Finance

Paying for Transportation:

Just how are public and private transportation financed?

Private transportation mostly pays for itself.

     A vehicle’s owner pays for the purchase of the car, fuel, up keep, insurance, parking, etc. The roads and highways are paid for by the variety of taxes and charges put on automobile users. Charges include license fees, registration fees, and state and federal gasoline taxes. Federal contributions to road construction comes from Highway Trust Fund, which is supported largely by federal excise taxes on the sale of motor fuel.

But what about the hidden costs not covered? Cost like air pollution, death and injury form accidents; and scattered patterns of land use. They all result in increased costs of public services. Ever got stuck in traffic because of a car crash and the police shut off the road for the ambulances. Meanwhile cars are still coming down the road, making traffic build up more and more. You’re stuck in bumper to bumper traffic with your car on, waiting for the police to redirect you or for them to finish. In all this, we have a high level of air pollution going on in a condensed area.

You could even go as far to say that suburbs are to blame but that’s another topic.

Regardless that fact is that automobile transportation is primarily paid for by those who use it.

Paying for public transportation is different.

      Only one third if transit expenditures are paid by fares. The other two thirds of transit expenses are paid for by non-revenues of transit agencies such as tolls and taxes by a variety of grants and subsidies form local state, and federal governments. (M. Levy, 2010, p. 238)

That means that without subsidization, public transportation wouldn’t exist!

(The Henry Ford Museum, personal communication, 2012)

So why is public transportation subsidized?

Reason #1.) 

•          A large portion of our population can drive their own cars because they are too young, too old, disabled, and/or they cannot afford the expense of car ownership. So society must provide them with some means of personal mobility.( M. Levy , 2010, p. 239)

Reason #2.)   

•                  It improves circulation in urban areas by reducing the number of private vehicles in use. Meaning if there are less cars on the road that’s one more car not putting out emissions. Reduces the total amount of emissions.( M. Levy , 2010, p. 239)

Reason #3.) 

•                 Heavier reliance on public transportation also permits to more compact urban design. All of these points suggest that  public transportation confers benefits on nonusers as well as users..( M. Levy , 2010, p. 239)

Reason # 4.)  

       (So your probably wondering why reason #4 is smaller then all the others. Well its not because its a typo. I'll explain why, but for now keep reading.)

•        Some believe that public transportation should be subsidized so as to redistribute income.  What they mean by this is by providing a service, at a price below cost to fund and upkeep it , used more heavily by low income people, we are, in effect, transferring income to them. ( M. Levy , 2010, p. 239)

   Whats the problem with this statement? Its weak.

(That's right I made reason #4 small! To demonstrate its inferiority to the others                   through size! )

           Not all low income people use public transportation just like not all of the people riding public transportation poor.  Most have an average or above income.

Where did I get all this?

     Check out Contemporary Urban Planning by John M. Levy the next time you’re at a library.

Reference~

-Levy, John M.. "Chapter 12: Transportation Planning." Contemporary urban planning. 9th ed. Upper Saddle River, N.J.: Prentice Hall,Inc: Longman, 2010. pp.234-258. Print.