should u.s. federal transit spending aim to redistribute wealth? (guest post by alexis grant)

Alexis Grant holds an M. Sc in Speech and Language Processing from the University of Edinburgh and is an active transportation advocate in Portland, Oregon. She enjoys shaping and interpreting complex systems for the benefit of their users and riding her bike around Portland. You can find her on Twitter @lyspeth.


Should the goal of US Federal transit spending be
the redistribution of wealth?

The Transport Politic’s Yonah Freemark recently examined data from the 65 largest American metropolitan areas to
provide a deeper look at his assertion that local funding for transit
operations tends to depend on local income rather than on ‘need’, magnifying
“seriously inequitable outcomes”:

The
data demonstrate that increasing local and state transit operations spending is
closely correlated with metro area median household income.
This is not the case for federal aid, as minimal as it is. In addition, though
cities and states with more progressive electoral tendencies appear to be able
to increase local funding for transit operations, that contribution may be
significantly limited by the incomes of local inhabitants.

Freemark
argues that this is problematic: “Since public transportation is a vital social
service, this has the perverse impact of providing the least support to the
regions that likely need it most."

When I
first read this line, I paused over “vital social service”, wondering whether
he meant “vital public service”, but the article as well as his prior coverage of
the topic
makes
clear that he meant just what he said: here, transit is being depicted as a
social service provided to people who can’t afford other ways of getting
mobility:

If
public transportation is an essential social service — almost as important to
our society as Medicare or Medicaid or Social Security (that is what we think,
right?) — then how is it fair for the people who live in the poorest
metropolitan areas to suffer from inadequate transportation services?

Freemark
seems to be advocating here for addressing a perceived inequity that relates to
only one of the two common goals of transit: what Jarrett Walker calls the
Coverage Goal (Human Transit, Chapter 10).

The
Coverage Goal reflects the “social service objective” that Freemark is
appealing to, “meeting the needs of people who are especially reliant on
transit”, in this case primarily due to lack of wealth, or poverty. When aiming
for high coverage, agencies provide service broadly, including to those who may
be difficult to serve because of poor connectivity or low density but also need the service more.

The other
major goal, the Ridership Goal, reflects the desire to provide efficient and
effective service by serving the most people at the least cost. Services
oriented to the Ridership Goal focus on important
destinations and corridors
and may separate services or stops by larger distances to speed travel
and avoid overspending on overlapping service.

While
Walker discusses the Ridership-Coverage tradeoff mostly in the context of local
decision-making, the same idea can be applied to state or federal funding.  Federal funding can pursue an ideal of maximum
ridership; that would mean lots of money for big cities, where ridership
potential is high, and none for Wyoming. 
Or, it can focus on spreading out the resource, pursuing a Coverage
goal, based either on a political ideal of equity or, as Freemark proposes, an
explicitly redistributive view that spends more in poorer communities.

Freemark
positions his work in contrast to academics and commentators profiled by Eric Jaffe
at The Atlantic
,
who argue “too many projects…are poorly designed or executed, in part because
of federal sway”. He pictures the redistributive power of the federal
government as a positive force necessary to overcome the inability of some
local governments to raise the amount of funds their areas ‘need’ to meet their
presumed Coverage goals. Yet his vision of how this would make for “better
projects” only asserts that it would be more fair.

Cities,
left to their own devices, will restrict funding on transit operations based on
the income of their inhabitants, not based on need. It is not rational that the
state and local funding for transit in San Jose is more than six times higher
than that in Fresno, just 150 miles apart, much because of the latter’s
significantly lower household incomes and more Republican voting tendencies.
Fresno, after all, has more than double the poverty rate of San Jose and thus
has a significant transit-dependent population that is not being appropriately
served….

To
dismiss the federal government’s role is to ignore its important redistributive
powers — its ability to transfer tax revenues from wealthier regions to poorer
ones to help contribute to a more just society.

Coverage
and equity goals tend to be in tension
with ridership and mode-share goals
, and by focusing solely on the coverage side of the
equation, Freemark provides an incomplete picture of what the role of federal
funding could or should be. Do all communities have the same goals for their
transit systems, and do they want to serve the same populations? Should they?
An equally good argument can be made that limited federal dollars should be
spent on providing service that reaches the most people for the least amount of
money.  That, too, could be called fair.

In his
transit planning outreach, Walker “emphasize[s] how the geography of transit
generates choices among competing values, which is why citizens and their
elected officials ultimately need to make the decision.” What kind of transit
to fund, and how much money to devote to it, is not merely a question of the
availability of money, but also a value judgment, one that the local area has
to make for itself. A more conservative community’s funding choices may be in
part a reflection of their values, just as their voting behavior is.

Federal
funding for transit operations could provide a valuable resource for local
governments that would like to do more, but can’t afford to.  But Federal funding also relies on evidence
of local financial support or “match.”  Local
government must decide whether it would like to fund additional transit, and if
so, what the goal of that transit should be. In discussing the role of federal
funding, no one is well served by assuming all cities would make that decision
with the same goals in mind.

 

17 Responses to should u.s. federal transit spending aim to redistribute wealth? (guest post by alexis grant)

  1. Erik Landfried March 26, 2013 at 8:01 pm #

    I don’t think Yonah was arguing about coverage vs. ridership at all. What I took from his article was that if you have two identical cities in terms of geography, density, population, etc., but one city is twice as poor as the other one, that if the federal government gets out of the transit operations game, the city with the poorer population would likely not be able to provide as much service even though their need would be greater. I also don’t think he argued that the federal government should provide the majority of operations funding – local governments and the customers themselves would still pay for much of the cost of service (and thus still have the largest say in how important transit is to their community).
    Perhaps I am misinterpreting what Yonah was saying (it would be great if he replied himself).

  2. Yildo March 26, 2013 at 8:23 pm #

    The question in the title suggests that it’s possible for transit to not “redistribute wealth”. There are no mass transit services in North America that break even — whose operational is covered entirely by fares. They are all subsidized. They all redistribute wealth to their riders.
    For mass transit to not redistribute wealth, it would have to be profitable. This requires the areas that it serves to resemble Hong Kong in density and built form. This is not immediately likely on this continent.

  3. Neil March 26, 2013 at 11:56 pm #

    @Yildo – profitable ventures also redistribute wealth: from the riders to the company owners (and employees, too). All economic activity redistributes wealth.
    The thing I found interesting is that the study quoted tracks a correlation between income and level of transit spending. Yonah reads into that causation: poorer cities choose to spend less on transit.
    But causation can equally work the other way with good transit attracting higher-income jobs and employees, and connecting marginalized populations to employment and educational opportunities in parts of town they’d otherwise be unable to reach, increasing their wealth too.
    In reality, there’s probably a bit of both at work, in a virtuous cycle of increasing transit and increasing incomes. But it would make taking the early steps an easier sell at city hall if it can be demonstrated that an investment in transit will pay itself back in increased local incomes (and presumably related increased future tax revenues).

  4. Simon March 27, 2013 at 4:10 am #

    FWIW, In NSW,AU when the ALP was elected in the 1990s one of its early legislative acts was to amend the act governing IPART to require them to do precisely that.

  5. Zoltán March 27, 2013 at 4:49 am #

    Coming from a UK perspective, I find the argument that serving the poor and transit dependent well and ridership maximisation in conflict bizarre.
    The principal impact of the elimination of most transit subsidies and most state control outside of London in 1986 has been to provide more frequent service to areas of high transit dependence. All matters of density and urban form being equal, transit dependence maximises transit ridership, and the market responds to that.
    Pre-1986, a regressive redistribution was common in the UK. Cross-subsidies were used to extract profits from high-ridership service to low-ridership service; this principally meant better service to wealthy suburbs than otherwise merited.
    While differences in urban form exist between the UK and US, both have suburban concentrations of transit dependence as well as inner city transit dependence. Indeed, the major gain for many UK cities post-1986 has been serving those suburban areas (especially social housing projects) with very frequent service by minimising shortlining and branching.
    The major downside is that riders have to pay the full cost of their good service, leading to fares (very) roughly 2x those of equivalent cities in the US. But this leads me to conclude that if the Federal Government wished to undertake redistributive transit subsidies, the best outcomes would involve distorting the market as little as possible.
    I suspect that may be best achieved through a uniform subsidy as a percentage of fares paid (with regulations forbidding reallocation of that money outside of transit operations). That would distribute money to cities where demand for transit is high, and incentivise them to maximise ridership. Meanwhile, coverage service failing to break even under a fare subsidy would be funded locally according to local coverage goals, as now.
    However it would be done, I strongly suspect that the best outcomes for the majority of transit dependent riders across the US would be delivered by letting ridership determine the majority of service provision and subsidy allocation, which in turn would be delivered by operational subsidies that distort the market to a minimum.

  6. Yaffe March 27, 2013 at 7:01 am #

    Why is this “redistributing wealth” argument acceptable for serious discussion? Transit is an efficient use of public dollars to move people. Transit is an efficient use of public dollars to enable those who aren’t driving to reach work and needed shopping, medical and other destinations. Transit allows more people to join the labor pool. Silly slogan-type arguments such as redistributing wealth divert discussion from the real objectives.

  7. Ant6n March 27, 2013 at 7:29 am #

    This is a complete red herring, and sounds a bit like the neo-liberal “I don’t like welfare” knee-jerk reaction. As others have pointed out, there’s a correlation between need and potential ridership. Right now the problem is that poor neighborhoods are underserved while rich suburbs overserved, resulting in the exact opposite of the posters claim, namely less than optimal ridership. And the problem continues when higher order transit is built with a focus on how many people can be converted from cars to transit — since poorer areas use buses more than richer areas, fewer people can be converted, so the shiny new rail line is built in the richer neighborhood — instead of building it where it could improve service for the most people.

  8. Joe Busman March 27, 2013 at 9:12 am #

    The idea that the federal government could or should be Robin Hood is part of the problem. When we give the federal government power to reallocate resources in any direction, we risk some powerful entity taking rein of the fed and reallocating resources in their favor. Take for instance the Federal Reserve, created to reallocate monetary resources to theoretically stabilize the money supply to the benefit of all. The banks and the politicans they have bought have now used the Fed Reserve to reallocate wealth into their pockets. Today, the federal govt takes taxes, filters it through their massive FTA bureaucracy, then mandates capital spending over operating spending so we have brand new shiny buses (to the benefit of bus manufacturers), brand new shiny transit stations (to the benefit of the construction industry), on fewer routes, with fewer drivers, with less frequency. As far as I’m concerned, the FTA should close shop and allow each city to finance their own transit completely. I don’t buy the poor city/rich city argument. Poor cities can be smart cities by fighting sprawl and providing tax credits for high density development and stop subsidizing sprawl development and force sprawl developers to pay for extended sewege, roads, police and fire. The government is the problem not the solution. It overbuilt streets and freeways to line the pockets of oil giants and auto manufacturers.

  9. Beta Magellan March 27, 2013 at 9:23 am #

    @Ant6n: There may be a correlation between need and potential ridership, but it’s not necessarily an easily served ridership. Lower-income jobs tend to be fairly dispersed and harder to serve. When you compare boardings Chicago’s Red Line Dan Ryan branch, for instance, with downtown boardings (http://www.transitchicago.com/assets/1/ridership_reports/2011-Annual.pdf), it’s obvious that a lot of ridership is inter-south side; that some of Chicago’s most used buses are crosstown is another example of this. Indeed, since the Red Line is mostly inaccessible to pedestrians the two work in concert. You need a network to effectively serve a lot of low-income commuters (which is probably why a lot of equity-based transit advocacy is so concentrated on increasing bus service), and unfortunately there isn’t much network-based thinking in American politics.

  10. Wanderer March 27, 2013 at 10:02 am #

    Within metropolitan areas at least, the story is more complicated than coverage = low income service, ridership maximum equals higher income service. That would be true where higher density areas are higher income, as is the case in some neighborhoods in California cities (e.g. San Francisco). But it’s clearly not true in some cities, such as Oakland. There the highest density areas are low income, so serving the poor and gaining high ridership align. In San Jose, VTA’s network, taken as a whole, provides better service and gets better ridership on the lower income east side of the city.
    It would be great if some number cruncher type would take the data on metropolitan income and transit service and add in some factors relating to density, concentrated employment centers, and other relevant factors. Fresno, for example, is considerably less dense than San Jose, and in that way is harder to serve with transit.

  11. Andre Lot March 27, 2013 at 10:16 am #

    @Joe Busman: your argument has a flaw that is common to many transit activists (or activists of any infrastructure-related cause): overemphasizing the role and importance of the topic you are keen on advocating on economic development.
    While the argument about certain costs of sprawl infrastructure building is one up for discussion and serious consideration, it can’t, alone, explain economic development.
    Let’s take an extreme case: if you built 200 miles of subway lines in Detroit in 3 years, for instance, and nothing else changed, that wouldn’t make Detroit a place booming in terms of economy or population just because of its flashy transit.

  12. Transit Riding Transit Planner March 28, 2013 at 10:29 am #

    This post seems very confused. First of all, if the Federal government is involved in transit funding, or for that matter, funding of anything whatsoever in any way, it is “redistributing wealth.” That’s practically the only thing the Federal government can do – it collects taxes from around the country and then reallocates that money around the country. If it spent the exact same amount of money in each location as the taxes it collected from that location, there would be no reason for them to be involved at all – you could just leave the money where it is and get the same result (plus saved transaction costs). The other thing the Feds do is borrow/create money in ways that state/local governments can’t. That redistributes wealth in other ways – between nations or from the future to the present.
    If Federal transit funding tilts more towards states and localities that already have money of their own to spend on transit, that will indeed be a redistribution of wealth – a regressive redistribution, because taxes will be collected everywhere and then spent more in places that have more money to begin with.
    Aside from all that, the question of wealth redistribution is orthogonal to the coverage/ridership debate. Most metro areas have both rich and poor areas with high ridership potential, as well as “coverage” areas at both ends of the spectrum. I believe all Yonah Freemark’s post was claiming was that the proposed changes to Federal funding will leave states and localities that already have more resources to pursue their goals in an even better position, and states/localities with less resources to pursue their goals in a worse position, regardless of whether those goals are based on ridership, coverage or some other metric.

  13. Nate Wessel March 28, 2013 at 9:17 pm #

    @ Joe Busman:
    I would agree if any place in America had a legitimate metropolitan government. As it is, central cities(Here in Cincinnati, municipal Cincinnati is ~15% of the region’s population) are hardly in a position to stop sprawl in their neighboring competitors *cough* I mean “cities”. Regions are structured in such a way that collective action problems are exacerbated and they’re almost totally unable to act in their own collective interest regardless of any reasonable individual decisions. Federal or state intervention of some sort is absolutely necessary.

  14. Yonah Freemark March 28, 2013 at 9:29 pm #

    Hi,
    I appreciate this response to my post on The Transport Politic, but, as many of the previous commenters noted, I feel that it does not do justice to what I wrote nor does it answer the questions I raised.
    In my mind, there are three important interrelated — but also distinct — fundamental public policy issues about urban transit funding. One, how much money should be spent for transportation? Two, who should pay for those investments? And three, what investments should be prioritized.
    My article attempted to bring some insight into the second question: Should states, local governments, or Washington be the primary contributors to transit funding. My argument is that different levels of local income significantly affect the amount of service provided by transit authorities. In my mind, this is a strong argument for nationalizing transit funding because it makes little sense to penalize the people of a poor city by forcing them to rely on local funds alone to pay for the operations of their transit system.
    This article in response to mine answers the third question: given a certain amount of funds, what projects should be funded. I don’t disagree that this is an essential question, but it is only indirectly related to who pays. The argument here seems to be that state and local governments will make better choices about what to fund than the federal government, and that local governments that invest should be rewarded with matching funds.
    But my sense is that first, there is little evidence that local decision making when it comes to transit rarely improves outcomes. Moreover, and more to the point I raised in my article, poorer cities that want to invest are not able to do so because of local funding constraints related to the wealth of their local populations. Thus the value of a federal commitment to funding transit, to equalize the chance for investment.

  15. Mike March 30, 2013 at 6:41 pm #

    Sadly, the coverage goal is almost never applied in the US. This is seen in the many studies which show that many people in US metropolitan areas can’t even get to work on transit.
    I personally think much too much focus lately has been on the idea of serving high ridership routes or corridors at the expense of lower ridership coverage services.
    We must remember that in a transit network, you must be able to get anywhere in the built up areas. And if you can’t, then you are not providing mobility. You must also remember that the so called low performing route contribute to ridership on the busy ones.
    If federal funding is tied to anything, it should be to ensure a minimum level of service and coverage is provided in every American city.
    I also don’t like the idea of basing transit funding on poverty levels. this just implies that transit is for the poor. Here again the US has to get away from this thinking, and instead build and think of transit as a service for all. If transit’s mandate is just to serve the poor, then transit has failed.

  16. Eric Goodman April 3, 2013 at 5:02 pm #

    Mike said: “If federal funding is tied to anything, it should be to ensure a minimum level of service and coverage is provided in every American city.”
    What standard would you suggest? The same in every city or different standards for older rustbelt vs newer sunbelt cities? How much would that cost? How would we raise that much money? What return would the spending buy us? Does that plan generate majority support?
    I once lived in a low density area near a system that sent buses on a route to a particular neighborhood on one particular day of the week. Mondays it served neighborhood A with a few trips, Tuesdays it served suburb B, Wednesdays suburb C, etc. It created an option for the absolutely dependent to go out shopping and get to medical appointments. It was useless for workers or students (transit’s best markets) who need to travel more than one day a week. Ridership was low enough that the route could have been run with a minivan instead of a bus. Cost was low because there was no complimentary paratransit required. Thus possible ADA eligible “transit dependent” people got no benefit. Almost everyone in the area was covered by minimal service – very minimal. Board members could look at a map and see that their folks had gotten something and that was enough. Transit use did not change across the system. Almost everyone continued to drive and make the place inhospitable to pedestrians and cyclists. There was no incentive to build dense land uses in locations that transit served, because it did so poorly. Opponents of transit got factual numbers that pointed out an embarassingly low ROI. Transit did not compete well with other government funding priorities because the return on subsidy dollars was so lousy, and XX Transit was the butt of many, many very impolite jokes.
    Is that a good use of limited transit resources because it provides something everywhere? or should they have consolidated the 5 routes into 1 route serving only the densest of the 5 areas with a consistent schedule allowing more variety of trips to use transit on a daily basis?
    Personally, I would rather subsidize housing for the transit dependent in areas where good transit can be provided efficiently, than subsidize infrequent transit service to unproductive low density areas.
    As for Yonah’s article more directly, it made me cringe. It seems entirely written for liberals who favor redistribution where broad circumstance has created harmful inequities at the level of communities, but I think the language of need and ability (straight from marx) is a huge red herring if you even hope to engage a conservative audience. That appears necessary if any progress before 2015 is hoped for. Conservatives see these things at a more individualized level. They don’t rule out the role of luck and circumstance entirely, but they are more likely to see “ability to pay” as a result of effort and merit, while “need” arises from the consequence of making poor choices or insufficient effort. Their worldview says that if the latter is rewarded and the former punished, the moral order that incentivizes work and keeps society together will crumble. Liberals think this sacrifice of individuals for the greater good is cruel and heartless, and they would contend that the safety net empowers more people to take risk and make significant contributions than would do so without it.
    The language Yonah used is likely to turn off many before a conversation can even begin. Liberals want systems that reward cooperation and deliver more equitable outcomes, while conservatives favor equitable opportunities and competition that rewards virtue. I, like many Americans, find myself somewhere in the middle.
    I understand the point Yonah is making that federal resources could have a bigger impact in places with less financial “capacity” to help themselves, and more potential people that would find transit’s value proposition positive. I didn’t take it as an advocacy for coverage over ridership, but for directed spending in areas where ridership potential is high and financial capacity is low. Unfortunately, I don’t think he addresses the concern about regions that choose a low level of investment in themselves for reasons other than financial capacity. They could be rewarded while places willing to put up their own funds would be left without a partner and actually worse off for having their paid taxes diverted elsewhere via DC.
    If we flipped federal assistance to operations instead of capital expenses then safety, reliability and (ironically)coverage would suffer. The enticement of a few extra trips in the peak (where the feds would want to spend ops money) is not a compelling enough reason to spend big local dollars on a shiny new bus or 20, so that would be passed up by poorer communities. Hybrids would never be purchased unless some efficiency mandate was in place. On the other hand, when the feds give you shiny new buses, and transit centers for them to serve, it is embarassing not to come up with local funds to operate them.

  17. John Ericson January 9, 2014 at 7:03 pm #

    There is some good discussion here; more thoughtful than what usually passes for public discourse these days. The topics of how much transit, who should pay and what to prioritize would make a great roundtable at a policy, transportation or planning conference.

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