Advocates of mass transit like to point out that it isn't the only form of transportation that gets public subsidies. In particular, road construction and maintenance have benefited from increased taxpayer subsidies over the last decade and a half. But road subsidies remain a small component of that spending and are hardly the key factor that is making transit uncompetitive. Government subsidizes mass transit much more heavily than it subsidizes driving.
The mass-transit backers say, correctly, that the federal gasoline tax hasn't been increased since 1993; since then, inflation has reduced its real value by about one-third. The same holds for some states' gas taxes, though other states index their levies to inflation. The states and the feds, therefore, both have less revenue from gas taxes, meaning they're forced to increase the amount of general revenue -- which comes from everybody, not just drivers, and thus constitutes a subsidy -- dedicated to road construction and maintenance.
Smart-growth groups like 1000 Friends of Wisconsin aren't wrong, then, when they remind their state's taxpayers that "between 41 and 55 percent of [Wisconsin's] road money comes from non-users." In Wisconsin, Streetsblog notes, "Non-users fork over $779 per household for roads--as opposed to $50 for transit."
But while the road subsidy is larger than the transit subsidy in dollar terms, the transit subsidy is much larger as a percentage of the cost of transportation. Wisconsin residents, like state residents elsewhere, consume far more auto travel than transit travel. For example, 65 percent of the budget of the Milwaukee County Transit System, Wisconsin's largest, was covered by subsidies from federal, state and local governments in 2010. Madison's public transit system got a whopping 74 percent of its budget from subsidies that year. Those figures are both higher than the 41 to 55 percent of road spending that, according to 1000 Friends, comes from subsidies.
More important is that the 41-to-55 percent figure is misleading: It refers only to the cost of roads, not to the total cost of driving. That total cost includes not only public spending on roads but also a host of private purchases -- of cars themselves, maintenance, gas and insurance. In 2008, Americans spent $500 billion on motor fuel (not counting the excise tax) and $173 billion on new cars (not counting taxes and fees). Also, according to figures derived from the Bureau of Labor Statistics' Consumer Expenditure Survey, American households spent $223 billion on vehicle maintenance, repairs and insurance. As for highway construction and maintenance, governments at all levels spent $181 billion on them, of which nearly $98 billion came from taxes and fees paid by drivers and the remainder, $83 billion, from general revenues.
All told, then, $1.08 trillion was spent on road travel, with government subsidies providing only $83 billion of the total. That's a subsidy of less than 8 percent. Even if you add the implicit subsidy from excluding gasoline from general sales taxes, you push the percentage to just over 10 percent. No transit system in North America operates on a subsidy that small.
If you ended road subsidies, people would drive less -- but probably not much less. Gasoline prices would go up by about 50 to 60 cents a gallon, but over the last decade, fuel prices rose more sharply than that without triggering any major change in our transportation practices.
That's because the real culprit keeping Americans away from mass transit and inside cars isn't subsidies; it's planning and zoning. Cities impose barriers to density that limit the number of housing units and offices that can be located near buses and trains, which reduces mass-transit usage.
Transit advocates aren't incorrect when they grumble about road subsidies. But if they want American mass transit to work better, they're missing the key target. A much smarter approach would be three-pronged: reduce subsidies, allow looser urban zoning and get transit costs down.