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Montana Transit – Harmful to Taxpayers, Environment

Submitted by: Ken Miller,
Original Source: Big Sky Journal, Aug. 5, 2010

We’re often told that public buses are the most cost effective and energy efficient means of transportation available. But a recent MPI (Montana Policy Institute) study found that this perception doesn’t hold true in rural states like Montana.

When compared to driving private automobiles, public transit in Montana costs more and takes a greater toll on the environment per passenger mile than does driving that same mile in a private vehicle – even when comparing to SUVs or light trucks.

In addition, high subsidies on public transit systems siphon away nearly half of Montana’s gas taxes that would otherwise be available to build, improve or maintain our public roads. These subsidies support a system that Montanans use to fulfill far less than 10 percent of our travel needs, despite the fact that it’s cheap or even “free” to the rider.

The cost per passenger mile of driving in Montana is substantially lower than that of public transit, and is mostly borne by the person doing the driving. Contrary to popular belief, there are few federal or state subsidies to highways. Since 1956, almost all federal highway funds have come from federal gas taxes and other user fees. In fact, nearly half of Montana’s state gas taxes are diverted to mass transit and other non-highway purposes. To the extent that subsidies do exist, local governments are the primary source.

The average cost of driving in Montana-including subsidies -is a little under 23 cents per passenger mile, or about a penny above the national average. The average cost of public transit in Montana, meanwhile, is about $1.76 per passenger mile, with more than 90 percent of that cost subsidized by non-transit users.

Using a different measure, Montana transit riders pay an average of less than 40 cents each time they board a bus, while taxpayers kick in an average of more than $5 to support each of those trips.

The report states that most transit agencies do not even pretend to try to cover their operating costs, much less their capital costs, with passenger fares. It points out that the Bozeman “Streamline” transit system does not even charge fares. Transit agencies in Billings, Bozeman, Great Falls, and Missoula spent nearly $8.9 million operating buses in 2008, but collected less than $800,000 in fares. Including capital costs, losses exceeded $10 million, of which fares covered just nine percent of Missoula’s transit costs, and less than eight percent of Billings’ and Great Falls’ costs.

Public transit also takes a heavy toll on the environment. Montana’s urban buses use on average twice the energy and release more than twice the carbon emissions into the atmosphere per passenger mile as a light truck. A Toyota Prius would be nearly 6 times more efficient.

The major problem is that urban buses in Montana run mostly empty, filling just one-sixth of their seats. Bus systems in larger cities nationally are much more efficient per passenger mile for the obvious reason that they carry more passengers per mile. As a high mileage, low population state, we have to decide if we want to spend and pollute more by promoting an ill-suited policy “solution,” or if maybe we should look at other options.

It’s quite clear that Montanans who are concerned about either public expenditures or climate change and air pollution should be looking for alternatives to traditional urban transit models that rely on buses and scheduled routes to move people around. The question is whether we impose a solution by forcing more people to ride buses, or whether we seek choices that take into account local conditions while still meeting the needs of those who want or need public transportation.

There are many options available to help decrease the costs and environmental impacts of public transit in Montana. Removing state and federal government bias toward high cost, high emissions vehicles that run scheduled routes regardless of demand and allowing communities to tailor their transit programs to local conditions should be one of the first steps toward creating more cost effective and environmentally friendly systems. Other options include smaller vehicles or shared on-demand taxis, privatization, and vouchers for those who need assistance. These types of systems would take people where they want to go when they want to get there at much less cost and with a much lower environmental impact. In short, cities need to decide if they’re in the business of moving people or of running buses.

One of the major obstacles to change, according to the report, is that Congress has, intentionally or not, given transit agencies incentives to choose high-cost forms of transit. Once these incentives are changed, it will be easier for transit agencies to adopt better policies.

One of those policies might be to use smaller vehicles, more of which can serve more routes providing more frequent trips, better meeting the needs of their customers. The average Montana transit bus has 31 seats, yet carries an average of less than four people.

Another option might be to hire private companies to operate buses and other transit vehicles, a practice that can save taxpayers millions of dollars, and allow resources to be spread further. The report cites a case in Denver, which contracts out half of its bus services, and it pays only 52 percent as much per vehicle mile for the contracted service as it spends on buses it operates itself. The main obstacle, according to the report, to contracting out services is generally union opposition, even though some contracting companies are unionized and pay scales are comparable.

Opening the market to the robust competition of jitneys has proven highly successful in many communities. Best described as a shared taxi, a form of jitney service is offered in a limited way by the shuttle services provided by hotels and motels to the airport. Opening up urban areas to competitive jitney services would allow more people to take advantage of door-to-door or near-door-to-door services at a lower cost than taxis. Usually the main opponents of such options are market-protected taxi companies, but they could in fact become major jitney operators.

Transit agencies could take the ultimate step of selling their assets to private operators, restoring the system that prevailed in most American cities before Congress gave cities incentives to take over private transit companies in 1964. The private operators would have incentives to find the optimal sized vehicle for each route and to run transit where people want to use it, not in every suburb that pays taxes to the transit agency. The United States still has a few private transit services that operate largely without subsidies, including the Atlantic City Jitney Association, New York Waterway, and publicos (jitneys) in Puerto Rico.

For the relatively rare situation in which people do not have access to their own automobiles (95 percent of the people in the state own a vehicle) a voucher system would be a more efficient means of subsidizing their transportation needs. State and local governments could give transportation vouchers/stamps to people who need assistance, which could be applied to any kind of public conveyance.


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