Throwback Thursday: Government Spending on Mass Transit Ballooned
From 1964 to 1984, the Urban Mass Transit Administration (now the Federal Transit Administration) spent $30 billion – over $86 billion in 2023 dollars – to finance costly and unsustainable mass transit systems.
Sen. William Proxmire, a Democrat from Wisconsin, awarded the transit agency his Golden Fleece Award in 1985 for this massive expenditure.
It all started in 1964, when President Lyndon B. Johnson signed the Urban Mass Transportation Act into law.
According to Proxmire, it started reasonably enough, with smaller appropriations of about $51 million to help mass transit systems grow and become more efficient. That would mean more people riding public transit, cleaner air, less energy consumption, and revitalized cities.
Unfortunately, that initial $50 million soon ballooned into $4 billion by 1984, with few tangible results. After the two decades of heavy investment, ridership declined, there were two energy crises, and costs rose steeply.
Ridership fell 29% from 1970 to 1980, while from 1965 to 1982, revenues per passenger decreased by 19 cents as costs increased 56 cents. Total taxpayer subsidy per rider went from 2 cents in 1965 to 27 cents in 1982. Clearly, this was not a sustainable business model.
Proxmire also points out the large opportunity cost of this investment. If the goal was to reduce total emissions, Proxmire cites a study that claimed energy could be saved and air pollution reduced more effectively by funding investments in making personal vehicles more efficient and less pollutive.
While there can be a place for government helping to provide low-cost public transportation, it should come from the local level, and should help close gaps in funding, not subsidize an increasingly unsustainable project.
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