Tuesday, April 1, 2008

Transportation finance crisis in U.S.

The U.S. News & World Report took a look at the big problems facing mass transit systems south of the border, being referred to by some as a "transportation finance crisis". With gas prices rising here as well as in the U.S., Canadian systems--including that in Ottawa--may face similar ridership explosions when the Canadian dollar cools. Here's a bit of the story:

With gas at $4 per gallon and highway congestion soaring, ridership on the nation's subways and buses has jumped dramatically. Between 1995 and 2006, use of public transportation increased by 30 percent, a rate far outstripping both population growth and increased highway usage. Last year, that meant Americans took some 10.3 billion trips on mass transit. And therein lies the problem. "There's a transportation finance crisis writ large across the country," says Robert Puentes, a fellow at the Brookings Institution's metropolitan policy program.

Because mass transit systems are so expensive to operate, they rely heavily on subsidies from federal, state, and local coffers. But the flow of money has not kept pace with the ridership growth. And when demand is coupled with capital costs or deferred maintenance and bonds coming due, many transit systems now find themselves in a financial bind that promises to only get worse.


Substantially increasing the fares isn't a practical option in most cases, though record hikes have recently been levied in Washington, D.C., and New York, while the price of a rail ticket in San Francisco has jumped 26 percent in the past five years. A survey in 2001 found that 43 percent of the country's transit riders live in households where the annual income is less than $20,000, and nearly the same percentage of riders come from households without cars. "The hard part of transit funding is finding that sweet spot where you're not punishing the people who need it most, but you're getting enough out of riders to make the whole package work," says Bob Dunphy, senior resident fellow for transportation and infrastructure at the Urban Land Institute.

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