Program: Bus transit division (Section 116)
Special Revenue Funds:
appropriation funds subsidies of up to 50 percent of the operating expenses
incurred by local public transit systems in urban areas, and up to 60 percent of
expenses in communities with populations below 200,000. Funds can be used for
both operating and capital expenses in non-urban areas.
This program should be
eliminated. Public transit programs are the most expensive way to move people
from one point to another. They require substantial operating and capital
subsidies to remain financially viable in serving their tiny share of the
market. According to the 2000 decennial census, only 4.57 percent of commuters
use public transit to get to work, down from 5.12 percent in 1990. Despite
subsidies totaling a half a trillion dollars since 1960, public transit use in
America has declined year after year for at least the last four decades. As low
as the national share for public transit is, Michigan’s is even lower. In the
Detroit metropolitan area, only 1.82 percent of commuters used public transit,
while only 0.82 percent of commuters used public transit in the Grand Rapids
metropolitan area. These compare to 7.43 percent for all metropolitan areas.
Compounding the problem of low use
is high cost. As public monopolies protected from private-sector competition,
public transit systems have little incentive to economize, and the consequence
is high operating costs. Public transit absorbs 20 percent of all federal
transportation spending while carrying less than 5 percent of commuters to work.
State public transit subsidies could be terminated and cities required to
operate their own systems on a break-even basis by reducing costs and increasing
revenues. Costs could be reduced by renegotiating labor contracts, dropping
underused routes, contracting existing services to more efficient providers, and
allowing qualified private operators to compete for passengers. At the same
time, fares could be set to cover newly reduced operating costs.