We’ve written quite a bit in the past year about the issue of who subsidizes whom in transportation. Obviously, there must be a net cross-subsidy from one group of transportation users to another. In a recent paper, the Cato Institute’s Randal O’Toole leaves little room for doubt about the identities of these groups.
He observers that Americans spent $1.03 trillion buying, operating, repairing, and insuring automobiles in 2006. In exchange, they traveled 4.55 trillion passenger miles by car and light truck. That works out to about 22.5 cents per passenger mile. Domestic airline service costs about 13.1 cents per passenger mile. By comparison, Amtrak costs 56 cents per passenger mile, or more than four times the cost of flying, while urban transit service costs 85 cents per passenger mile, or more than three times the cost of driving.
So how do the government subsidy figures figure into this? O’Toole continues:
In 2006, Americans paid $93.6 billion in tolls, gas taxes, and other highway user fees. Of this amount $19.3 billion was diverted to mass transit and other non-highway activities. At the same time, various governments ? mainly local ? spent $44.5 billion in property, sales, and other [general fund] taxes on highways, roads, and streets. The net subsidy to highways was $25.1 billion, or about half a penny per passenger mile. As most airport costs are paid for out of airport landing fees, subsidies to air travel were even smaller: about 0.1 cent per passenger mile.
Transit carries only 1.5 percent of urban travel and Amtrak carries only 0.2 percent of intercity travel, yet transit and intercity rail require huge subsidies. In 2006, subsidies to Amtrak totaled just over $1 billion, or about 22 cents per passenger mile. This is more than 40 times the subsidies to driving. Subsidies to public transit totaled about 61 cents per passenger mile, or 120 times the subsidies to autos and highways.
I actually think O’Toole understates the differential a bit, because he treats the entire $25.1 billion expenditure of general-fund taxes (mostly property & sales) on the street grid as a cost of driving, when really a good chunk of that is for street, sidewalk, and signage infrastructure also used by pedestrians and transit riders.