamental difference between these figures is the denominator — MDOT chooses to express the subsidy per “passenger trip,” whereas I believe it more appropriate to calculate the subsidy per “passenger roundtrip.” Expressing the subsidy in terms of its effect on passenger roundtrips is a more realistic and intuitive metric when analyzing mass transit subsidies, because the vast majority of passengers have both an outgoing and a homecoming trip — there are relatively few instances when a person travels somewhere and never returns.

This roundtrip-based perspective is reflected in the individual’s decision of when and how to travel, which incorporates the combined travel cost of both trips. Additionally, since most tickets are purchased as roundtrip tickets, the subsidy per passenger roundtrip provides a better understanding of how much each ticket is underwritten by Michigan taxpayers.

Focusing solely on the number of passenger trips misses the larger picture of how individuals actually use taxpayer-subsidized travel. The individual, not the trip, is at the heart of the matter when government subsidizes travel, because an important part of public policy is the question of whom taxpayers are subsidizing and to what extent.

It does not matter from the transportation planner’s point of view whether 1,000 people each travel once, 500 people travel twice or 100 people travel 10 times each. In terms of public policy, however, it certainly does matters whether taxpayers are subsidizing 1,000 people a small amount, 500 people slightly more, or 100 people to a much larger degree. Therefore, the appropriate manner to speak of taxpayer subsidy of mass transit is in terms of passenger roundtrips, since each passenger using publicly subsidized mass transit benefits from the travel subsidy on both their outgoing and homecoming trip.

Regardless of how one chooses to calculate these figures, the subsidy of passenger rail at the expense of state taxpayers is something that should end. It is fundamentally unfair to force some taxpayers to subsidize the private transportation choices of others. The solution is simple: end state subsidies of passenger rail and let train passengers pay their full share.