As fiscal year 2003 comes to a close, Congress will attempt to complete major transportation legislation to reauthorize the federal surface transportation program for another six years. With total spending of $247 billion to $370 billion at stake, lobbyists and advocates for various industries and causes are working overtime on behalf of their favorite programs.
Among the most aggressive of these advocates are those who support more spending on transit (e.g., trolleys, buses, light rail, and commuter rail) because they have the most to lose. As much as 20 percent of federal transportation funding goes to transit, which serves less than 2 percent of travelers. Transit advocates know there is a risk that Congress may recognize this astonishing waste of money and shift the funds to highway programs, which serve the overwhelming majority of travelers and commuters.
Of the many rationales offered in defense of disproportionately high transit spending, the most novel put forth this year is the bizarre claim by the Surface Transportation Policy Project (STPP) that auto ownership by the working poor leads to a more limited standard of living and diminished home ownership opportunities.
Members of lower-income households who cannot afford cars account for a majority (approximately two-thirds) of today's transit riders, and the emergence of prosperity among this group threatens transit with the loss of its captive constituency and further shrinkage of its miniscule market share. Public transit's share of urban travel has plunged 75 percent in four decades, from a 7.1 percent share in 1960 to 1.8 percent in 2000. At some point, ridership will be so low that transit will lose the political support it needs to make its annual $7 billion claim on the highway trust fund. Among the social forces combining to put transit at risk is welfare reform in the mid-1990s and its success in raising low-income households to economic self-sufficiency and financial independence. Much of this has occurred by putting former welfare recipients to work.
As federal welfare policy focuses on raising incomes and putting people to work, welfare analysts have recognized the importance of transportation and mobility in linking the unemployed to the widest choice of good jobs. Because transit is slow and reaches only a fraction of the places offering employment in any metropolitan area, many of these same experts have come to realize that ready access to an automobile is the key to a good job and a prosperous work career.
In 1999, President Bill Clinton earned the ire of anti-car environmentalists when he succeeded in changing food stamp eligibility standards to ensure that the working poor could buy a car without jeopardizing their benefits. Subsequent studies by scholars at the Brookings Institution and the Progressive Policy Institute have shown the value of auto mobility to upward mobility. According to one recent Brookings Study, "Most welfare recipients do not have access to a dependable automobile, and research indicates that lack of access to an automobile is one of the most prevalent barriers to employment."
It is indeed ironic that many social scientists believe that the best way to help former welfare recipients secure jobs is to give them automobile purchase assistance, thereby trapping them into the poverty cycle even more profoundly, as the poor typically end up with less reliable cars which are more expensive to operate and maintain.
Instead, the STPP urges the government to fund bicycles, car-sharing programs, and more transit. As Congress crafts the new federal transportation bill, there is a risk that some Members may actually believe this kind of advice and divert scarce federal financial resources to counterproductive programs that both waste money and hurt the poor.
Not content simply to get the poor onto bikes, the STPP also urges land use restrictions to force people to live in more compact communities that lend themselves to greater transit use and less car dependence and ownership. In support of greater land use regulations, the STPP contends that more sprawl leads to more transportation spending and that greater transportation spending comes at the expense of home ownership and housing affordability. Conversely, as the STPP hypothesis argues, less sprawl would lead to more affordable housing and more home ownership.
To support its theory about the inverse relationship between transportation costs and home ownership, the STPP has presented data for 26 large U.S. metropolitan areas. However, a casual examination of the data confirms no such relationship. Indeed, the data show precisely the opposite: The greater the degree of sprawl, the lower the transportation costs, the more affordable the housing, and the greater the regional home ownership rate.
The lessons for Congress from the STPP's misplaced effort and revealing data are that automobiles continue to gain market share, are the preferred and most cost-effective form of mobility, and have an important role to play in helping low-income families gain financial independence. Despite these obvious advantages, the federal transportation program has suffered from an advanced case of mission creep over the past several decades and now spends tens of billions of dollars on marginal projects that benefit only a small fraction of the traveling public.
Whether it is money for the renovation of covered bridges, thousands of pork-barrel projects, buses and trolleys, historic preservation, hiking and biking trails, maglev research, or highway beautification programs, all of these diversions are funded by the fuel taxes paid by motorists who suffer from worsening congestion because of these diversions. This year's reauthorization of the transportation program is a good place to start restoring balance to the program and begin funding projects that people actually want to use, such as more road capacity.
Wendell Cox, Principal of the Wendell Cox Consultancy in St. Louis, Missouri, is a Visiting Fellow at The Heritage Foundation, and Ronald D. Utt, Ph.D., is Herbert and Joyce Morgan Senior Research Fellow in the Thomas A. Roe Institute for Economic Policy Studies at The Heritage Foundation.