A new report shows that New York is getting a large number of dollars in the form of transportation subsidies, but instead of getting the goods and services they need, state governments are foregoing taking advantage of the subsidies and moving to using them for more environmentally friendly initiatives.
The new report was released by the Institute for Policy Studies, an advocacy organization for policies in the transportation, transit, and energy industries, and concludes that NYC only gets about $500 million a year in transportation subsidies, rather than what cities like Houston, Miami, and Los Angeles receive on a per capita basis. And according to Bloomberg, as much as one-fifth of the city’s transportation subsidies is diverted to money they can’t spend to fix its roads and bridges.
In one way, it makes sense to think that the subsidies are wasted. In any given year, there are tens of thousands of vehicles in use that don’t have to do a thing—just drive around and wait, and the world over, this is good for the environment because drivers generate emissions; indeed, environmental policies help reduce greenhouse gas emissions while making our cities cleaner and more livable. But the fact that every city has private transportation subsidies that are less than useful—now as now, New York has moved away from them for convenience—makes them less useful.
In Los Angeles, for example, 40 percent of taxpayers financed their own transit, and the city has become a leader in buying private transit from state and national companies instead of relying solely on taxpayers’ private financing. In New York, transportation taxpayers are setting up companies that pay for bus, subway, and bicycle rides to various public facilities, instead of paying them a per capita subsidy. By contrast, in Los Angeles there is almost nothing — fewer than 15 percent of taxpayer subsidies go to roads and bridges.
What’s interesting about this happens is that private investment in privately financed transportation is more efficient than public transportation. State and federal policies generally punish and cut subsidies, but to reduce congestion, improve efficiency, or improve health, private sector funds are essential. In New York, the concentration of private subsidy is “worse than that experienced by public transportation in the developed world.” The report notes that the government-funded option has to compete against public sector alternatives that are either too expensive or too inefficient.
In some cities, including New York, the use of private entities—private vehicles, private transport hubs, companies that offer transportation services—help solve congestion. But for most cities, the transportation subsidy issue is a budget issue, and some municipalities are caving in to the former, as in Milwaukee, Chicago, and Cleveland. As Vinton Carle, chairman of the Institute for Policy Studies, writes, “As you look around the world and see how transit is owned by government, you get the message: governments just can’t win.” The economics are backward for government agencies—government subsidies are no good for any of the many projects and problems the city must address.
It’s true that, overall, New York is leading the way in making investment in alternatives to transportation subsidies. But cities don’t run on short-term incentives—they need longer-term solutions. Yet the latest batch of reports from the Institute for Policy Studies shows that the cost of this short-term mentality is costing us much more than we realize.
If all cities and state governments were more realistic in their outlooks and budgets, then we would see a massive reduction in public subsidies for transportation, and cities and states could devote more money to what, in their shortsighted economic incentives, they really need to do—build new infrastructure and transport solutions—to get people around while producing livable cities, jobs, and improved quality of life.