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Spotlight 399 PublicTransit in North Carolina

Spotlight 399 PublicTransit in North Carolina

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Key facts: • For every dollar collected in fares from transit riders, the average transit system in America requires more than $2 from taxpayers for operating subsidies plus more than $1 for capital improvements and maintenance.
• In 2008, the federal government collected about $1.11 billion in user fees from North Carolina highway users but returned only $656 million to the state for highways.
• Adding the federal, state, and local numbers together, North Carolina highways users paid about $203 million more user fees than was spent on roads in 2007.
• North Carolina highway users are subsidizing other programs at the rate of slightly more than a penny per passenger mile. The total cost of driving in North Carolina is no more than 22 cents per passenger mile.
• By comparison, the state average cost of public transit is $1.15 per passenger mile, nearly $1 of which is subsidized by non-transit users.
• Annual capital costs and depreciation add another $71 million to the cost of running North Carolina transit. Taxpayers lose $249 million per year on transit systems in a dozen NC cities.
• Bus transit costs taxpayers an average of 85 cents a passenger mile. Subsidies to the Charlotte light rail are several times greater. North Carolina transit riders pay an average of 72 cents every time they board a bus, while taxpayers pay an average of more than $3 to support that trip.
• Driving is more energy efficient and produces less carbon emissions than almost any transit system in North Carolina.
• Currently transit agencies have incentives from Congress to choose high-cost forms of transit. Changing those will make it easier for agencies to allow such reforms as smaller vehicles, contracting out, jitneys, privatization, and vouchers.
Key facts: • For every dollar collected in fares from transit riders, the average transit system in America requires more than $2 from taxpayers for operating subsidies plus more than $1 for capital improvements and maintenance.
• In 2008, the federal government collected about $1.11 billion in user fees from North Carolina highway users but returned only $656 million to the state for highways.
• Adding the federal, state, and local numbers together, North Carolina highways users paid about $203 million more user fees than was spent on roads in 2007.
• North Carolina highway users are subsidizing other programs at the rate of slightly more than a penny per passenger mile. The total cost of driving in North Carolina is no more than 22 cents per passenger mile.
• By comparison, the state average cost of public transit is $1.15 per passenger mile, nearly $1 of which is subsidized by non-transit users.
• Annual capital costs and depreciation add another $71 million to the cost of running North Carolina transit. Taxpayers lose $249 million per year on transit systems in a dozen NC cities.
• Bus transit costs taxpayers an average of 85 cents a passenger mile. Subsidies to the Charlotte light rail are several times greater. North Carolina transit riders pay an average of 72 cents every time they board a bus, while taxpayers pay an average of more than $3 to support that trip.
• Driving is more energy efficient and produces less carbon emissions than almost any transit system in North Carolina.
• Currently transit agencies have incentives from Congress to choose high-cost forms of transit. Changing those will make it easier for agencies to allow such reforms as smaller vehicles, contracting out, jitneys, privatization, and vouchers.

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Published by: John Locke Foundation on Sep 16, 2010
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The John Locke Foundation
is a501(c)(3) nonprot, nonpartisan researchinstitute dedicated to improving public policy debate in North Carolina. Viewpoints expressed by authors do not necessarilyrefect those o the sta or board o the Locke Foundation.
200 W. Morgan, #200Raleigh, NC 27601
phone:
919-828-3876
ax:
919-821-5117www.johnlocke.org
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No. 399 – September 16, 2010
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key acts:• or vr dollr olld in r rom rni rid-r, h vrg rni m in amri rquir mor hn $2 rom x-pr or opring ubidi plu mor hn $1 or pil improvmnnd minnn.• In 2008, h drl govrnmn olld bou $1.11 billion in ur rom Norh crolin highw ur bu rurnd onl $656 million o h or highw.• adding h drl, , nd lol numbr oghr, Norh crolin high-w ur pid bou $203 million mor ur  hn w pn on rodin 2007.• Norh crolin highw ur r ubidizing ohr progrm  h ro lighl mor hn  pnn pr pngr mil. th ol o o driving inNorh crolin i no mor hn 22 n pr pngr mil.• B omprion, h  vrg o o publi rni i $1.15 pr pn-gr mil, nrl $1 o whih i ubidizd b non-rni ur.• annul pil o nd dpriion dd nohr $71 million o h oo running Norh crolin rni. txpr lo $249 million pr r onrni m in  dozn Nc ii.• Bu rni o xpr n vrg o 85 n  pngr mil. sub-idi o h chrlo ligh ril r vrl im grr. Norh crolinrni ridr p n vrg o 72 n vr im h bord  bu, whilxpr p n vrg o mor hn $3 o uppor h rip.• Driving i mor nrg fin nd produ l rbon miion hnlmo n rni m in Norh crolin.• currnl rni gni hv inniv rom congr o hoo high-o orm o rni. chnging ho will m i ir or gni o llowuh rorm  mllr vhil, onring ou, jin, privizion, ndvouhr.
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ublic transit is oten portrayed as a low-cost, energy-ecient alternative to auto driving.
1
In act, transit ismuch more costly than driving and requires huge subsidies to attract any riders at all. Moreover, transitsystems in the vast majority o American cities use more energy and emit more greenhouse gases than theaverage car.
2
For every dollar collected in ares rom transit riders, the average transit system in America requires more than$2 rom taxpayers or operating subsidies plus more than $1 or capital improvements and maintenance.
3
So it is notsurprising that transit systems in North Carolina require large subsidies. What may be surprising is that most are arless environmentally riendly than a typical sports utility vehicle.
th co o Driving
 Americans drive or 85 percent o their travel not because we are somehow addicted to the automobile but becauseautos are both more convenient and less expensive than most o the alternatives. Unlike transit buses, trains, or air-planes, automobiles make it possible or people to go where they want to go when they want to go there. According to the Bureau o Economic Analysis, Americans spent $950 billion buying, operating, and maintainingtheir cars and light trucks (including pickups, SUVs, and ull-sized vans) in 2008.
4
That’s a lot o money, but thosecars and light trucks also carried us nearly 4.5 trillion passenger miles, or an average cost o less than 22 cents perpassenger mile.
5
 Contrary to popular belie, there are no ederal subsidies to highways and ew state subsidies. Since at least 1956,almost all ederal highway unds have come rom ederal gas taxes and other highway user ees.
6
Moreover, since 1982Congress has diverted billions o dollars o highway user ees to transit and other uses each year. Recent appropria-tions o general unds to the highway trust und were needed only because Congress diverted more gas taxes to transitthan were being collected.In 2008, the ederal government collected about $1.11 billion in user ees rom North Carolina highway users.
7
Butit returned only $656 million to the state or highways.
8
 State subsidies to highways are also limited and depend on the state. In 2008, $328 million in North Carolina stategas taxes and motor vehicle ees were diverted to non-highway uses, while the state spent no more than $115 millionin non-user ees on roads.
9
Counting both state and ederal dollars, the state actually spent $664 million less on roadsthan users paid.The only real subsidies to North Carolina roads come rom local governments, ew o which collect gas taxes orother highway user ees. In 2007, North Carolina local governments spent $461 million in general unds, propertytaxes, and other non-user ees on highways and streets.
10
  Adding the ederal, state, and local numbers together, North Carolina highways users paid about $203 millionmore user ees than was spent on roads in 2007. Since North Carolina motorists drove about 104 billion vehicle milesin 2007, and the average car has about 1.6 people, this means highway users are subsidizing other programs (or, in thecase o ederal money, highways in other states) at the rate o slightly more than a penny per passenger mile.
11
Anyway you look at it, the total cost o driving in North Carolina is no more than 22 cents per passenger mile.
th co o trni
By comparison, the national average cost o public transit is more than 90 cents a passenger mile, more than 70cents o which is subsidized by non-transit users. In North Carolina, the costs are higher: $1.15 per passenger mile,nearly $1 o which is subsidized.
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tbl 1. 2008 co nd subidi Pr Pngr Mil nd Pr trip
 BusCost/PMSubsidy/PMCost/TripSubsidy/Trip
 Asheville $0.81$0.68$3.26$2.72Cary 2.362.2814.9914.45Chapel Hill 0.970.532.481.35Charlotte 1.000.864.964.27Durham 0.720.582.822.27Fayetteville 1.581.394.934.33Greensboro 0.940.813.603.11High Point 1.321.093.162.61Raleigh 0.950.823.703.20Raleigh 1.230.352.300.65Research Triangle Park1.341.2415.0913.98Wilmington 1.541.364.293.80Winston-Salem 1.971.684.033.44State Average1.030.854.173.45
 ParatransitCost/PMSubsidy/PMCost/TripSubsidy/Trip
 Asheville 1.491.2813.9912.01Cary 4.364.2139.7538.38Chapel Hill 6.106.1027.5527.53Charlotte 3.513.2631.4729.23Durham 3.183.0425.8724.75Fayetteville 3.243.1133.3432.03Greensboro 3.643.5528.6927.94Guildord County1.921.8832.4931.83High Point 1.901.6013.0611.02Research Triangle Park2.472.0255.1945.11Wilmington 1.881.8617.5017.29Winston-Salem 3.732.3016.4410.14State Average3.012.8027.4525.53
VanpoolsCost/PMSubsidy/PMCost/TripSubsidy/Trip
Charlotte 0.090.054.142.14Research Triangle Park0.150.104.533.03
 RailCost/PMSubsidy/PMCost/TripSubsidy/Trip
Charlotte Light Rail3.613.4920.8620.14
Cost/PMSubsidy/PMCost/TripSubsidy/Trip
 Average oAll Transit1.150.995.384.62Driving0.230.011.080.02
Sources: Transit from 2008 National Transit Database, operating expense, capital cost, and service spreadsheets; driving from Bureau of Economic Analysis, “Personal Incomes Expenditures by Type of Expenditure,” table 2.5.5 and HighwayStatistics 2008, table VM-1. Per-trip numbers for driving assume trip lengths of 4.7 miles, equal to the average for NorthCarolina transit. In reality, auto trips tend to be longer than transit trips.
Most transit agencies do noteven pretend to try to cover theiroperating costs, much less theircapital costs, with passenger ares.North Carolina transit agencies,or example, spent $220 millionoperating transit lines in 2008, butcollected only $41 million in ares.In addition to the annual op-erating costs, transit subsidies in-clude the capital costs o buyingbuses and other acilities. Capitalcosts fuctuate tremendously romyear to year as transit agenciesreceive ederal grants to replacelarge segments o their bus feetsin some years and make ew capi-tal purchases in other years.The Federal Transit Admin-istration has published cost dataor every transit agency rom 1992through 2008, providing 17 years’worth o capital cost data.
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Ateradjusting or infation, the averageo these 17 years provides a rea-sonable approximation o annualcapital costs or bus transit. In thecase o the Charlotte light-rail line,actual capital costs were depreci-ated over 30 years at 7 percent, asdirected by Federal Transit Admin-istration accounting rules.
14
  Annual capital costs and de-preciation add another $71 millionto the cost o running North Caroli-na transit, meaning taxpayers lose$249 million per year on transitsystems in a dozen North Carolinacities. This does not count transitagencies in Gastonia, Goldsboro,Greenville, Hickory, Jacksonville,Lexington, and Rocky Mount,which did not submit sucient

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