Abstract
In the United States, federal funding for public transit often accounts for a large proportion of a local agency's budget, especially for capital investments. For this reason, local governments can be expected to plan a portfolio of projects that maximize federal contributions. This study examines the financial effects of federal transit subsidy policy on local transit investment decisions. Data from a System Planning Study for the Geary Corridor in San Francisco are used as an illustration. It is found that federal transit subsidy policy provides financial incentives for local decision-makers to select capital-intensive investment options that may not be efficient or effective. While federal financial incentives are not the only factor influencing local investment decisions, some reform of the current subsidy policy may be necessary to reduce the incentive for ineffective use of public resources.
This is a preview of subscription content, log in via an institution to check access.
Similar content being viewed by others
References
American Public Transit Association (1988 & 2000) Transit Fact Books. Washington, DC.
Barnum DT & Gleason JM (1979) Measuring the Influence of Subsidies on Transit Efficiency and Effectiveness. UMTA-NE-11-0002-80-4. Gary: Indiana University; Omaha: Nebraska University.
Black A (1995) Urban Mass Transportation Planning. New York, London, Tokyo, Toronto: McGraw-Hill, Inc.
Cabanatuan M (2001) Mineta's mass-transit advocacy democratic nominee an uncertain fit in Bush's cabinet. San Francisco Chronicle, January 4, 2001.
Center for Transportation Excellence (1994–2000) Election issues. http://www.cfte.org/election/election.htm.
Cervero R (1984a) Cost and performance impacts of transit subsidy programs. Transportation Research Part A 18A(5/6): 407-413.
Cervero R (1984b) Examining the performance impacts of transit operating subsidies. Journal of Transportation Engineering 110(5): 467-480.
Cervero R (1994) Rail transit and joint development: Land market impacts in Washington, DC and Atlanta. Journal of the American Planning Association 60(1): 83-94.
Cervero R & Landis J (1997) Twenty years of the bay area rapid transit system: Land use and development impacts. Transportation Research Part A 31A(4): 332-333.
Cole R & Li J (2001) Arlington Transportation Survey, report prepared for the City of Arlington, School of Urban and Public Affairs, the University of Texas at Arlington.
Cromwell BA (1989) Capital subsidies and the infrastructure crisis: Evidence from the local mass-transit industry. Economic Review. Federal Reserve Bank of Cleveland 2: 11-21.
Dietz D (1995) Budget analyst offers gloomy forecast for muni new taxes suggested to stem deficit. San Francisco Chronicle, November 8, 1995.
Federal Transit Administration (FTA) (1993) 1992 Statistical Summaries: Grant Assistant Programs. Washington, DC: US Department of Transportation (DOT).
Federal Transit Administration (FTA) (2001) 2000 Statistical Summaries: FTA Grant Assistant Programs. Report No. FTA-TMM10-2001-01. Washington, DC: US Department of Transportation (DOT).
Frankena MW (1987) Capital-biased subsidies, bureaucratic monitoring, and bus scrapping. Journal of Urban Economics 21: 180-193.
Goldman T & Wachs M (2001) A quiet revolution in transportation finance: The rise of local option transportation taxes, submitted to Journal of the American Planning Association, August 2001.
Gomez-Ibanez JA (1985) A dark side to light rail? The experience of three new transit systems. Journal of the American Planning Association 51(3): 337-351.
Hager P & Stein MA (1992) State justics reject transit tax challenge government: Foes of half-cent surcharge approved in 1990 said it needed two-thirds vote. Officials look to funds for budget bailout. Los Angeles Time, May 15, 1992.
Hilton GW (1974) Federal Transit Studies. Washington: American Enterprise Institute for Public Policy Research.
Kain J (1988) Choosing the wrong technology: Or how to spend billions and reduce transit use. Journal of Advanced Transportation 21(3): 197-213.
Kain J (1990) Deception in Dallas: Strategic misrepresentation in rail transit performance and evaluation. Journal of the American Planning Association 56(2): 184-196.
Lem LL, Li J & Wachs M (1994) Comprehensive Transit Performance Indicators. Report prepared for the University of California Transportation Center & the California Department of Transportation. Institute of Transportation Studies, University of California, Los Angeles.
Li J (1992) Transit Subsidies and Performance: The Case of Los Angeles County. Masters Thesis. Los Angeles: University of California.
Merrill & Associates (April 1995) Geary Corridor System Planning Study: Final Report.
Meyer MA & Miller EJ (1984) Urban Transportation Planning: A Decision Oriented Approach. New York: McGraw-Hill Book Company.
Moore JE II (1993) Ridership and cost on the Long-Beach-Los Angeles Blue Line Train. Transportation Research A 27A(2): 139-152.
Obeng K & Azam GA (1995) Allocative distortions from transit subsidies. International Journal of Transport Economics 22(1): 15-34.
Obeng K, Talley WK & Colburn C (1995) The effects of subsidies on public transit long-run costs. Journal of the Transportation Research Forum 35(1): 69-86.
Pickrell DH (1986) Federal operating assistance for urban mass transit: Assessing a decade of experience. Transportation Research Record 1078: 1-10.
Pickrell DH (1992) A desire named streetcar: Fantasy and fact in rail transit planning. Journal of the American Planning Association 58(2): 158-176.
Pucher J, Markstedt A & Hirschman I (1983) Impacts of subsidies on the costs of urban public transport. Journal of Transport Economics and Policy 17(2): 155-176.
Pucher J & Markstedt A (1983) Consequences of public ownership and subsidies for mass transit: Evidence from case studies and regression analysis. Transportation 11: 323-345.
Richmond J (1998) New Rail Transit Investments — A Review. Cambridge, MA: Taubman Center for State and Local Government, John F. Kennedy School of Government, Harvard University.
Rubin TA & Moore JE II (1996) Why Rail Will Fail: An Analysis of the Los Angeles County Metropolitan Authority's Long Range Plan. Policy Study No. 209. Los Angeles, CA: Reason Foundation.
Rushing TJ (5 May 2002) Transit, taxes should wait, observers say. Arlington Star-Telegram.
San Francisco County Transportation Authority (SFCTA) (2001) San Francisco Countywide Transportation Plan: Draft Report. http://www.ci.sf.ca.us/sfta/transportplan/plan2000/sftransportationplan.htm.
San Francisco Municipal Railway (Muni) (1994) Section 15 Report, Fiscal Year 1993–1994.
San Francisco Municipal Railway (Muni) (April 1995) Executive Summary, San Francisco Long Range Fixed Guideway Plan.
San Francisco Municipal Railway (Muni) (April 2001) Project History. http://sfmuni.com/aboutmun/3rdhist.htm.
San Francisco Municipal Railway (Muni) (2002) A Vision for Rapid Transit in San Francisco.
US Department of Transportation (DOT) (July 1998) The Transportation Equity Act for the 21st Century: A Summary. Washington, DC.
US Department of Transportation (DOT) (2000a) This is the Federal Transit Administration, Report # FTA-TBP10-2000-03. Washington, DC.
US Department of Transportation, Federal Transit Administration (2000b) Federal Register 65(236).
Wachs M (1989) US transit subsidy policy: In need of reform. Science 244: 1545-1549.
Wachs M (1995) The political context of transportation policy. In: Hanson S (ed) The Geography of Urban Transportation, 2nd edition. New York, London: The Guiford Press.
lierman.php.
Author information
Authors and Affiliations
Rights and permissions
About this article
Cite this article
Li, J., Wachs, M. The effects of federal transit subsidy policy on investment decisions: The case of San Francisco's Geary Corridor. Transportation 31, 43–67 (2004). https://doi.org/10.1023/B:PORT.0000007235.21442.d1
Issue Date:
DOI: https://doi.org/10.1023/B:PORT.0000007235.21442.d1