December 15, 2020 9:45AM

Another Bad Idea: Transit Parity

At least 33 members of Congress have signed onto a resolution calling for transit parity, by which they mean that the federal government should spend as much money on transit as it spends on highways. This is a terrible idea for several reasons.

First, transit carries 1 percent of all passenger travel in the United States and zero percent of freight. Highways carry 87 percent of passenger travel and almost 40 percent of freight. Moreover, despite receiving more than $10 billion in federal subsidies a year, transit ridership has declined for the last five years–a decline that seems to have been accelerated by the pandemic–while highway use was increasing. The pandemic has taught us just how vital highways are to the delivery of consumer goods to Americans, a lesson that transit‐​parity advocates seem to have forgotten.

Second, most of the money that Congress allocates to both transit and highways comes from the federal gasoline tax and other highway user fees. Transit advocates claim this is irrelevant because Congress has overspent the Highway Trust Fund and used $144 billion in general funds over the last 13 years (about $11 billion a year) to keep it solvent (about $105 billion of which went to highways while the rest went to transit).

What they don’t mention is that, since 1983, Congress effectively stole $154 billion of highway user fees from the Highway Not‐​So‐​Trustworthy Fund in order to fund transit programs. After adjusting for inflation, the amount taken from highway users for transit is almost double the amount of general funds spent on highways.

Not only has transit been heavily subsidized, those subsidies have made transit horribly inefficient, unable to innovate, and left it with crumbling infrastructure. Whereas worker productivity has increased in just about every other industry, transit worker productivity has declined by almost 60 percent since Congress began subsidizing transit in 1964. Since politicians prefer to spend money on glitzy new projects, the transit industry has spent hundreds of billions of dollars building obsolete rail transit project while it has allowed transit infrastructure to build up a $174 billion maintenance backlog.

The transit parity resolution erroneously states that “people with low incomes are also disproportionately reliant on public transit.” In fact, the reverse is true: people earning more than $75,000 a year are more likely to ride transit than people earning under $25,000 a year. But most of the taxes used to subsidize transit are regressive, meaning the 95 percent of low‐​income workers who don’t take transit to work are disproportionately paying to subsidize transit rides that are disproportionately taken by high‐​income workers. 

As bad as this idea is, it is the kind of transportation policy that we are likely to see come out of the Biden administration and a Democratically controlled Congress. For more reasons why transit parity is a bad idea and links to sources of the information given above, see my policy brief, Ten Reasons Why Transit Parity Is a Bad Idea.