Mass Transit's Uncertain Future

Report Outline
EN Route to Boom or Bust
Transit's Financial Dilemma
Turning to Private Sector
Special Focus

EN Route to Boom or Bust

Optimism Colluded by Serious Problems

Public mass transit in America appears at first glance to be a thriving industry. A brand new light-rail system in Buffalo, running right down the middle of a Main Street mall before heading underground, officially opened in May. Shiny new heavy-rail lines are just over a year old in Miami and Baltimore. Rail systems are under construction in Sacramento and Santa Clara County, Calif., and Portland, Ore., and are on the drawing boards in several other places. In other localities bus fleets are being expanded. A large constituency supports mass transit as an integral part of daily urban life.

But underlying the optimism of mass transit's advocates are serious problems that threaten the viability of the public authorities that run more than 90 percent of the nation's transit systems. Even after modest growth spurred by route expansion and the energy crises of the late 1970s, ridership remains far below the historic highs set 40 years ago. Soaring labor and other operating costs, the dispersion of population and jobs from urban cores to sprawling suburbs, unprofitable route extensions, the American “car culture,” and legal or political restraints on fare increases have combined to make public transportation a money-losing proposition that requires huge government subsidies to stay solvent.

While many riders think that their fares pay the full cost of the service, fare-box receipts actually cover less than half of what it costs to run the nation's mass transit systems. State and local subsidies make up most of the difference, but the federal government has played a growing role. Since the establishment of the Urban Mass Transit Administration (UMTA) in 1965, federal aid to mass transit has totaled $43 billion for operating expenses, construction of new lines and transit-ways, rehabilitation of run-down facilities and the purchase of new vehicles.